Looking at numbers from a historical perspective, the residential real estate market in Greater Phoenix is better than expected when activity started slipping late in 2022, according to the latest market data from Phoenix REALTORS.
Median sales prices in July remained generally steady at over $466,000, but down from $475,000 in June. However, the percentage of list price received 98.8% and has risen slightly each month since December. July almost reached last year’s 99.1%. July’s median sales price was higher than the year-to-date $455,000 median.
“It may take a little digging, but there is some sparkle in the July residential sales data,” said Butch Leiber, president of Phoenix REALTORS’ Board of Directors. “No question, compared to last year, sales are off and new listings have dropped, but it’s critical to acknowledge that key trends show stability as we move into the fall months.”
Closed deals held steady for July 2023 compared to the previous year, down just 3.2%. While the 4,725 deals delivered last month were significantly less than the nearly 7,400 in 2021, they are tracking exactly where Phoenix REALTORS’ expect them to be.
“Looking at the market, 2020 to 2022 were anomaly years of unbridled boom brought on by low interest rates and homebuyers flush with cash off of the pandemic, so it’s not really an apples-to-apples comparison,” said Leiber.
As a case in point, pending sales sat at 3,224 in July, down from 4,711 last year and 7,201 in 2021.
“The good news is that the number of days on the market, 57, while more than a year ago, has been trending downward since January,” said Leiber. “For the year-to-date, the data sit at 70 days, a number generated by an inventory sitting around 80 days on the market during the first quarter this year.”
The Phoenix metro market continues to have challenges with affordability, with the index dropping to 54. Although the area’s median income keeps rising, it is at 54% of what is needed to afford the median home. June and July 2023 tied with October 2022 for the lowest indices of the last 10 years.
“Inventory shrunk slightly in July compared to last year,” said Leiber. “It dropped to 2.3 months compared to 2022’s 2.6 months. Since March, it’s been holding in the low end of the two-month range.”
The National Association of Realtors estimates that the now stable, but higher than last year, interest rates are still keeping sellers from listing homes, and decrease affordability and selection options for buyers across the country.
