This week in Phoenix real estate…
Signs are continuing to point to an excruciatingly slow return to “normal” in Phoenix real estate. We saw a 16% increase in active listings compared to this time last year (WOW!!) which is a mere 61% less than we had in April 2020. Well, that was that whole COVID year, sooo. OK, a mere 70% less than we had in the more normal 2019. Oh, forget it…we are still REALLY low on listings but at least trends are heading in the right direction.
I have heard several comments, recently, pointing at the increase in price cuts as a sign of maybe the start of a buyer’s market. Why yes!! Price cuts are way up compared to last year – up 72%!! Are Sellers just giving the houses away now? Is this the crash!?! Climb down off the roof, there, my distraught friend. In April 2020 we had almost twice as many price cuts and in 2019 we had almost 4 times as many. Of course it’s easier to reduce prices on homes for sale when you actually have homes for sale.
What’s Ahead…
Things are looking better but we still have a long way to go. The sales stats you are seeing now – 6 days on the market before going under contract; 58% of homes selling over the listing price by a median of $20K – those reflect homes that went under contract last month. I expect to see more cooling trends in next month’s sales stats. Fewer homes are going under contract, which will show up as fewer sales next month. The appreciation rate is slowing, but we are still likely to see the average sales price hit $300/sf next month. Most indicators are pointing away from a strengthening seller’s market, but you still have to look pretty hard in most cases, because we are still living in Crazytown.
Despite everything being thrown at the housing market to extinguish the flames – 5% interest rates, a 72% increase in the median home price in 2 years, gas prices, avocado prices (have you seen the price of avocados lately!!), the Phoenix real estate market isn’t crashing…but it appears to be coming in for a nice, gentle landing.
