It has been a challenge for buyers to find homes across the Valley for the past two years. Due to low inventory, bidding wars became the norm. Now, demand is falling, and Phoenix housing inventory is rising as interest rates make it more expensive to borrow. Although the Phoenix housing market is in a state of cooldown, there is a low chance of a housing market crash.
Bidding wars are decreasing as home listings stay on the market longer. Houses are now listed for an average of 39 days before a buyer makes an offer, according to the Phoenix market report from Redfin.
The housing supply provides a better opportunity for homebuyers to get the property they want due to increases in home availability. Many prospective buyers were priced out and had to postpone purchasing a home within the last year, but sellers are rightfully worried they missed out on the peak of the market. Sellers are more willing to cut prices to find a buyer, now that there are fewer people shopping.
According to a report from Rocket Homes, there are about 7,300 homes for sale now. The report also found that 53.4% of homes in Phoenix sold below asking price last month. Thanks to larger inventory and slower appreciation, home prices are starting to balance out. The median home list price in Phoenix is June was $548,500, according to a report from Realtor.com. In addition, 29.5% of recent and current listings have undergone a price reduction, allowing more buyers to purchase a home. The average sale price of a Phoenix home in August was $430,000., according to Redfin.
Another element that is impacting the market right now is the season. Many Arizonans are out on vacation, which could be contributing to the decrease in buyers. Also, those moving from out of state may be waiting for the weather to cool down before visiting Arizona to purchase a home.
Due to many contributing factors, Arizona is currently experiencing a cooling market, which has contributed to the increase in home inventory. Real estate experts like myself will be keeping an eye on if this trend is here to stay, or if we see a spike again in the fall months.
Author: Rich La Rue is the Designated Broker for HomeSmart Phoenix, the flagship brokerage operation in the HomeSmart system. La Rue has more than 38 years of experience in real estate sales and management from real estate offices to regional and national operations. La Rue began his career in real estate in 1983 in Phoenix, Arizona as a sales associate. In 1986 he earned his Arizona Real Estate Broker’s License. He also holds a California Real Estate Broker’s license, GRI, CRS, and CRB designations as well as the e-PRO and the SFR certifications. For more information, visit www.richlarue.com.