The first buyer benefit to be occurring amidst the current Phoenix Metro market adjustment is the number of homes rapidly coming on the market, hence, increasing inventory.
Another buyer benefit and market gauge we’ll be looking at a little more closely today are the number of downward price changes occurring in the market. But first the main sales numbers for the month of May:
- Active Listings: 9,439 vs 4,917 last year – up 92.0% – and up 41.1% from 6,688 last month
- Under Contract Listings: 10,249 vs 12,317 last year – down 16.7% – and down 5.9% from 10,880 last month
- Monthly Sales: 8,729 vs 9,663 last year – down 9.7% – and down 6.1% from 9,295 last month
- Monthly Average Sales Price per Sq. Ft.: $303.55 vs $248.81 last year – up 22.0% – and up 0.4% from $302.43 last month
- Monthly Median Sales Price: $475,000 vs $390,000 last year – up 21.8% – and up 1.9% from $466,000 last month
Overall, the market is in full reverse.
First, the supply of homes for sale has risen 42% in just the last month and has almost doubled (92%) from one year ago. Next, sales have dropped almost 10% compared with May of 2021. Listings under contract (currently, the best current stat to observe) are down 6% from last month and 17% versus last year.
The highest lagging indicator, closed sales prices, continue to register amazing gains (hmm, those last two words sound like that great ole hymn but I shall refrain from inserting new lyrics😉). The monthly average sales price per square foot has increased 22% from one year ago and 0.4% from last month – quite substantial still! The monthly median sales price is creeping towards a half million and is currently at $475,000 – a 21.9% gain from last year’s median of $390,000 and almost 2% higher than last month, which was $466,000.
Sellers are now strongly responding to our moving market. Price cuts are now happening at an increasing rate. Last week alone, 1764 properties changed price with a median reduction of $11,000. This is a significant sign of seller determination to get ahead of our changing market. The last week that we’ve had as many price changes was November of 2019.
The great unknown is whether this is a short-lived cycle. The recent substantial rise of mortgage rates in a two-month period is without question bolstering inventory. The buyer window for increasing their home choices may (will?) only last as long as rates remain higher. If inflation begins to cool (note “if”) rates will drop and the fever to jump back into buying will strongly increase, bringing back many multiple offers, and the rise of prices.
So, I believe we’re in a window of opportunity for buyers. If they can swing it and can find that “right” home. Gopherit!
