Slight Summer Price Drop for the Phoenix and Scottsdale Areas Ahead

Slight Summer Price Drop for the Phoenix and Scottsdale Areas Ahead

They’re saying that July 2023 was the worst (hottest) on record, but it’s August in the Valley of the Sun, that is the pinnacle of misery. September, though still hot, brings cooler mornings and is a reminder that soon, our chamber of commerce weather will return.

Our Phoenix metro residential real estate market is resembling our August weather slog. Low supply, low demand, and high mortgage rates (7+%), yet still, a seller’s market. Still not much of a break for buyers.

August 1st Market Report

Arizona Regional MLS numbers for August 1, 2023, vs with August 1, 2022 – areas & types:

  • Active Listings 11,241 vs 17,957 last year – down 37% – and down 2.6% from 11,545 last month
  • Under Contract Listings: 7,546 vs 8,058 last year – down 6.4% – and down 4.0% from 7,858 last month
  • Monthly Sales: 5,906 vs 6,190 last year – down 4.6% – and down 21% from 7,452 last month
  • Monthly Average Sales Price per Sq. Ft: $282 versus $286 last year – down 1.3% – and down 1.9% from $287.78 last month
  • Monthly Median Sales Price: $434,900 vs $452,500 last year – down 3.9% – and down 1.8% from $443,000 last month


On a different note, the new home market is doing much better than resales:

  • New home closings totaled 1,352 with a median sales price of $533,592, an all-time record high price
  • The new home closed sales count was up 7.6% from July 2022 but down 18.4% from June 2023.
  • The new home median sales price is up 3.2% from a year ago, and up 2.8% from last month


One of the reasons why new home sales are fairing better than resales is that builders are providing mortgage rate buy-downs. Resale sellers can do the same, and those sellers that are providing incentives for buyers are more successful in getting to – CLOSED!

Small Correction or Huge Dip for Phoenix and Scottsdale?

Small Correction or Huge Dip for Phoenix and Scottsdale?

No one can deny that we have now seen price corrections in the Phoenix metro market. On the street level I myself have seen weaker demand affect our listings. We have three different listings which we’ve now got under contract, that I am confident we could have got at least $20,000 to $50,000 more for if we had listed two or three months earlier.

While this is good news for buyers, there is also some good news for sellers, though it might be underwhelming.

What’s the good news?

It’s getting worse much more slowly! “Well Jonathan, that doesn’t seem very exciting…” Hear me out. Over the last two or three months, we have had weekly deluges of new listings hitting the market. At the same time, demand dropped big time.

Over the last two or three weeks however, new listings have begun hitting the market at a much slower pace, easing the rapid inventory increase. In fact, when I checked the MLS this morning for single family listings, the amount was almost the same as last week. I should note that when factoring in all the other housing types, the total amount rose. This may suggest that the situation for single family homes is healthier than other sectors of the market.

In addition to this, while demand is still dropping, it looks like it may be balancing out. In some zip codes, we have seen a slight increase in demand over last week and the week before. One example is Cave Creek, which is in a better place market wise than it was a few weeks ago.

To my view, it looks like we may be nearing the bottom of a curve in terms of the overall supply and demand issue.

But this is just one potential. There are many variables that can tip this either way. What are some of those variables?


As far as we can tell, overall affordability is the largest factor in the current demand reduction.

  • Interest Rates: They’ve been fluctuating up and down pretty erratically over the last few weeks, and we don’t really know where they will be going. If they spike higher again, that may cure me of my delusions all too quickly. If they edge lower we believe a new wave of buying could be opened up.
  • Price drops: The recent price drops we’ve been experiencing, as well as seller’s willingness to now help out with a buyer’s closing costs is helping out with affordability for buyers. There is a returning trend right now of sellers helping buyers to buy down their interest rates, which can help lower payments significantly.


The overall supply is still a little below what we would say is average for the phoenix market, but it’s not far from that.

  • Homeowner Panic: Will sellers panic and rush to sell, trying to cash out while prices remain high? Maybe, but my big question is, where would they go? Renting isn’t a very attractive option right now either, and if they just go buy another home, unless it’s out of state, the market here won’t be much affected.
  • Institutional investor panic: While they’ve slowed down and not paying top dollar anymore, the ibuyers, as we call them, are still buying. We haven’t yet seen a mass selloff. Rents have come down, but overall still much higher than they were a few short years ago. Phoenix real estate seems to remain a valid choice for investors.
  • Small investors. If there is a big sell-off, we think it would most likely come from ordinary folks that have one or two investment properties, trying to offload them.

The reality is we are still in a chapter of change for Phoenix Area Real Estate. It seems to me the chapter is about to end, but there is another chapter coming. I’m hopeful it will be a boring chapter unlike the last one, but stay tuned to find out!

Phoenix and Scottsdale are Nearing a Buyer’s Market!

Phoenix and Scottsdale are Nearing a Buyer’s Market!

The current talk of course, is all about the Phoenix (as well as the country’s) real estate market dropping in value – and it is. See article out today here.

Question? If you’re a renter, should you renew your lease (continue to rent) or opt into the more buyer friendly market happening now?

At some point, you’re going to buy a house, that much you know. You tried this past year and got turned off by the mega-competition offering on homes for sale, so you signed a lease on a home or apartment, because trying to rent a house, was just as competitively bad as buying.

It’s tempting to wait and renew that lease for another year. After all, your wise landlord should be done raising your rates for now, seeing that the rental market is softening as well. And home sales prices continue to trend downward in pricing. On the one hand you would not be faulted to sign a year’s lease and stay where you are, unless of course, the Geico renters upstairs are forever dance clogging LoL:

But things have changed, radically and quickly. (See Numbers Below) Now what should you do as your lease comes up for renewal?

All that said, or danced to, there’s a strong case for house shopping sooner than later. Remember, with over 45 years in the residential real estate market, I’ve been to a few real estate market rodeos. One thing about Phoenix residential real estate, predictable it’s not. There’s no smart money to bet on here.

There are however some things to think about:

  • Due to inherently strong Phoenix demand, demand will return
  • When demand returns, and it could be soon, competitive bidding returns
  • When competitive bidding returns, you’re back to square one.
  • With over 100 homes coming on the market each day – You have choices
  • Currently, unless a deal comes up that’s a real deal, you may (probably) are the only one ready to make an offer.
  • Sellers are much more open to lower than asking prices and terms
  • Contingencies, such as selling a home first, are also considered, especially if your home is already under contract.

What would it take to flip the script back to a seller’s market? Not much. For one, an interest rate dropping to 4% would, in my opinion re-open the flood gates. Just as sellers are now bemoaning missing the top of the price market, buyers will likewise become very disappointed for not taking advantage of this window of opportunity now. But will that happen in a few months or a few years, or ever? The Lord knows!

There is however, a really strong case for getting back into the buyer market now: If you actually find the home of your dreams that you can see yourself enjoying for many years to come, and you’re able to secure that home and begin that enjoyment now, what is the value of that?

I’d say that’s something to clog about!

The Dog Days of Real Estate Data for Phoenix and Scottsdale

The Dog Days of Real Estate Data for Phoenix and Scottsdale

The “Dog Days of August” are upon us. With that delightful news, let’s take a look at the Phoenix Metro “Dog Days of Data,” which, if you’re in the Buyer’s camp, the trending good news continues. If you’re in the Seller’s camp, well, compared with one year ago, your home’s value has risen over 10%. This is over twice the annual average appreciation of the last 25 years!

The not-so-great news is that the top of the market has peaked. It’s in the rear-view-mirror. Put that out of your mind. Adios!

When did it peak? Back in May. (The Cromford Report) On May 22nd, the average sales price per square foot (See Chart below) topped out at $306 per square foot (PSF). Last week according the to the chart, we were at $290 PSF – a 5% drop in two months. Actually, the market peaked 30 days before that (mid-April), due to typical 30 day closing lag time.

Now there’s a caveat to what I just expressed. You’ve heard us say for years, that ‘all real estate is local.’ The data we generally use is the ‘Phoenix Metro’ single family residential real estate market. Every zip code is different. Every community within a zip code is different. And finally, every residence within a community is different.

Interestingly, some higher end markets are currently the slowest to be dropping, including Paradise Valley, Fountain Hills and Cave Creek. Along with those cities, Scottsdale, Avondale, Goodyear, and Mesa are still technically in a Seller’s Market, but are heading towards balance shortly. Currently in balance are Phoenix, Glendale, Peoria, Chandler, Surprise, Tempe, and Gilbert. Most of these in balance will be in a buyer’s market next week at the current rate of price drops. This is how quickly the market is adjusting.

Communities that are now in a firm Buyer’s Market are Buckeye, Queen Creek and the town of Maricopa.

So, to end with a positive spin, buyers, your time to get back into the market is soon, if not now. Let’s get you set up with a daily automated list of homes to view online – available supply of homes are increasing daily. Mortgage rates have actually dropped as well. We’ve also seen a large drop for the price of gas at the pump, which may mean lower inflation, which could mean even lower rates ahead.

Scottsdale Speeding Toward a Balanced Market

Scottsdale Speeding Toward a Balanced Market

The Cromford Report reports that on March 16th, of this year, the Greater Phoenix Metro cities totaled 4,367 listings. Just over 4 months later, we now total 16,235 current listings and growing. The following housing styles and their listing supply increase:

  • Single-family Detached – up 344%
  • Townhouse – up 370%
  • Apartment-style – up 288%
  • Gemini / Twin – up 130%
  • Loft-style – up 240%
  • Patio Home – up 257%
  • Mobile Home – up 65%
  • Modular / Manufactured – up 20%

Many of our cities are now in the “Balanced Market Zone” and some, including Buckeye and Queen Creek are now in a “Buyer’s Market.” This incredible speed from Seller to Buyer’s market is historic.

Renter Revival in Scottsdale and Phoenix

Renter Revival in Scottsdale and Phoenix

Good news continues for prospective Scottsdale and Phoenix renters who haven’t gotten much of a break over the last few years. The long-term rental supply is growing… QUICKLY! There are over 2,900 active rental listings (on our local MLS). This is an 18% increase in just one month, up from 2,463 rental listings last month.

This means that renters will have more choice with less competitive bidding. And if you’re looking for single family detached (SFD) homes to rent, those numbers are increasing the fastest. 2,088 of the 2900 total rentals listed, per the Cromford Report, are in the SFD category.

And what about rental pricing? Pricing is on the downward slide as well. The average rental asking price in the MLS is down to $1.57 per square foot (PSF), compared with $1.63 PSF last month and $1.94 one year ago.

It’s really important to get the word out to folks about the changing rental market. Many may believe that the market is what it was 6 months ago. Not so. This is a radical change occurring as we speak .

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