FINALLY More Housing Supply for Phoenix! | Phoenix Real Estate Market Update

Photo byCaitlin McKeague

In recent times, the real estate market in Phoenix, Arizona, has witnessed notable shifts, echoing trends observed across the nation. From an increase in supply to evolving buyer behaviors, various factors are shaping the dynamics of the housing market. In this article, we delve into the intricacies of the current real estate landscape in Phoenix, offering insights and analysis based on recent data and trends.

Rising Supply Nationwide

The surge in housing supply is not confined to Phoenix but is a phenomenon observed across many regions in the United States. This increase encompasses both resale homes and new construction projects, with the latter gaining prominence in certain areas. Traditionally, a rise in supply tends to exert downward pressure on home prices. However, the extent of this impact on the Phoenix market remains uncertain.

Insights from Redfin

According to a recent article by Redfin, there's a notable uptick in supply, coinciding with a 10% increase in monthly housing payments compared to the previous year. Sellers are capitalizing on rising prices, evident from a 15% surge in new listings—a significant jump in nearly three years. Despite this, there are indications that price growth might soften in the coming months, with an increasing number of sellers reducing their asking prices.

Phoenix Market Snapshot

In Phoenix, active listings—including under contract and contingent homes—have reached approximately 20,000, marking the highest figure for late March since 2019. While this number remains below the long-term average, it signifies a step towards a more balanced market post-pandemic disruptions. Notably, the market is witnessing heightened competition between resale homes and new construction projects, with the latter experiencing a surge in permits.

New Construction Trends

New home sales in Maricopa and Pinal Counties have surged, reaching levels not seen since 2006. This trend can be attributed to various factors, including builder incentives and rate buy-downs, which make new builds financially appealing to buyers. The increasing preference for new homes is evident from the higher median down payments observed compared to the previous year.

Mortgage Rate Dynamics

While recent weeks have seen minimal fluctuations in mortgage rates, the start of April brought about a sharp increase, signaling potential challenges for homebuyers. Economic indicators such as the upcoming jobs report could further impact mortgage rates, underscoring the importance of staying informed when navigating the housing market.

Cromford Market Index Analysis

The Cromford Market Index (CMI) for the Phoenix Metro area has shown a gradual decline, indicative of a softening market. While the overall market remains in seller's territory, individual cities exhibit varying degrees of market strength. Factors such as location and price range play a crucial role in determining market dynamics, with some areas experiencing robust seller activity while others lean towards a buyer's market.

As supply continues to rise and market dynamics evolve, the Phoenix real estate landscape presents both opportunities and challenges for buyers and sellers alike. While the market retains its resilience, vigilance and adaptability are essential for navigating the shifting terrain. Whether you're considering selling your home or embarking on a homebuying journey, understanding these trends can guide your decisions in the ever-changing real estate market.

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