Introduction
Welcome to the Arizona Market Report. My name is Ryan, and I’m a Realtor at HomeSmart here in Phoenix, Arizona.
Yellow Brick Drive
YellowBrickDrive.com is our home-search website, and where you will find this weekly Market Report along with a few other local area highlights! But we’ll get to that in a moment. First let’s do a quick walk-through of the website
The home page allows quick access to searches for some of the area’s largest and most popular cities. But the real magic happens in the top right corner. Search Hub, Location, and Report.
The Search Hub opens a variety of custom searches we’ve put together to make things just a bit easier. For example, if you’re a golfer, you might take a look at the Golf Community search. Love the water? Check out our Waterfront home search. You get the idea. In any case, these are great places to get started…and when you’re ready…you can always adjust your parameters and lock down that perfect home.
Next to Search Hub, is Location. This opens a city navigation tool, allowing you to conveniently “navigate” between different areas in the valley. You can even quickly pull up searches at the neighborhood level. It’s pretty cool.
Next to Search Hub, is Location. This opens a city navigation tool, allowing you to conveniently “navigate” between different areas in the valley. You can even quickly pull up searches at the neighborhood level. It’s pretty cool.
Cromford Report
Next to Search Hub, is Location. This opens a city navigation tool, allowing you to conveniently “navigate” between different areas in the valley. You can even quickly pull up searches at the neighborhood level. It’s pretty cool.
Market Analysis
Well, you know what they say, “When one door closes…buy another one and open it yourself.” Easier said than done. Buyers have been trying to do this for quite some time now, and have largely experienced a bumpy ride. So is this all about to change? Are buyers finally able to turn the tables? The answer is….it’s complicated.
In short, prices are dropping due to an increased supply and lesser demand. But with interest rates rising to combat inflation, combined with historically high gas prices and a declining stock market, buyers are still met with significant financial challenges. So is the market really changing? Absolutely. Where is it going? That’s why we’re here talking about it each week. We are not in the business of predictions, nor are we economists. We are though able to analyze the numbers that help us make more informed decisions. Let’s do a quick break down.
What are the driving forces behind the current market conditions? First, let’s take a look at what’s actually changing. This will allow us to identify patterns over time. Here are a few key factors we’re going to take a look at this week.
- Inventory
- Interest Rates
- New Home Builders
- iBuyers
- Investors
Inventory
Let’s start with inventory. Active listings are up, but why? You might think that sellers are listing more homes, right? Well, another truth is that homes are simply taking longer to sell, in essence, creating a backlog. Whatever the case, when sellers have to compete, buyers win. At this stage winning might comprise of inspection and appraisal contingencies actually holding in place. Or maybe buyers find themselves with a little more time and a few more options that fit their needs. In either case, the market is shifting, and so far…it’s not shifting slowly. In fact, according to the Cromford Report, the market is shifting faster than we have seen at any time in the last 22 years.
Interest Rates
So we know that interest rates have played a major role in the rise in inventory, simply due to a 22-year low in mortgage applications. Fewer mortgages means fewer buyers, which typically means higher days on market and lower prices. But we need to let this one play out a bit longer before jumping to conclusions.
Home Builders
New home sales have also picked up, contributing to the active listing increase. But single-family permits issued in Maricopa and Pinal counties are 35% lower than July last year. Multi-family permits are a different story. July saw the largest total of permits ever recorded, and for the first time, multi-family permits exceeded single-family permits. This appears to suggest that developers think there will be more people looking to rent in denser urban areas moving forward.
iBuyers & Investors
And finally, iBuyers and investors are far less aggressive with their buying and getting more aggressive with their selling. Investors have slowed, showing signs of timely exits. A portion of recent price drops are from investment properties eager to meet their bottom line. This, of course, can mean “advantage buyer” while sitting at the negotiating table.
Summary of Arizona Real Estate Market
Ok, so what have we learned? We know that inventory is up, but not because of why you might think. We know that interest rates have played a strong role, and the feds have made it clear that they are likely to continue on this path until they gain control of inflation. We know that new home sales have picked up, but single-family permits are down and multi-family permits are up. And finally we know that iBuyers and investors had to pivot to meet the bottom line, and are major contributors to price drops across the board.
Neighborhood Spotlight
Be sure to tune in on Fridays when Amber hits the road and look closely at specific areas across the valley. Let’s see where she’s taking us this week.
