Metro Phoenix real estate market reaching balance

August 22, 2022 at 11:07 am Leave a comment

Supply and demand for residential real estate is nearly in balance in Maricopa and Pinal counties, according to new statistics recently shared earlier this month by The Cromford Report’s Senior Analyst Tina Tamboer.

This does not mean that home sellers are going to lose money, Tamboer noted during the recent online conference call. Nor should the market’s leveling off after the hot sellers’ market of just eight months ago cause concern that the housing market will tumble into anything close to 2008/recession-era territory.

“Are we in a bubble? No — banks have not issued high-risk foreclosure loans in about 10 years,” Tamboer said. “Sellers are not losing money, but are getting a lower-than-expected return.”

The Phoenix metro area is “not plummeting — we’re adjusting,” she added.

Appreciation slowing to current inflation levels, analyst says

That said, homes for sale in the local market are still unaffordable for families that earn $88,800 a year — the reported median salary for Phoenix — according to the National Association of Home Builders, Tamboer said. Only 22.3 percent of homes sold in the Valley were affordable to potential homebuyers in that salary range as of Aug. 11, she said.

Even so, Tamboer said, “we’re seeing a leveling-off, not plummeting into a buyers’ or sellers’ market,” adding 20- to 25,000 listings on the market is considered normal.” In mid-August, there were approximately 17,500 listings available in the Valley, with 7,919 under contract, she noted.

Average days on the market for a new listing is 25, Tamboer said, noting that average was between 17-38 days in 2019.

For further comparison, Tamboer said average days on the market in 2008 was 130. “Twenty-five days is not a pre-crash level, historically speaking.”

Tamboer said that for home sellers, last year’s era of no concessions, above-list-price offers and waived inspections are over. 

“Over the next month, I expect to see more concessions as we had pre-COVID,” Tamboer said.

Current homeowners worried about “losing money” should note that, as appreciation on homes is slowing to around the inflation rate of about 8.5 percent, “that still means you are gaining equity,” Tamboer concluded. She added that in the current market, sales prices on homes in the Valley are within 2 percent of their asking price, on average.

“Everything is starting to calm down,” Tamboer said. “We are not plummeting into a buyers’ market.”

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