Greater Phoenix RE Update

Real estate in Greater Phoenix has seen its ups and downs, and right now, it’s looking more down than up. But hey, it’s not all doom and gloom! Redfin dropped some news that could be a silver lining for the market. So, what’s the real story? Let’s take a look at the numbers (from September and October), see where things stand, and figure out what’s next for real estate in Greater Phoenix. All below!

September's Numbers

The latest affidavits of value for Greater Phoenix are in for September, and they're painting a less-than-ideal picture. But some glimmers of hope are still worth paying attention to. Let’s get into the details.

• 5,584 closed transactions in September
• 5.3% decline from last year
• 6.4% drop from August
• 1,441 new home sales, down 11.3% from last year
• Median sales price of $471,199 (up 4.9%)

It’s no surprise that the number of closed transactions keeps falling. But interestingly, while overall numbers dropped, prices are still holding steady or even rising.

Resale VS. New Homes

New homes are having a moment compared to resales. The data shows that new home prices are climbing faster than resale homes, and it’s a trend worth noting.

• Resale median price: $450,000, up 2.3% from last year
• New home median price: $587,192, up 8.3% from last year
• New home prices increasing more rapidly

New homes are simply commanding higher prices. Whether that’s sustainable or not remains to be seen, but they’re definitely giving resale homes some competition.

Also Read: Interest Rates Up & Greater Phoenix Real Estate Market Update

What The Cromford Report Is Saying

According to the Cromford Report, Greater Phoenix saw 21 working days in September 2024, compared to 20 days last year. Sounds small, but this extra day makes the decline in closed transactions look even worse than it is. Essentially, the market's slower, and fewer homes are changing hands.

• 5.3% fewer closed transactions compared to last year
• Fewer sales per day compared to last September
• Market performance weaker than it appears

We’re seeing less buyer activity, and it's taking a toll. It's rough out there, but let’s see if Redfin’s data offers a light at the end of the tunnel.

Redfin’s National Data: Is It Helping Greater Phoenix?

Redfin has reported a nationwide uptick in pending home sales, which could mean a change is coming for Greater Phoenix. Pending sales rising can mean more closings down the line, possibly boosting local market performance. Redfin also noted that mortgage purchase applications are ticking up.

• Pending home sales up 2% nationally
• Biggest increase since 2021
• Mortgage applications up 8% month over month

There’s potential for a rebound, but with mortgage rates fluctuating, it’s anyone’s guess where the market is headed next. Buyers have been hesitant to jump in, but lower mortgage rates could shift things if they stabilize.

Greater Phoenix’s Supply and Demand Balance

More homes are hitting the market in Greater Phoenix, and demand hasn’t caught up yet. That means buyers have the upper hand, with more homes to choose from and potentially better negotiating power.

• Active listings keep increasing
• Sellers have less leverage
• Buyers can negotiate better deals

But is this seasonal? Kind of. Historically, Greater Phoenix sees more listings in the fall, but this year’s increase feels heavier than usual. The question is, will demand rise enough to balance out the influx of homes?

Also Read: How Much Are Property Taxes In Arizona?

Buyer Demand & Future Trends

Greater Phoenix’s Cromford Market Index (CMI) has been slipping as supply outpaces demand. It’s teetering toward a buyer’s market, and while some areas might still favor sellers, buyers are gaining ground in several cities.

• CMI at 93.9 (balanced, leaning toward buyer’s market)
• Supply up 20% below normal levels
• Demand down 25% from normal levels

The longer this supply-demand gap remains, the more power buyers will gain. It’s a trend to keep an eye on as we head into the end of the year.

The Mortgage Rate Rollercoaster

Rates have been anything but stable lately. They spiked after a strong labor market report, but they’ve also seen dips. This unpredictability keeps buyers on their toes, with many waiting for a better moment to jump in.

• Mortgage rates at 6.64% last week
• Applications dropped as rates spiked
• Election year adds more uncertainty

Rates will likely keep fluctuating, and with an election around the corner, buyers and sellers alike may hit the pause button. What happens next is anyone’s guess, but this unpredictability is creating hesitation across the market.

Where's the Market Headed?

The Greater Phoenix market is in a delicate spot. With more homes hitting the market and buyer demand lagging behind, it’s creating an interesting situation. Buyers who are ready to act have opportunities, but they’re also waiting to see where mortgage rates go next. Sellers? Well, they’re feeling the pinch. For now, the market’s future depends on how quickly demand catches up to supply, and whether rates will calm down enough to bring buyers back into the game. Let’s see how this plays out in the coming months.

Also Read: What To Know Before Moving To Arizona!