Valley rents are stubborn, and mortgage rates continue to drive the market. The Arizona Market Report is next.
Yellow Brick Drive
Hello and welcome to the Arizona Market Report brought to you by YellowBrick
Drive.com on this Tuesday, Dec 13, 2022. Yellow Brick Drive is our home-search website here in Phoenix, Arizona. You can find this Market Report right here on the website by clicking on the “Report” icon on the top right corner of any page. You can also find us on YouTube at youtube.com/@yellowbrickdrive. We would also like to let you know that a new statistics tab called “Average Rent Price” has been added to the top 12 cities’ home pages. This chart can be a great source when following the rental price trends in the Phoenix Valley.
Phoenix Valley Rental Market
Speaking of rent prices, they seem to show us their stubborn streak. Rents in the valley have yet to decrease significantly in most areas. But when we look at the resale market, it makes sense that they are holding strong.
With expensive mortgage rates, sellers aren’t too eager to jump out of their cozy 3% nest. This ultimately affects the supply and demand of rentals. When rental demands are up, it’s hard for prices to come down. Really, the small decreases we’ve seen have more to do with the supply increasing due to the actual building of rental properties. This results from the rental housing shortage we saw in previous years. It appears that until the resale market picks up, rental prices will likely continue their slow journey to nowhere, and lower prices will be at the mercy of increasing the supply.
Phoenix Valley Resale Market
The Phoenix Valley resale market continues to be driven by mortgage rates. At least as far as activity is concerned. The supposed “Housing Crash” never came, and prices have continued to hold serve. One of the reasons for this is the previous low-interest rates combined with high home values. The real estate market is cash-flow-driven. It simply doesn’t make cashflow sense for current low-interest mortgage-holding homeowners to enter the market right now. The sales we are seeing are likely from folks who either need to sell for life-changing reasons or a financial fix of some sort. The iBuyers, if you were wondering, would fall into the latter category.
For now, I wouldn’t expect to see much change for the rest of 2022, but January could prove to be an interesting trendsetter for 2023. We’ll keep you informed either way. Thanks for tuning in to the Arizona Market Report at YellowBrickDrive.com. See you next time.