As of February 1, 2025, here’s a snapshot of the Phoenix housing market compared to the same time last year:
- Active Listings: 22,432 properties are currently on the market, marking a 44% increase from 15,574 listings on February 1, 2024. This also represents a 12.1% rise from 20,007 listings last month.
- Pending Listings: There are 4,408 pending transactions, a slight decrease of 3.7% from 4,576 last year. However, this is a significant 33% uptick from 3,307 pending listings in the previous month.
- Under Contract Listings: Including pending and contingent sales, there are 7,403 properties under contract, nearly unchanged from 7,423 last year, but up 35% from 5,496 last month.
- Monthly Sales: A total of 4,677 homes were sold, a 5.5% increase from 4,435 sales last year, though a 16.3% decline from 5,585 sales in the prior month.
- Average Sales Price per Square Foot: The average price reached $314.24, an 8.8% rise from $288.70 last year, and a 3.6% increase from $303.43 last month.
- Median Sales Price: The median price is now $453,500, up 5.5% from $430,000 last year, and a 0.8% increase from $450,000 last month.
Observations:
The significant rise in active listings, up over 12% from last month, presents challenges for sellers as buyers now have more options. In contrast, the 5.5% increase in closed sales compared to last year is encouraging, and the minimal 0.3% decrease in under contract listings suggests stability. However, the 35% monthly growth in under contract listings is less robust than the 45% observed in January 2024.
Notably, the average price per square foot has surged by 8.4% over the past two months and 8.8% over the past year, with most of this growth occurring recently. This surge is largely driven by a booming high-end market. In the past two months, there have been 142 closings of properties priced at $3 million or more, averaging $864 per square foot, compared to 92 such closings averaging $801 per square foot in the same period last year. For properties over $6 million, there were 35 closings averaging $1,047 per square foot, a significant increase from 9 closings averaging $1,074 per square foot last year.
These high-end transactions, while limited in number, disproportionately influence the overall average price metrics but have minimal impact on the median sales price. The median sales price has remained relatively stable over the past three months, currently at $453,500, slightly up from $450,000.
Interest rates remain a critical factor. The 30-year fixed rate hovers just above 7%, with little indication of significant reductions from the Federal Reserve. Consequently, demand is expected to remain subdued, and supply may continue to rise, albeit potentially at a slower pace than observed in January.
The contract ratio has improved from the 20s to 33 at the start of February, yet this remains below the 47.7 recorded on February 1, 2024.
Market conditions vary across the region. More affordable, outlying areas of the valley differ from the pricier neighborhoods closer to Phoenix. The high-end market operates independently, with little effect on properties priced below $1 million. High-end buyers are less sensitive to mortgage rates, focusing more on the performance of their investments. Should the stock or cryptocurrency markets decline, it could temper the momentum in the luxury housing segment. Absent such downturns, the high-end market is likely to maintain its current pace.
