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Arizona Market Report | Sep 12, 2022

Weekly real estate market report from Phoenix, Arizona. This week Ryan talks about a spike in MLS rental listings and average home prices in some east valley cities.

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Arizona Rental Listings On The Rise

At the moment, active listings in the residential re-sale category appear to be slowing, hanging out around 18k.

This is still slightly higher than last week, but not a significant increase. Rental listings are a different story.

MLS rental listings are up 149% from this time last year. It’s not that we haven’t seen a larger number before, but it’s high compared to the last two years. In fact, it’s the most we’ve seen this time of year since 2015.

I think that even more significant is the fact that so many rentals have been listed on the MLS. It’s not uncommon for rental properties to post mainly on third-party sites like craigslist or Zillow. It’s quick and easy and usually provides strong results. Listing on the MLS is more involved, and certainly more expensive.

So what does all this mean? Well, it’s likely to provide some much-needed rent relief moving forward. 74% of the MLS rental listings are single-family detached homes, with an average price of $1.49/SqFt, down from $1.91 this time last year. We also know that we have seen an increase in newly-built single-family homes targeted and available for rent. These types of properties will likely continue to pop up in the upcoming years.

Let’s take a look at this current list of rental prices/sq ft in a few east valley cities.

  1. Mesa – $1.31 (down from $1.38 in July)
  2. Chandler – $1.28 (down from $1.33 in July)
  3. Gilbert – $1.27 (down from $1.36 in July)
  4. Scottsdale – $1.89 (up from $1.75 in July)
  5. Queen Creek – $1.11 (up from $1.10 in July)

We’ll be sure to check back on these prices next month, and in all likelihood, will see more drops across the board.

Interest Rates and Sales Prices

With average 30-yr fixed mortgage rates coming in at 5.98% this week, the feds are waiting on more economic data before deciding on rate hikes. Since it’s not likely we’ll see a drop in rates; we can safely assume that demand will continue to slump.

Let’s check to see if it has affected monthly average sale prices for single-family homes in these valley cities.

  1. Gilbert – $645,388 (down from $712,625 in July)
  2. Chandler – $669,328 (up from $638,427 in July)
  3. Scottsdale – $1,061,310 (down from $1,404,152 in July)
  4. Tempe – $664,810 (up from $630,936 in July)
  5. Phoenix – $562,197 (up from $559,765 in July)

You might be surprised that 3 of these 5 top cities have actually increased their average sales price since July. But when we look closer, we continue to see price drops among active listings that have yet to join the party. Stay tuned; we’ll continue to update you on these numbers as we move into the fall season.

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Contact Amber with any real estate questions or for assistance in the Phoenix Metro area.

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Summary

Alright, so we talked about rental prices starting to react to an increase in supply, which will likely lead to a more competitive market. This usually means lower prices, but we’ll have to wait and see on this one. Interest rates also affect rental markets in a roundabout way.

We also talked about the average sales price, and how it’s a bit stubborn in some areas. The reality is that many properties currently on the market, don’t have to sell. There are a lot of mortgages rockin’ a 2.9% rate and are just testing the waters. And despite some recent drops, many are still strong with equity. Like we said last week, this market is definitely on the move. It’s just gonna take a while to get to wherever we’re going.

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Thanks for tuning into the Arizona Market Report. This week we break down 2 key points in the Arizona real estate market.

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