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What Is Driving The Greater Phoenix Real Estate Market? 🤔

Discussing The Latest & Greatest

Welcome to the Williams Luxury Homes weekly real estate update. Here we bring you the latest Greater Phoenix real estate market data. This week's update will focus on the first quarter of 2023. And what the data is telling us about home sales in the valley. Before we get started, make sure to bookmark our Arizona real estate blog. Let's get into this!

Owner-Occupants Dominate Home Sales

According to our data, 74.5% of home sales in Q1 of 2023 were for owner-occupants. This is a significant increase compared to the previous year, showing that more people are looking to settle down in the greater Phoenix area.

Investor Purchases On The Decline

Investor purchases have decreased to about 14.3% in Q1 of 2023 compared to the highs of 2020-2021 at about 20%. This trend suggests that investors are less interested in the Phoenix real estate market than before.

iBuyer Purchases Are Minimal

iBuyer purchases are only 0.6% of purchases in the Phoenix area in Q1 of 2023. This shows that people are still more likely to purchase homes through traditional methods.

Steady Second-Home Purchases

Second home purchases have remained steady at around 10% in Q1 of 2023. This suggests that people are still interested in investing in vacation homes or second residences in the Phoenix area.

A photo of the Greater Phoenix Valley.

What Is Driving The Greater Phoenix Real Estate Market?

Cash Purchases & Conventional Loans Are Still Common

Cash purchases comprise about 22% of home purchases in January and February 2023. Conventional loans also make up a good number of purchases. FHA loans, which require lower down payments and other stipulations, are a smaller percentage of purchases. VA loans make up 6.3% of purchases in the Phoenix area, while hard money loans are a small percentage of purchases at 1.5-1.6%.

Home Sales Still Significant Despite Lower Numbers

Home sales are lower than in previous years but still significant: about 5,300 in January 2023 and 6,800 in February 2023. This indicates that the Phoenix real estate market is still active. Many people HATE hearing this, especially all the YouTubers who make a living off of doom and gloom. BTW - if any of you are reading, how bad does life suck as a person who lives to spread bad news? Asking for a friend.

Slightly Higher Interest Rates and Rising Prices

Interest rates have risen to about 6.65% for 30-year fixed mortgage rates as of Q1 2023. The monthly average sales price per square foot has been increased since January 2023, currently just over $278. These factors suggest that home prices are rising, although there are still plenty of buyers in the market.

Summary & Closing

Overall, the data shows that there are still plenty of buyers in the Phoenix real estate market. There is a shift towards more owner-occupants and a decrease in investor purchases. Cash purchases and conventional loans are still common. Also, home sales are lower than in previous years but still significant. Interest rates have risen slightly, but home prices have increased since January 2023. If you want to buy or sell a luxury home in the greater Phoenix area, contact Williams Luxury Homes for expert advice and personalized service.

Also Read: WLH Sells Stunning White Horse Property For $4.9 Million

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