Too Many Houses in Phoenix? - Phoenix Real Estate Market Update

Photo byCaitlin McKeague

Is Oversupply on the Horizon?

In the dynamic landscape of Phoenix real estate, recent shifts in supply and demand are prompting both excitement and caution among buyers and sellers alike. Let's delve into the latest market update to understand the implications of these trends.

Economic Overview:
Last week, there was a glimmer of hope as the Fed's preferred inflation gauge reported its lowest annual rise since March 2021. This positive news had a ripple effect on mortgage rates, providing a brief respite for potential homebuyers.

Supply Dynamics:
On a national scale, new listings surged by over 133% year-over-year, marking the most substantial increase in nearly three years. While total inventory remained steady, this uptick in listings signals a potential shift in the housing market.

New Construction:
Phoenix is experiencing a surge in new construction activity, with single-family permits showing a remarkable 47% increase compared to last year. Builder confidence is evident, as evidenced by the robust growth in new home sales.

Resale Market:
Despite the optimism in new construction, the resale market is facing challenges, with sales down 5% from the previous year. However, the recent increase in active listings suggests a potential rebalancing of supply and demand.

Market Index Analysis:
The Cromford Market Index (CMI) provides valuable insights into market dynamics. While the overall CMI has dipped slightly, the gap between supply and demand is narrowing, indicating a move towards equilibrium.

City-wise Analysis:
Cities like Chandler and Gilbert continue to demonstrate strong seller's market conditions, while others are edging towards balance. It's essential to monitor these trends closely to gauge market sentiment accurately.

Multifamily Development:
The multifamily sector is experiencing rapid growth, with permits nearing record highs. While this addresses housing demand, concerns about potential oversupply loom large, necessitating careful monitoring.

Conclusion:
As the Phoenix real estate market navigates through these shifting dynamics, staying informed is key for both buyers and sellers. Whether you're considering buying, selling, or investing, it's crucial to leverage market insights to make informed decisions. Stay tuned for further updates, and don't forget to explore our resources for all your real estate needs.