Phoenix Housing Market Update Summary for June
We are now seeing a weakening trend in the market. Sellers are nervous and buyers are unenthusiastic. We are not in a buyer’s market overall, but some significant markets are. If current trends continue then more areas could join them as inventory continues to climb! Just Look how far the listing success rate has dropped.
Here are the basics – the ARMLS numbers for June 1, 2024 compared with June 1, 2023 for all areas & types:
- Active Listings 18,044 versus 11,730 last year – up 54% – and up 5.3% from 17,129 last month
- Pending Listings: 5,015 versus 5,696 last year – down 12% – and down 8.6% from 5,486 last month
- Under Contract Listings: 8,324 versus 9,028 last year – down 7.8% – and down 11% from 9,336 last month
- Monthly Sales: 7,508 versus 8,107 last year – down 7.4% – but up 6.6% from 7,046 last month
- Monthly Average Sales Price per Sq. Ft.: $297.71 versus $287.67 last year – up 3.5% – but down 2.9% from $306.61 last month
- Monthly Median Sales Price: $450,000 versus $425,000 last year – up 5.9% – and unchanged from $450,000 last month
Supply continues to climb, which is unusual for this time of year and we notice that the rate of climb has increased since last month. Buyers have 54% more homes to choose from than they had last year but still face 30-year mortgage rates of over 7% which is limiting demand. Sellers are starting to face serious competition from each other, and us listing agents are having to work hard to get their homes sold.
Most of the slightly positive signs we saw last month have disappeared. We have far fewer pending listings than last month and under contract listings are down 7.8% from this time last year. The closed sales count for May was higher than April but down 7.4% compared with last year.
Pricing was unexpectedly strong in April, but May has seen this trend reverse and the average price per sq. ft. is now up only 3.5% for the last year. The median sale price was unchanged, as it is far less affected by the luxury home market. It is up just under 6% compared to a year ago.
We are entering the weakest time of the year, between June and September when luxury home buyers are thin on the ground. They tend to find cooler places to hang out than face the heat of a Phoenix summer house hunting expedition. Investors are busy during the summer as bargains are easier to find and gross margins on fix-and-flips are looking very healthy these days. Investors tend to pay less than market value, so this also drives the average $/SF lower between June and September. I expect pricing to be flat to lower over the next 3 months, after a strong rise between January and May.
