Phoenix Housing Market Update

Hello everyone and welcome to a new edition of Merrill's Market Madness. Normally, it's Merrill's Monday Market Madness but yesterday was labor day, so we're hitting you up on a Tuesday. So, Merrill’s Tuesday Market Madness just doesn't have the same ring to it so we're just gonna call it barrels market madness today. I am joined today with John Hogen, an agent on our team and he's gonna be sharing some awesome information with you guys here in a little bit but I wanna start off by talking as I always do about the month's supply of inventory number so right now active in our MLS is 18,987 listings and there are 8,568 homes that are currently pending 5 748 homes that have closed in the past 30 days. So if we take the actives divided by how many homes sold in the past 30 days it gives us a month's supply inventory number of 3.3.

Now, there are a couple of interesting things about that. Number one is the number of active listings so the low water marks the lowest we ever saw active inventory was around 4,000 active listings that were right at the kind of the end of February or the beginning of March. So at almost 19,000 active listings now we have almost 5x more homes available for sale today than there were even just six months ago. However, that's still a relatively low number given the size and population of the Phoenix Metro area. In fact, back in 2012 and 2013, we even saw home prices rising in those markets, we typically had between 20 and 25,000 active listings. So still pretty low given the size of Phoenix. 

The other thing that's interesting is the monthly supply inventory number, oh I'm sorry there's one other point I wanted to make about the active listings at just under 19,000 the active listings have kind of stopped climbing, we've been stuck at almost 19,000 active listings I mean there's an ebb and flow every day more homes come on the market on Thursdays and Fridays almost no homes come on the market on Sundays and Mondays so you know there is an ebb and flow but the point is active inventory does not seem to be increasing that doesn't mean new homes aren't coming on the market, of course, new homes are still coming on the market but older  homes are either coming off the market canceling expiring or homes are selling so the pace at which homes are being listed is not exceeding the pace at which homes are coming off the market so inventory has really stalled out and if it levels off and starts to go down from there especially you know if interest rates improve we could be back into a hot seller's market within a matter of months so i mean i maintain that this is the best time we've ever seen for a buyer to be able to buy a home right now decent amount of inventory not a ridiculous amount um that there's a lot of sellers who are really motivated who are willing to give concessions and who are willing to adjust their price and who are willing to provide you incentives to buy their house so really great opportunities out there right now. The month's supply of inventory number at 3.3 last Tuesday which was 3.5 so the month's supply of inventory number actually dipped slightly two weeks ago on Tuesday it was 3.29 so again inventory and month's supply of inventory have really stabilized. 

Now, let's take a look at, so those are numbers over the past 30 days but I wanted to give you know we're just in the first couple of days of September. I wanted to give you a recap of what happened in August. So in August, we saw 6,311closings, and the average sales price of all those homes was $553,434. The homes that sold had a 98% sales to list price ratio so whatever the list price was at the time, the homeowner contract it was selling for an average of 2% below that. So, if the average price was 553 just call it $11,000 on average below the asking price and the average days on market was 40 days.

Now, here's the so that's August let's look back a month and lower the July number. So July there were 6,191 closings again August was and 6,311 so we actually saw I mean not a huge amount more but an extra hundred or so homes sold in August as compared to July but here's the one here's the number that I found most fascinating, the average sales price in July was $547,197. The average sales price in August was $553 so we actually saw the average sales price go up by about $6,000, not a huge amount that's 1% average sales price increased about 1% from July to August you know maybe it's an anomaly, it's something we'll keep an eye on but one thing I can say for sure is that over the past month maybe six weeks we have not been seeing a big change in the average sales price. I look at it almost every single day you know kind of a 30-day rolling average for the average sales price and it's not falling. In fact, it has risen slightly, so it seems to me like we've kind of reached the bottom and I don't think prices are going much lower. So if you're a buyer and you're kind of like waiting for prices to go way lower, I don't know if they're going to, the data that we're seeing so far does not appear that that's going to be the case, and then I just thought it'd be helpful to look at August of the last couple years.

So, in August of 2021, there were 9,000 closings 9,056 so only 6,311 this August so we are seeing 30 fewer homes selling right now as compared to August of 2021 of course the market was absolutely on fire but check this out the average sales price in August of 2021 was $491,000, the average sales price of August 2022 is $553,000. So, we've actually still seen the average sales price increase by 53% plus nine $62,000 year over year you know a huge increase in the average sales price year over year. In August 2020 we were just coming out of Covid there were 9,200 homes that closed in August 2020 and the average sales price was $400,200. August 2019, 8,900 homes so basically 9,000 homes again average sales price was $340,000. So basically, the point I'm trying to make here is yes a typical August that we've seen over the last three years sees around 9,000 closings. This year we only had 6,300 closings so you know without a doubt that the amount of homes closing is fewer but that the average price really seems to stabilize inventory has stabilized and there are still 6,300 people who bought homes in August. So homes are still selling if they're priced right and if the prices are still way higher than they were even a year ago. So I'm going to turn the time over to John. He's kind of our resident luxury specialist and he's going to dive a little deeper into what's happening in the luxury market in the Southeast Valley.

John:  All right. Thanks, Merrill! So just to kind of touch on as we've seen Arizona grow the east valley has started to explode hence the increase in the luxury market just in this particular area where you know years back it wasn't too strong to go back into 2019 and 2020 in August of those months we're only seeing 12 homes sell each of those prior years. Currently, we have 257 active listings that range between one to two million dollars in the Mesa, Chandler, Gilbert, and the Queen Creek area 95 pending sales which is a pretty strong number, and then we've had 77 homes close up in the last 30 days which again looking back a couple of years we're looking at 12 all the way up to 77 and even more important is that last year in August of 2021 we only had 52. So we've seen a significant jump in the luxury market still staying strong as well and out on top of that we're sitting about 3.4% months of current supply which kind of matches up with everything else that we're seeing in a market trend as far as the valley goes and then we're also sitting about 44 days on market that's the same amount that we saw in 2021 which you know everyone looked at 2021 it's a crazy seller's market and so forth. So even looking now we're still staying around that 44 days and again it lines right up by just a couple more days as far as the whole valley goes for the days on market and then the last thing is we are setting about a $1.29 million average sales price for those properties and sellers getting around 97% of asking price. So again still looking for pretty strong buyers. If you're out there again, it's a great time to take advantage because you can see the rise in the prices year after year and the number of homes that are selling. So if you have the chance take advantage while you can while the market's still good for you.

Yeah, absolutely I mean that number blew me away, 77 homes over a million dollars sold in the east valley over the past 30 days right that's what I mean you know compared to 2021, and 2020 there were only 12,

John:  Correct!

Yeah, so a lot of luxury homes are selling, right?

John:  Absolutely!

So it's not like that market's not moving.

John:  It's definitely moving and again the demand for the east valley with those types of homes is increasing which like I said it's a great time to take advantage if you can.

Absolutely! I'll try to post the article in the link. I didn't think to have this prepared ahead of time but I saw a very interesting article over the weekend by Fannie Mae projecting that interest rates in 2023 will fall to 4.5%. Now, none of us have a crystal ball and we don't know for sure if that's going to happen but here's the point I just want to end with, if you wait until interest rates are 4.5%t to buy it's going to be a crazy competitive difficult frustrating seller's market. Again, I'm bidding wars and all sorts of craziness all over again. I really just really really believe this is the best time we've ever seen to buy a house you should get in now and then whenever the interest rates improve you know refinance it at that time to get yourself into a better rate and a better payment but we've never seen such a great opportunity to be able to negotiate, get money off getting concessions, get all the things you need to me to need to do.

So, if you're thinking about moving don't make it about like trying to time the market and trying to time the interest rates, you'll never get the timing just right like you should move when your family needs to move and when the timing is right and you know let us help you find a deal where the numbers in the house make sense for you and so yeah if you are curious about you know what it would take to be able to buy a home in this market or you're curious about the value of your home in this market we'd be happy to sit down with you and have a consultation and see if the timing is right for you. So please reach out and we appreciate you watching, have a great day!

What does this mean to you? If you're even a little bit interested in learning more about participating in the Phoenix housing market as a seller, buyer, or investor... you NEED to know this stuff! Or at least work with someone who is obsessed with the market stats. Reach out to me today so we can start working on making your real estate dreams a reality!