Eager buyers and downsized sellers are expected to help 2024 bounce back from a tough year.
The Phoenix metropolitan area's residential real estate market endured unprecedented challenges in 2023, making it the toughest year since 2009 due to a lack of properties, record-high mortgage rates, hesitant sellers and other factors, Phoenix Realtors says. announced. . However, despite the challenges, the real estate agent sees signs of improvement and new opportunities on the horizon, and is looking towards a more promising year in 2024.
“Interest rates have fallen by more than a percentage point since October, and we're entering prime time for home sales,” said Cheryl Borden, new president of Phoenix Realtors' board of directors. “Experts predict that the worst is over and there will be plenty of opportunity for both buyers and sellers.”
According to the Census Bureau's most recent American Community Survey, Phoenix is virtually tied for first place, and Maricopa County remains the fastest growing region in the United States. An increasing number of new families, primarily from California and the central Midwest, are moving to the Valley for career opportunities, business opportunities, and quality of life, increasing the demand for quality housing.
“Hundreds of new homes and apartments are under construction and we anticipate significant interest in downsizing by current homeowners,” Mr Borden said. “Population growth, lower mortgage rates and increased housing stock are creating optimism that the market will turn around in 2024.”
Median sales prices in 2023 were down only 4.3% year-over-year, but at more than $440,000 per unit, it was the second-highest annual median price in Valley residential real estate history. Although prices remained relatively stable, the number of new listings decreased by 23.8% year-on-year, but monthly inventory supply increased by 3.7%.
“With fewer homes available and demand increasing, homes were on the market for 65 days at the end of the year, down from nearly 70 days four months ago,” Borden said. “This means sales will accelerate further into 2024.”
Worker-priced homes, or homes with a sales price of less than $300,000, moved quickly, spending an average of 57 days on the market. Homes priced between $300,000 and $500,000 waited an average of 65 days to sell, about the same as last year. Homes listed for more than $500,000 stayed on the market for a little longer, 67 days.
In the Phoenix Realtors data set summarizing 2023, the percentage of asking prices collected by buyers in 2023 decreased slightly compared to 2022, when buyers received list price, It was also revealed that the decline was 1.7%. The strongest market was for homes priced between $300,000 and $400,000, with sales increasing 5.1% through 2022.
Homes priced over $500,000 sold more than homes priced under $400,000, with 26,247 premium-priced homes and 26,050 other homes.
Home size also played a role in this number, with homes over 2,500 square feet up 13.5% year over year, while homes under 2,500 square feet saw a double-digit decline.
Phoenix and the East Valley had the highest price increases in 2023. Primarily, western and suburban communities had the lowest price performance.
Looking ahead, Borden believes there is significant opportunity for improvement into 2023. She believes lower interest rates and the Federal Reserve's desire to avoid rate hikes will increase sellers' willingness to make offers on their homes and downsize or change neighborhoods.
“Several major employers will be coming online in late 2024 and early 2025,” Borden said. “This means another influx of new families in need of housing to the Valley over the next two years.”
Borden said many long-time owners of family-sized units have significant equity and the possibility of downsizing to an all-cash or vacant home with very low mortgage requirements. He said there is.
“This could lead to a strong comeback in 2024,” she says.
Regional historical median price 2023
- Queen Creek: $600,000 (-2.3% change from 2022).
- Santan Valley: $408,500 (-8.3% change from 2022).
- Gilbert: $555,000 (-4.1% change from 2022).
- Chandler: $510,000 (-3.2% change from 2022).
- Mesa: $438,000 (-2.7% change from 2022).
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