Phoenix Real Estate Market Update
Phoenix Real Estate Market Update
The most common question we get asked is, “how’s the real estate market right now?”
It’s a loaded question because many times it depends where you live, the value of your home, how old your home is, and in what condition. But setting aside those things for now, the real estate market in the Phoenix area, for the most part, has transitioned from a balanced market to a buyer’s market. Since Covid (2020), we have been in some form of a seller’s market…inventory was low, buyers (with low interest rates) were hungry, and the result was that prices rose significantly.
It’s not the same market today. For the first time in a number of years, sellers are finally putting their homes on the market. Inventory is very high, giving buyers who are qualified numerous options to choose from. This high-supply, low-demand scenario has pushed home prices downward. Very few sellers are receiving full price offers, and many buyers are presenting low-ball offers and asking for seller concessions, especially for homes that have been on the market for months. We’re getting multiple notifications per day of price drops on homes we have shown prospective buyers in the past.
Without getting too deep into the data, two of the most insightful data points for our current real estate market, besides homes on market and monthly sales, are Months of Supply and Absorption Rate. Months of Supply tells us that if no new homes come onto the market, how long would it take to sell all current homes on the market at the present rate of sales. Today’s MoS is 3.77 months, and rising.
The Absorption Rate is the percentage of homes for sale that are sold each month. Two years ago, the Absorption Rate was 65-80%. Today’s Absorption Rate is 26.5%, meaning barely over one-quarter of the available homes for sale are sold each month. Couple that with more homes being listed for sale each month than are selling, and you can see that we’re clearly in a buyer’s market. If you’re a potential buyer sitting on the sidelines, now is the time to jump in and see what deals are out there and stop paying someone else’s mortgage.
Curious about the market in your area, or the value of your home specifically? Give us a call! We’re happy to talk real estate and tell you what your home is worth, even if you’re not planning to buy or sell anytime soon.