But Will 7% Mortgage Rates Play the Spoiler?
Well, that didn’t last long.
For 12 years, from November of 2010 until this past December, the Phoenix residential market had been in a sustained seller’s market.
Then, over the holidays we entered buyer market territory and we wondered how long that would last. It lasted 4 weeks. Coinciding with lowering mortgage rates, it began moving up into a balanced market at the end of 2022, and again we wondered how long our local real estate world would stay in balance. As mortgage rates continued to lower, briefly dropping to 5.99% we quickly found out that our market balance lasted 4 weeks!
We re-entered Seller market territory the 3rd week of January and have continued to rise. But now, with rates rising again to the 7% range, we’re expecting a leveling off, though in our crazy market, no bet is safe.
Of our 17 cities in Phoenix Metro, 12 of them are firmly in seller market territory. Two, Surprise and Goodyear, remain in balance, while Queen Creek, Maricopa, and Buckeye are still in a buyer’s market. However, they were rising towards balance the last few weeks. Only two of our cities, Paradise Valley and Cave Creek, have seen their index drop in the last week.
“Low supply remains the wild card that national pundits fail to take into consideration when they make their brash predictions of Phoenix doom and gloom pricing.”
Okay, it’s time to take a look at February’s main sales numbers:
- Active Listings: 14,739 vs 4,588 last year – up 221% – but down 5.5% from 15,598 last month
- Under Contract Listings: 7,810 vs 12,050 last year – down 24% – but up 16.6% from 7,810 last month
- Monthly Sales: 5,693 vs 7,993 last year – down 29% – but up 31% from 4,357 last month
- Monthly Average Sales Price per Sq. Ft: $271 versus $285 last year – down 4.7% – but up 1.2% from $267.83 last month
- Monthly Median Sales Price: $413,000 vs $445,000 last year – down 7.2% – but up 0.7% from $410,000 last month
Per the Cromford Report*
The good news is the additional number of listings that are available for buyers compared with one year ago. Inventory has increased 221%, however it’s dropped 5% from the previous month. Listings under contract have increased 17% compared with January, but were 24% lower than 2022.
Pricing is regrouping too. The monthly average sales price per square foot (PSF) is down near 5% from one year ago, but rose 1.2% from last month. Likewise, the Monthly Median Sales Price dropped over 7% from February of last year, but increased 0.7% from last month.
Buyers remain scarce. Home inventory is again getting scarcer. Low supply remains the wild card that national pundits fail to take into consideration when they make their brash predictions of Phoenix doom and gloom pricing.