Living In Scottsdale

April 2026 Phoenix Arizona Real Estate Snapshot

Mon, 20 Apr 2026 23:43:06 GMT

Single Family Home Prices Remain Stable Year-Over-Year

Rates Decline Again in April

For Buyers:

March was an eventful month as rates spiked from 5.99% to 6.64% per Mortgage News Daily. The spike was a direct response to uncertainty over the Iran war and its affect on U.S. inflation. Once the unemployment report was released showing an improvement from 4.4% to 4.3%, rates began drifting back down. By the time the CPI inflation was released at 3.3%, up from 2.4%, it had already been priced into the rates so there was little effect. As of mid-April, rates were back to 6.3% and trending down.

The effect of the rate disruption was a decline in buyer contract activity, in March they were up 10% and in April up just 1%. Contracts could begin to return as rates fall below 6.25%. The lesson buyers have learned over the past 3 years of volatile mortgage rates is patience. Rates have a recent history of knee-jerk spikes in times of unexpected uncertainty (i.e. tariffs, trade through the Strait of Hormuz), and declines after the shock wears off.

The increase in supply seen in January and February stalled in March and now in April as well. In February supply was up 9% over last year. In March supply was only up 4.8% and in April it is barely up 0.2% thus far. With both contract and listing activity stalled, they have cancelled each other out, thus maintaining the status quo for home prices.

While the conflict with Iran is not settled, the markets are responding as if they expect it to be a short-term influence on inflation. If that proves to be true, then there will be little impact on home values as they typically take 3-6 months to respond to a prolonged disturbance in the force. Since September 2022, the median mortgage rate is 6.89%. This puts the current 6.3% mortgage rate well on the low side of the last 3.5 years.

For Sellers:

Sellers have the least advantage in the condominium market under $300K as supply is up 20% over last year and contracts in escrow up only 13%. April sold prices are down 9.5% from last year in this segment with the median size sold at 1,048 sqft, historically prices for this segment are similar to where they were 5 years ago around May 2021. Conversely, Single family homes between 1,200-2,400 sqft have shown the most stability in prices over the past 3 years with minimal fluctuation.

The median sized single family home sold in Greater Phoenix this year is 2,003 sqft, which is 318 sqft bigger than 2001’s median of 1,685 sqft, 25 years ago. Typical home sizes vary based on city, which is reflected in their median sales prices. For example the 2026 median sized home sold in the city of Phoenix is 1,798 sqft and the median price is $482K. Compare that to a newer cities like Chandler where the median size is 2,061 sqft at $558K and Queen Creek at 2,659 sqft and $688K. While the Valley has endured a buyer’s market since November 2024, price trends are within 1% of last year’s prices for the majority of common-sized homes:

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2026 Cromford Associates LLC and Tamboer Consulting LLC

Metro Phoenix City Rankings for March 2026

Thu, 19 Mar 2026 02:10:17 GMT

This table ranks Greater Phoenix, Arizona cities by their annual average sales price per square foot.

This table ranks Greater Phoenix, Arizona cities by their annual average sales price per square foot. Only single family detached homes are included in these numbers, which show the least and most affordable areas in the Phoenix metropolitan area together with longer term pricing trends.

Annual averages are based on a relatively large number of sales and may not represent the current market accurately. They include sales from up to a year ago, and pricing may have moved a great deal since then.

March 2026 Phoenix Arizona Real Estate Snapshot

Fri, 13 Mar 2026 23:31:43 GMT

Listings Under Contract Now Up 10% Over Last Year

Fewer New Listings Entering Market, Supply Stabilizing

For Buyers:

It’s been a busy month in the housing market! Contracts in escrow are now up 10.2% over last year and are outperforming even 2023 and 2024 at this juncture. Influencing this increase in demand have been mortgage rates stabilizing below 6.2% since Christmas and even hitting 5.99% in the last week of February. While the Cromford® Demand Index shows the Phoenix market is 13% below normal, that’s an improvement from 16% below normal last month, and 24% below normal measured in August last year.

New listings have notably dropped off, however, as some sellers wait for better days to list their homes. While newly active counts in January were in line with last year, both February and March-to-date are down 7%. With fewer new listings replenishing those that have gone under contract, cancelled, or expired, the overall supply count has stopped rising. Last month inventory was up 9% over last year, now it’s dropped to 5%, and at this rate it could be below last year by next month.

While buyer demand for homes has been recovering, the recent war with Iran that started on February 28th has created some speed bumps along the way. Hopes are high that the effects are temporary, but the rising cost of gas threatens to affect the current rate of inflation in the United States. Mortgage rates do not like inflation, and in response they have risen from 5.99% to as high as 6.4% as of this writing. This increase in mortgage rate gives buyers two choices, to accept a 5% increase in payment, or a 5% drop in purchasing power.

The effect on the market could be a lag in contract activity as buyers wait to see if mortgage rates drift down again. If and when they do, then a surge of new contracts could follow. Rumors of increased tax refunds may also provide a welcome boost to the April season.

For Sellers:

Monthly closings so far are holding close to last year’s count, but current contract activity suggests that will improve over the next 4-6 weeks. The condo/townhome market is finally seeing some improvement. After starting off slow, condos under contract finally pulled ahead of last year by 1.3%. While this is welcome news, unfortunately it remains a tough market for condo sellers as inventory is 11% higher and sales prices continue to decline. This is especially true in small condos under 1,100 sq ft that are competing with newly built apartment complexes offering big incentives and lower rents to attract tenants. These small units have seen an accumulated price decline of nearly 17% since the peak of June 2022, which erases most appreciation achieved after mid-2021. Condos and townhomes larger than 1,100 sq ft have fared much better than the smaller units, but still have a tougher time than single family homes competing within the same price points.

Within the single family market, certain areas are hotter than others when looking at the ratio between what’s active vs. what’s under contract. Specifically, the zip codes surrounding the intersection of the 101 and I-17 in the North Valley. This area includes North Glendale, Moon Valley, and Desert Ridge. Other noteworthy areas with favorable demand for single family sellers are Maryvale, Tolleson and Laveen in the West Valley, and in the Southeast Valley South Tempe, Chandler, West Mesa and the I 60 corridor to Apache Junction.

For single family properties under $400K, the entire West Valley lights up hot with many zip codes showing a frenzy with more homes under contract than active for sale. Increasing the price range to $400K-$500K, then the entire Southeast Valley lights up with hot and frenzy activity. As the price rises to $600K-$800K, the entire north side of the 101 lights up with activity spanning Norterra, Moon Valley, Desert Ridge, Cave Creek, and North Scottsdale. The purpose to this story is to illustrate that one price point may be a frenzy in one area, cold in another, and balanced everywhere else.

The luxury market in particular has had an extraordinary season thus far. Specifically, sales over $3M are up 26% year to date, aided by a whopping 26 ultra-luxury sales over $10M. The biggest year for sales over $10M was 2025 with 32 sales. That was for the entire year. 2026 has already achieved 81% of 2025’s annual sales count before the first quarter is complete. There are currently 102 active properties for sale over $10M in the Arizona Regional MLS.

The message for sellers continues to be patience. The housing market is in recovery, but it’s a slow one.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2026 Cromford Associates LLC and Tamboer Consulting LLC

February 2026 Phoenix Arizona Real Estate Snapshot

Fri, 13 Feb 2026 01:09:49 GMT

Contracts in Escrow up 7% Over Last Year,

The Market is Better, but It’s Not Easy for Sellers

For Buyers:

The home buying season is entering its busiest time in Arizona, and so far contracts in escrow are 7% higher than this time last year and they’re expected to peak over the next 2-3 months. Currently, demand is considered 16% below normal for this time of year, but last August it was 24% below normal so conditions have improved since rates dropped to the low 6% last September.

The current level of inventory for sale is considered normal for this time of year, which is a full recovery after 14 years of documented chronic under-supply in Greater Phoenix. Total inventory in the Arizona Regional MLS is up 9% over last year and combined with lower demand places the Valley in a slight buyer’s market overall, with large central cities in modest seller’s markets and growing cities on the outskirts in prolonged buyer’s markets.

Not all cities are below normal in demand. In fact, Apache Junction is 23% above normal for demand and normal for supply, ranking the city as the 4th strongest seller’s market for now. Many growing cities in buyer’s markets have normal levels of demand, but high supply. These cities include Buckeye, Gold Canyon, Goodyear, San Tan Valley, and Surprise, where annual sales have increased quickly over the past year as a growing number of buyers have taken advantage of attractive seller and builder incentives. Developers have responded by scaling back the number of permits to avoid prolonging the oversupply situation and encourage a more balanced market.

Bottom line, buyer demand is improving as conventional mortgage rates have remained stable in the low-6% range for nearly 6 months now; both FHA and ARMs are in the mid-5% range. Non-luxury home prices below $800K are down an average of 4% from last year. Every 0.1% drop in the mortgage rate is 1% off the principal and interest payment, and every 1% drop in price is another 1%, each equates to an extra $10 savings per $1,000 in payment. Combining the rate declines and price declines since this time last year, mortgage payments are down an average of 14% for median-priced homes, so a $2,500 payment quoted last year would be $350 less this year for the same home. For those buyers who are in a position to purchase a home, there is little advantage to delaying a purchase 3-6 months for prices or rates to decline further as it may only save an extra $30 or less per month in payment.

For Sellers:

It’s business as usual for sellers. Professional advice last year is the same advice this year, but the market has improved compared to last summer. While January is the top month for luxury and retirement community listings to enter the market, March is the top month for mainstream sellers. These new listings create a surge of inventory in preparation for the peak contract months from February through May. This wave typically results in existing sellers lowering their asking prices to compete. It’s a cycle that repeats every year.

It’s natural for sellers to introduce their listings with prices that test the boundaries of what the market can bear. When transitioning from a seller’s market to a buyer’s market, buyers will increasingly refuse to engage at these elevated prices, ghosting the sellers until they bring their asking price within a desirable range. After more than a year of this behavior, sellers have become more moderate in their expectations at the onset, resulting in a 4% decline in early price reductions compared to last year. Once the list price comes within 2-3% of where the buyers believe it should be, then sellers increase their probability of an offer.

Buyers have become quite finicky, however, and aligning your price with existing comparable properties may not be enough. Proper price positioning today should focus on being the biggest “bang for the buck” in the buyer’s eyes instead of getting an extra dollar for every extra amenity and upgrade one has put into the home. Condition is important, offering a clean property that has been well-maintained with newer systems and few expensive projects for a buyer, combined with a competitive price, will aid in landing an offer.

While it seems reasonable to simply discount a home due to condition, this approach often fails in a buyer’s market. The extra money, effort, and time to bring a property up to par is often more than a buyer is willing to shoulder when there are other properties that don’t require the hassle. Sometimes providing a quote and a contractor who can perform the work right away, or even prior to close of escrow, can go a long way in addressing these concerns. Also, be aware of any new home developments that may be competing within 1-2 miles of your listing and within your price range, even if they’re not comparable in size or location, your potential buyer will be using them as a benchmark for condition, value, and incentives.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2026 Cromford Associates LLC and Tamboer Consulting LLC

January 2026 Phoenix Arizona Real Estate Snapshot

Fri, 16 Jan 2026 01:04:48 GMT

These Cities Had the Most Sales Growth in 2025,

Affordability Strains Show Signs of Easing

For Buyers:

Happy New Year! Buying season has begun in Greater Phoenix, and it’s kicking off with a wave of fresh new listings. In a typical year, January is the most popular month for luxury and retirement community listings to hit the market while March tends to be the peak month for the main stream. Within the first 3-4 weeks of the year, these new listings are met with buyer demand escalating dramatically in January, then tapering off before peaking in April or May.

New listings are coming in weaker than this time last year, but only down 2.5%. That’s still stronger than the 5 years from 2020-2024 which had the weakest counts in 25 years for January listings. Listings under $300K are seeing a significant increase in new supply, up 15% over last year and with nearly 3,800 active listings at this writing, comprising 18% of supply. This is the most affordable range in Greater Phoenix where sales prices are down 2-3% from last year and are continuing to decline. It comprises mostly condos and mobile homes in central cities such as Phoenix and Mesa, and mostly single family homes in the outskirts like Pinal County. All other new listing counts are in line with last year or weaker, which is contributing to a more balanced state between supply and demand as we begin 2026.

A $300K purchase with FHA is approximately $1,860/month before taxes and possible HOA. Mortgage payments on properties under $300K can compete with rent, but not necessarily when tenants are upgrading their living space. For instance, a tenant paying $2,100 in apartment rent in Scottsdale cannot afford to upgrade to a single family home in the same area for the same monthly payment. However, they may be able to purchase a similar unit in the same area, or they could purchase a single family home in an outer city like Maricopa and commute.

This is where the affordable housing debate can get messy. Listing counts are telling us that the supply of affordable homes under $300K is rising and sales of those units are also rising (up 7%), suggesting that affordability strains are easing. However, 2025 sales over $500K were also up 7% while sales within $300K-$500K were near identical. If there were truly a lack of affordable homes, then supply under $300K would be rapidly declining like it did from 2020 to 2022 where there were fewer than 500 for sale, and prices would be rising. But that’s not happening. Evidence suggests that it’s not a lack of affordable homes to purchase, but an aversion to moving out of a desirable area.

For Sellers:

2025 ended with total annual sales up 3.5%, equivalent to 2,351 more sales through the MLS than in 2024. Local builder reports* show new home sales down nearly 6% for the year and 2025 permits for new construction were down a significant 21%. Nationally, builder optimism is low for future sales, reportedly due to labor and lot shortages. However, some cities with a lot of builder activity saw sales shoot up the most in 2025.

By number of sales per the Maricopa County Recorder’s Office, the following cities saw the biggest jumps in closed sales last year: 1) Goodyear with 414 more sales, up 16%, median price $486K; 2) Scottsdale with 335 more sales, up 5%, median price $900K; 3) Peoria with 245 more sales, up 7%, median price $515K.

By percentage growth of sales, the following mid-sized cities saw the biggest proportional increases: 1) Waddell up 36% with 178 more sales, median price $468K; 2) Sun Lakes up 32% with 122 more sales, median price $470K; 3) Anthem up 29% with 64 more sales, median price $574K.

The 2025 annual median sales price for Greater Phoenix is $451K, but it’s interesting to note that half of the cities with sales growth had considerably higher median prices. Considering that most of 2025 operated with mortgage rates in the high-6% or low-7% range, entering 2026 with rates ranging in the high-5% and low-6% means payments are at least 10-12% lower on the same priced homes from a year ago. This bodes well for first quarter sales in Greater Phoenix in 2026.

While sales are expected to increase, prices are not. Price is the last measure to move when a market shifts, and it can take up to 3-6 months to emerge. Price appreciation remains stagnant in the middle price ranges, rising in upper ranges, and declining under $400K. Greater Phoenix is pulling out of a buyer’s market and edging towards a balanced state, but a seller’s market isn’t on the horizon.

*Per RL Brown Reports, a local specialist on new home construction data.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2026 Cromford Associates LLC and Tamboer Consulting LLC

Is Metro Phoenix in a buyer's market or a seller's market?

Mon, 29 Dec 2025 22:42:19 GMT

Cromford® Market Index for the single-family markets in our 17 largest cities

The Cromford Market Index is a complex algorithm that measures many supply and demand data points and outputs a number. 100 (+/- 10%) is a balanced market. Values over 110 favor sellers, and the higher the number the stronger the seller's market is. Values under 90 favor buyers, and the lower the number the stronger the buyer's market is.

This table is quite startling - the market balance is now swinging quickly towards sellers, yet this does not seem to be reflected in market commentary in the general media. This shows the advantage of measuring the housing market every day, rather than once a month. One month ago, the situation looked bleak for sellers. The average CMI has fallen by -4.3% in the month prior to December 1.

Today we see an average CMI improvement of +16.3%.

It is not just that supply has been falling rapidly, we are now seeing stronger demand. It being December, this may easily go unnoticed by those not paying close attention, but the numbers do not lie. Relative to November, December's demand numbers are improving. If this trend rolls over into January and continues, we could see a much more positive picture during the first quarter than we expect just 3 weeks ago.

The swing in favor of sellers is most noticeable in Paradise Valley, Avondale, Chandler, Tempe, Mesa, Glendale, Gilbert and Phoenix. Only Goodyear has yet to get with the program. Scottsdale is late to the party but is starting to swing over the last week.

We now have 5 cities in the seller's market zone over 110, 5 cities in the balanced zone between 90 and 110 and 7 in the buyer's market zone under 90.

December 2025 Phoenix Arizona Real Estate Snapshot

Fri, 12 Dec 2025 22:16:26 GMT

Optimism Emerges for 2026 Home Sales,

Incomes Up 33% in Maricopa County since 2020

For Buyers:

Journalists reporting on housing affordability are frequently quoting sources that reference median household income. Household income can be broken down into two categories, family and non-family households. The US Census defines a family household as two or more people living in a home and related by blood or marriage. Non-family households are all others, including non-related people living as roommates or people living alone. Non-family household income is typically much lower than family income and is more suited for measuring the affordability of rental housing. Family household income is more suited for measuring the affordability of purchasing a home.

From 2020-2024, the median annual household income in Maricopa County rose 33% from $68K to $91K. The non-family median household income rose from $44.5K to $59K. Family income rose from $80K to $108K; and married family income, a subset of family income, rose from $95K to $126K.

The lending industry considers 28% of gross income an affordable monthly payment for mortgage or rent. For a family household that’s roughly a $2,500-$3,000 payment. At a mortgage rate holding steady around 6.25%, that payment supports homes priced between $350,000 and $500,000 in Maricopa County. That budget will support roughly a 1,500-1,800 square foot single family home, which will trend in the mid-$300s in the West Valley, and the mid-$400s in the Southeast Valley.

Incomes are not stagnant in Maricopa County and have been rising at a significant pace since 2020. It’s home values that have been stagnant for 3 years waiting for family incomes to catch up and mortgage rates to decline. Inventory under $500K accounts for roughly 57% of all inventory for sale and is up 16% from last year. With rates holding steady in the low 6% range for the last 4 months, demand and optimism is up for the onset of 2026.

For Sellers:

November closings were another success for Q4 2025, up 3.3% from last November, except it was actually better than that. Last November had 19 closing days compared this November with 18 closing days, meaning this year November closed an extra 23 sales per day, putting the improvement at 9% instead of 3%. So far December is also outpacing last year with an extra 14 closings per day on average. If this is a peek into what 2026 may bring, then sellers should be optimistic for contract activity in January.

The big question is how many listings will line up to meet January’s expectation of increased demand. January is typically the top month for luxury, retirement and seasonal community listings to hit the market. However, new listings across all price points and areas often see a peak in March, providing ample selection for Spring buyers. This front-loading of inventory in the first part of the year often results in a rising number of price reductions as well, the level of which depends on whether we enter the year in a buyer’s market, balanced, or seller’s market.

Recent improvements in demand combined with declines in supply are pushing the Cromford Market Index back in the direction towards a balanced state. While Greater Phoenix is still in a buyer’s market overall, central and established cities are becoming the first to move back into seller’s markets. Most recently, Phoenix, Mesa and Tempe shifted back into seller’s markets within the last 30 days, putting nearly all cities in the Northeast and Southeast Valley in seller’s markets, with the exception of buyer’s markets Queen Creek and Sun Lakes.

Developing cities on the edges of Metro Phoenix are typically the last ones to pull out of a buyer’s market. Pinal County cities, for example, are buyer’s markets except for Apache Junction, which is a seller’s market. The West Valley is a mix as El Mirage is a small seller’s market and Peoria recently shifted into a balanced market, joining Glendale, Avondale and Laveen. All other West Valley cities are buyer’s markets.

Don’t expect much upward pressure on price in the short term, even if your city has shifted back into a seller’s market. Prices can take up to 6 months to show a response to a shift, which means the seller’s market must be maintained, and many of these cities are still quite weak. What sellers can expect is more showing activity, shorter days on market, and less pressure to reduce their price once the Spring buying season begins.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2025 Cromford Associates LLC and Tamboer Consulting LLC

November 2025 Phoenix Arizona Real Estate Snapshot

Fri, 14 Nov 2025 22:02:18 GMT

Best Q4 for Contract Activity in 3 Years for Greater Phoenix

First-Time Homebuyer Payments are Down 13%-15%

For Buyers:

It’s been an exciting month of November since President Trump floated the idea of a 50-year mortgage to help some buyers qualify to purchase a home. The initial reactions from the industry have spurred a healthy discussion on its potential impact on borrowers, affordability, demand. Since then, multiple ideas are circulating for new products that bring down payments without extending the term of the loan. It could get interesting!

For context, on a $400,000 loan at 6.25%, the PI payment on a 30-year is $2,463 and on a 50-year is $2,180, a difference of $283/month or 11.5%. But the cost of that savings is a much slower repayment of the loan. For example, after 3 years of payments a borrower would have paid down their loan by roughly $15,000 on a 30-year mortgage, but only $3,800 on a 50-year mortgage. It would take 9-10 years of payments to pay down the same 50-year mortgage by $15,000. This can create issues when it comes to pulling out an equity loan for expensive maintenance items like a new A/C unit or remodeling projects within 10 years of homeownership. That puts a lot of importance on annual appreciation to build equity.

The good news for first-time home-buyers looking under $400,000 is Greater Phoenix price measures have come down 10-14% from the peak of 2022, and 3-5% in just the last year alone. At 6.25%, mortgage rates are down from their peak of 7.25% at the beginning of 2025, and 0.5% lower than rates from last July, which has reduced the PI payment by 5-10%. Lower prices combined with mortgage rates down a full 1% puts payments down 13-15% over the course of the last year. This does not include the extra 20% off in the first year provided by temporary buydowns paid for by 60-70% of sellers in this price range. Supply of properties under $300K is up 39% over last year, prices are down 5%, October sales increased 21%, and new contracts are up 32% so far in November.

According to the Bureau of Labor Statistics, US wage growth has been outpacing the rate of inflation for 2 years now. Over the past 2 years, Greater Phoenix average hourly earnings have grown 12% while the concurrent CPI inflation rate for the area shows prices have only risen 3.3%. This growth combined with home prices coming down in the most affordable price ranges mean that a 50-year mortgage may not be needed to bring affordability measures into a manageable range. They may already be there for a growing number of buyers.

For Sellers:

It took a while for the buyers to mobilize, but better late than never. So far, this is the best 4th quarter Greater Phoenix has seen in 3 years for contract activity. Listings under contract are up 15% over last year with notable improvements in the market under $300K and the market over $1M. The government shutdown didn’t help closings for FHA and VA transactions, especially between $300K-$600K, but October saw a 3.3% increase in sales regardless, and closings delayed will add to the November sales counts.

The Federal Reserve met on October 29th and announced a 0.25% decrease in the Federal Funds Rate and the end of the reduction of their securities holdings as of December 1st. This is one more step towards easing up on quantitative tightening and should be stabilizing for future mortgage rates. That is good news for sellers.

In the meantime, stock market performance, corporate profits, and cryptocurrency have performed well enough to boost the luxury market in Q4. Contracts in escrow between $1M-$2M are up 25% over the past 5 weeks, and up 16% over last year. Contracts in escrow over $2M have risen 25% over the past 9 weeks putting them up 7% over last year. It hasn’t been enough to boost contracts in retirement communities much, but Sun City, Sun City West, and Sun Lakes are not doing worse than last year.

Contract activity typically drops after the Thanksgiving holiday until the new year begins. This sparks a wave of price reductions just before Thanksgiving followed by just a trickle of reductions in December. January is the most popular month for new listings to hit the market, so properties that don’t sell between now and December should expect another wave of price reductions in the first few weeks of January.

Overall, while demand is slowly improving, supply is still on the rise and keeping most cities in a balanced or buyer’s market. Prices are still under pressure and buyers are looking for the best value for their budget. Competition and negotiations can get fierce in December, especially in those areas competing with new home subdivisions.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2025 Cromford Associates LLC and Tamboer Consulting LLC

Metro Phoenix City Rankings for November 2025

Fri, 14 Nov 2025 17:30:51 GMT

This table ranks Greater Phoenix, Arizona cities by their annual average sales price per square foot.

Metro Phoenix City Rankings for September 2025

Thu, 16 Oct 2025 00:18:07 GMT

This table ranks Greater Phoenix, Arizona cities by their annual average sales price per square foot.

October 2025 Phoenix Arizona Real Estate Snapshot

Thu, 16 Oct 2025 00:12:26 GMT

Sales Are Up 19% in This Price Range

Prices Are Down 15% in These Segments

For Buyers:

Mortgage rates dropped over 2 months from July 15th (6.85%) to September 16th (6.1%), lowering payments by 7.5% across the board and reaching the lowest rate in over a year. Real estate professionals swung open the gates and awaited a stampede of buyers to arrive. But, while there was a wave of refinances, purchase applications were stubborn. This is a common phenomenon. While rates are actively dropping, it’s human nature to wait and see where they stabilize before taking action, hoping to save even just a few extra dollars off a payment. Rates ultimately bounced and settled around 6.3%, and after 3 weeks of stability buyer activity finally ticked up to a level better than the past three years for October.

Mortgage rates weren’t the only measure dropping over the past 5 months, so were list prices. Listings under $1M saw asking prices drop an average of 2.5% from May to August, then stabilized in September and October. These properties do not yet have contracts on them, but when they do they will likely be closing in November and December, and possibly at the lowest closing price recorded all year.

The biggest price declines have been seen in the first-time homebuyer price ranges. Since July, sales prices for condos between $250K-$300K in Maricopa County (around 1,000sqft) have dropped 4.3% and are 15% below the peak prices of 2022. Single family homes in Pinal County between $300K-$400K (around 1,700sqft) are down 6.7% from last April, and are also 15% down from the peak of 2022. Single family homes in Maricopa County between $300K-$400K (around 1,500sqft) are down 2.9% from last year and down 13% from the peak of 2022. All of this is happening while the overall median price measure is showing just a mild increase year-over-year for the metro area, and just 4.5% below the peak of 2022. This is a prime example of how broad price measures spanning a large area are not always reflective of specific segments and can be skewed by better performing areas and price ranges.

Seller-paid concessions hit another high for September with 56% of MLS closings involving some form of closing cost assistance at a median cost of $10,000, which often includes a temporary rate buydown. This has been a unique hallmark of this housing cycle since rates skyrocketed in 2022. A tool typically used by builders to incentivize buyers has been adopted by everyday sellers and lenders in the resale market in order to compete. As appreciation has been stunted for the past 3-4 years and values declined this year, the number of sellers who can shoulder the cost of these incentives may diminish going forward.

If lower prices, lower mortgage rates, and a high share of seller incentives isn’t enough, seasonally the 4th quarter is the best time to be a buyer in Greater Phoenix. Supply tends to rise right before the holidays, but the rush of buyers doesn’t follow until after the 1st of the year. As a result, there’s a last hurrah of price reductions before Thanksgiving followed by heavier price negotiations and builder incentives as sellers aim to get under contract or close before the end of the year.

It’s common for buyers to get caught up waiting for evidence that it’s the “perfect time” to act, and delaying an affordable purchase in order to land some unicorn price and mortgage rate. Real estate is typically a long-term investment, however. The longer one holds a property, the more equity is built, appreciation accumulated, and risk of loss mitigated.

For Sellers:

This year has been a slog for sellers (and their agents) to say the least with stock market fluctuations at the beginning of the year stalling luxury sales, and volatility in mortgage rates. But there are signs things have gotten better. Lower mortgage rates and lower prices have stimulated demand in unexpected places. While homebuyer demand between $300K-$500K has been anemic, homes between $500K-$1.5M saw a boost of sales in September, up 19% year-over-year, which increased the market share from 36% to 38% of sales, and increased both the median price and average price per square foot measures for the Valley. The reason could be linked to jumbo mortgage rates dropping below 30-year conventional rates for the first time in 2 years, but also the popularity among high-wage buyers of adjustable-rate mortgages, which are currently averaging 5.8%.

While Greater Phoenix remains in a buyer’s market overall, the Northeast Valley including Fountain Hills, Paradise Valley, and Scottsdale are top seller’s markets, reflecting a drop in supply and sustained demand in these cities. Also seller’s markets: Anthem, El Mirage, Avondale, Chandler, Gilbert, Apache Junction, and Sun Lakes. Balanced markets include Phoenix, Glendale, Sun City West, Tolleson, Mesa, and Tempe. Buyer’s markets are mostly on the edges and outskirts where there is more new home development. They include Peoria (barely), Sun City, Surprise, Goodyear, Litchfield Park, Laveen, Buckeye, Gold Canyon, San Tan Valley, Queen Creek, Maricopa, Arizona City, and Casa Grande.

The 4th quarter is not the best time to be a seller, but going in with the right mindset, patience, and price strategy will go a long way towards obtaining a contract before the end of the year. For those who wish to wait, the 1st quarter comes with both a wave of new competing listings from January through March, and increased contract activity that lasts through May.

How to Spot Real Estate Scams (and Protect Your Investment)

Tue, 07 Oct 2025 18:32:13 GMT

Real estate scams are targeting more victims than ever before, and they're becoming increasingly sophisticated.

Real estate scams are targeting more victims than ever before, and they're becoming increasingly sophisticated. Nearly 10,000 Americans fell victim to real estate fraud in 2024, losing over $173 million according to FBI reports.¹ Even more concerning, about one in four home buyers or sellers encounter suspicious activity during the closing process, and one in 20 end up victims of wire fraud.²

These aren't isolated incidents targeting the naive or unprepared—they're professional operations that can fool experienced investors and savvy consumers alike. Scammers have adapted to modern technology and remote transactions, making their schemes harder to detect and more financially devastating than ever.

The shift to digital communications and remote closings has created new vulnerabilities that criminals actively exploit. Whether you're a first-time homebuyer, seasoned investor, property owner, or renter, understanding these threats and knowing how to protect yourself is essential. From wire transfer hijacking to fake listings, title theft, and impostor agents, real estate scams come in many forms. Here's how to recognize and protect yourself from the most common threats.

Wire Transfer Fraud: The Costliest Threat

Wire fraud strikes at closing when buyers are most vulnerable. Criminals hack or spoof emails from real estate agents, title companies, or attorneys, then send fake wiring instructions directing your down payment to their accounts. The setup appears completely legitimate—the email looks official, uses proper terminology, and creates urgency around closing deadlines.

Real estate wire fraud schemes cost victims $145 million in reported losses in 2023 ,¹ with typical losses exceeding $70,000 per case.³ For many homebuyers, this represents their entire life savings and down payment. By the time fraud is discovered, the money is usually gone forever, as these transfers are nearly impossible to reverse.

Critical warning signs include:

● Last-minute wiring instruction changes marked urgent or claiming emergencies

● Email address anomalies with letters off or different domains (like "titlle-co.com" instead of "title-co.com")

● Pressure tactics demanding immediate action to avoid closing delays

Protection requires verification. Always confirm wiring instructions in person or by calling verified phone numbers—never rely on email contact information. Many brokers now require wire fraud acknowledgment forms. ⁴

If fraud occurs, contact your bank and the FBI's IC3 hotline within 24-72 hours for the best recovery chances. ⁴

Rental Listing Scams: Too Good to Be True

Rental scams use fake listings or fraudulent "landlords" to collect upfront payments for properties that don't exist or aren't actually available. Scammers copy real listings with gorgeous photos and below-market rents to lure victims, particularly those under pressure to find housing quickly in competitive markets.

The emotional manipulation is deliberate—scammers create urgency by claiming multiple interested renters or limited availability. They often pose as property managers or landlords who are conveniently out of town, overseas for work, or on missionary trips, making in-person meetings impossible.

Red flags include:

● Unusually low rent for the area or property quality

● Remote landlords who claim they're out of the country and can't meet in person

● Upfront payment requests before property viewing or lease signing⁵

Never send money for rentals you haven't verified. Insist on inspecting properties before paying anything, and verify ownership through county records. Avoid wire transfers, gift cards, or cryptocurrency for deposits—these payment methods are nearly impossible to recover.

The implications extend beyond renters. Homeowners can also be targeted when scammers impersonate property owners to illegally rent out vacant homes. If you own vacant property or one that's listed for sale, monitor for fake rental ads using your address. Some counties offer property fraud alert services that notify you of suspicious activity.

Title and Deed Fraud: Stealing Your Home

Title fraud involves criminals forging documents to steal ownership of your property. They typically use quitclaim deeds with forged signatures to make it appear they own your home. Once they've fraudulently transferred ownership, they can take out loans against it, sell it, or rent it out, leaving you with a legal nightmare to undo. Vacant homes, investment properties, and homes owned free-and-clear are prime targets because fraud is less likely to be detected quickly.

The trend is accelerating as criminals become more organized. The FBI's Boston field office has reported a "steady increase" in quitclaim deed fraud cases, exacerbated by remote transactions. Between 2019 and 2023, over 58,000 victims reported $1.3 billion in losses to real estate fraud, including title scams.⁶ Some operations involve crime rings with teams specifically tasked with identifying target properties through public records.

Watch for unusual mail including notices of new mortgages you didn't initiate, stopped tax bills, or deed transfer notices. If you stop receiving property tax statements or get unexpected foreclosure notices, investigate immediately.

Protect yourself by monitoring your property records through county databases and setting up fraud alerts where available. Consider title insurance for additional protection.

Fake Buyers, Sellers, and Realtors

Identity scams involve criminals impersonating transaction parties or real estate professionals.

Fake buyer scams target home sellers with attractive cash offers, then send fake cashier's checks for deposits exceeding required amounts, asking sellers to wire back the difference.

Seller impersonation has exploded recently—more than half of U.S. real estate agents (54%) encountered seller impersonation attempts in 2023.⁷ Fraudsters pose as property owners to list and sell properties without authorization.

Fake real estate professionals create phony profiles, sometimes stealing legitimate agents' names and photos to mislead clients into paying bogus fees. In one recent Florida case, a scammer stole a real Realtor's identity online, misled multiple clients, and collected thousands in illegitimate fees before the fraud was uncovered.¹⁰

Always verify identities by checking photo IDs and confirming credentials through state licensing databases. Legitimate Realtors have license numbers you can verify independently. Meet in person when possible and independently verify property ownership through public records. If you receive unsolicited offers to buy your home, never provide banking information or accept funds from unvetted parties.

Bait-and-Switch Schemes

These scams promise attractive deals, then switch to inferior terms once you're hooked.

Rental bait-and-switch advertises great properties that are suddenly "unavailable," then pushes less desirable alternatives at higher prices.

"We Buy Houses" schemes offer inflated purchase prices, then renegotiate last-minute or assign contracts to other buyers, often leaving sellers with as little as 50% of market value.⁸

Mortgage bait-and-switch promises unrealistic rates requiring large upfront fees, then switches to higher rates or forfeits your deposit if you decline.

Trust your instincts when deals change suddenly or seem too good to be true. Get all offers in writing and avoid non-refundable upfront fees.

Best Practices: Your Defense Strategy

Work with licensed professionals. Use reputable real estate agents, attorneys, and title companies. Verify licenses and check reviews.

Verify all identities. Ask for photo ID and confirm credentials through independent sources. Meet in person or via video call when possible.

Protect personal information. Use strong passwords, enable two-factor authentication, and never email sensitive financial data.⁹

Avoid pressure tactics. Legitimate deals don't require immediate action that bypasses verification safeguards.

Use secure payment methods. Wire transfers should only go to verified escrow accounts. Avoid cash, gift cards, or individual wire transfers.

Monitor your property. Regularly check title records and set up fraud alerts where available.

Report suspected fraud to local police, the FBI's IC3, and the FTC to help protect others and potentially recover losses.

BOTTOMLINE

Real estate scams exploit trust and urgency, but the warning signs are consistent: bypassed safeguards, pressure tactics, unverified identities, and deals too good to be true. Protection comes from verification, patience, and working with experienced professionals who can spot red flags.

Whether you're buying, selling, or renting, take time to properly vet every aspect of your transaction. If something feels wrong, pause and investigate—it's better to lose a "great" deal than become a fraud victim.

Planning a real estate transaction? Let's discuss how to protect your investment while achieving your goals. An experienced agent can help you navigate the process safely and spot potential scams before they become costly problems.

Sources

FBI Internet Crime Complaint Center -
https://www.ic3.gov/AnnualReport/Reports/2024_IC3Report.pdf
National Cybersecurity Alliance -
https://staysafeonline.org/resources/5-common-real-estate-scams-you-need-to-know-about/
Eftsure -
https://www.eftsure.com/articles/wire-fraud-statistics/
National Association of Realtors -
https://www.nar.realtor/wire-fraud
Federal Trade Commission -
https://consumer.ftc.gov/articles/rental-listing-scams
Florida Realtors -
https://www.floridarealtors.org/news-media/news-articles/2025/06/quitclaim-deed-fraud-rise-fbi-says
American Land Title Association -
https://www.alta.org/news/news.cfm?20231108-Over-Half-of-US-Real-Estate-Professionals-Experienced-a-Seller-Impersonation-Fraud-Attempt-in-2023
MMBB -
https://www.mmbb.org/article/unmasking-real-estate-scams/
Federal Housing Finance Agency -
https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/FraudPrevention.pdf
NBC Miami -
https://www.nbcmiami.com/investigations/scammer-posing-as-realtor-costs-victims-thousands-and-unfairly-tarnishes-a-reputation/3598591/

September 2025 Phoenix Arizona Real Estate Snapshot

Tue, 16 Sep 2025 18:41:42 GMT

Payments Drop 12%, Monthly Sales Up 9.4%,

As the Market Turns: Could a Recession be Good for Housing?

For Buyers:

Be aware, the market is turning. Reading the Cromford® Market Index (CMI) for Greater Phoenix, a measure under 90 is a buyer’s market and 90-110 is a balanced market. Our index has been indicating a buyer’s market since November 2024 and hit bottom at a measure of 72 before turning mid-July. Two months later, as of September 11th, the CMI is up 9 points to 81. At this rate, it could surpass 90 and enter a balanced state by November, potentially ending a year-long buyer’s market and stabilizing prices.

Buyers may not have as much time as they think to purchase under the favorable negotiating conditions of a buyer’s market. Asking prices for homes have been declining for 4 months, but appear to have stalled over the past week. Mortgage rates in January were 7.26% per Mortgage News Daily, and on September 11th they averaged 6.27%, nearly a full percent change. Meanwhile, active mid-range listings between $300K-$600K have dropped nearly 2% in asking prices. What does this mean?

Let’s do the math. With every 1% drop in mortgage rate, all principle and interest payment measures across all loan amounts drop by 10%. So if a buyer was quoted a $2,400 monthly payment in January on a $350,000 loan at 7.26%, that PI payment would be $2,160 at 6.26%, saving $240/month. Combine that with a 2% drop in the asking price of the home, that saves another 2% off the payment, bringing the total savings to $288 and a payment of $2,112, a 12% discount compared to January.

That’s not all. In this buyer’s market, more than 60% of sales between $225K-$600K have sellers paying for the buyer’s closing costs, which often include a 2/1 rate buydown. This drops the buyer’s payment by another 20% in the first year, and 10% in the second, bringing the first-year payment down to $1,690 and second-year payment to $1,900 before taxes and insurance.

Over the next few months, sales prices will begin to show the decline active list prices have already endured. However, if mortgage rates stay low and the Cromford® Market Index continues to climb out of a buyer’s market, buyers may see their negotiating advantage dwindle. For now, all properties are officially “on sale”.

For Sellers:

Headlines on the economy are pretty scary these days with recession predictions reaching as high as a 93% probability from UBS last week. These are based on a continuous stream of weak jobs reports and an increase in the unemployment rate to 4.3% reported on September 5th. Ironically, history tells us that as the labor market weakens and recession looms, mortgage rates improve and homebuyer demand increases. In fact, in Greater Phoenix home sales actually increased over the 2001, 2008, and 2020 recessions despite high unemployment. How can this be?

As fears of a recession rise with unemployment, demand for bonds increases as people move their funds to safety. This pushes the 10-year treasury rate down, which in turn pushes the 30-year mortgage rate down. Even with higher unemployment, the vast majority of people are still working. Those who are stable in their employment see an increase in their ability to qualify when mortgage rates decline and are motivated to explore their options, thus increasing demand.

Buyers are not the only ones that get excited over lower mortgage rates, sellers do too. This means that while demand is increasing, more listings than expected could hit the market initially and create a speed bump for the Cromford Market Index on its way to a balanced state. This is something to watch for over the coming months. Additionally, the 4th quarter is rarely the best time to be a seller seasonally. While lower mortgage rates are improving demand compared to last year, buyer demand drops significantly over the holidays in November and December.

Finally, while recessions can activate the mainstream housing market, they will stall the luxury and retirement communities. These segments do not rely on mortgage rates (often paying with cash) and are influenced more by the performance of their investment portfolios, which tend to suffer in a recession.

What Makes a Great Long-Term Rental Property? A Checklist for Smart Investors

Mon, 08 Sep 2025 23:41:06 GMT

When executed wisely, rental properties can deliver steady cash flow today and significant wealth tomorrow.

Real estate continues to dominate as America's favorite long-term investment strategy. For the 12th consecutive year, 37% of Americans consider real estate the top investment choice—nearly doubling stocks at just 16%. ¹ This isn't just sentiment; investors are putting their money where their beliefs are, purchasing 13% of all homes sold in 2024. ²

The truth is, real estate offers unique advantages that traditional investments can't match. A rental property provides multiple income streams, delivering monthly rent payments while simultaneously building equity and appreciating in value. Plus, leverage amplifies returns: Even if you put down 20%, you’ll benefit from 100% of the property's appreciation gains. Tax advantages, such as depreciation and deductible expenses, can further boost profitability. ³

When executed wisely, rental properties can deliver steady cash flow today and significant wealth tomorrow. But success starts with preparation—knowing how rentals make money, who is best suited to invest, what to look for, and where to start.

How Rental Properties Build Wealth

Great rental properties create wealth through three primary channels that work together to compound returns over time:

● Cash Flow represents net monthly income after expenses. The formula: Total rent minus all expenses (mortgage, taxes, insurance, maintenance, management fees, etc.). A duplex renting for $3,300 monthly with $2,700 in expenses generates $600 monthly positive cash flow—money for profit or reinvestment.

● Appreciation refers to property value increases over time. Historically, U.S. home prices have risen approximately 3-5% annually. ⁴ A 5% annual appreciation on a $300,000 house adds $15,000+ to your equity annually from market gains alone.

● Equity growth also occurs as mortgage payments reduce loan principal. Ideally, tenant rent effectively covers these payments, so tenants are purchasing the property for you incrementally. If $500 monthly goes toward principal, you gain $6,000 in equity annually.

The total return combines all three elements. While individual components might not create overnight wealth, together they compound impressively for patient investors.

Who Should Invest in Rentals?

Rental property investing isn’t for everyone. The most successful investors tend to share a few traits:

● Long-term wealth builders with financial stability and risk tolerance typically succeed. Investment properties require substantial down payments (typically 20-30%) plus cash reserves for maintenance and vacancies. You need stable finances with emergency funds before investing, as real estate is illiquid. ⁵

● Detail-oriented, patient investors often find the greatest success. Nearly 90% of real estate investors encounter challenges—bad tenants, unexpected repairs, or incorrect pricing. ⁶ Smart investors educate themselves and analyze numbers carefully before buying.

● Hands-on, resourceful owners who can handle basic maintenance, repairs, and tenant management themselves also have an advantage. These investors can save thousands each year on property management and service fees, boosting overall returns.

If you align with these traits, rental property investing can be a powerful tool for building lasting wealth.

Where to Begin Your Investment Journey

The first step is to contact an investment-savvy real estate agent. We can be an invaluable partner in finding and securing great properties by offering:

● Access to off-market deals that you can’t find on your own. We have extensive networks and can sometimes help you uncover properties before they are publicly listed.

● Expert market knowledge to help you choose the right property. We know which neighborhoods, property types, and home features are the most desirable to renters in our area.

● Deal analysis assistance to maximize your returns. We can help you estimate cash flow, cap rates, and return on investment.

● Ongoing network support that extends beyond closing. We maintain networks of reliable contractors, property managers, investor-friendly lenders, and insurance brokers.

With the right guidance from day one, you can move forward with confidence and start building a portfolio that works for you.

Your Rental Property Evaluation Checklist

Not all rental properties offer equal investment potential. Smart investors use systematic criteria to identify truly great opportunities:

● Location & Market Analysis

Location determines everything—tenant quality, rental demand, and appreciation potential. Focus on areas with strong rental demand near employment centers, universities, or transit systems ensuring steady tenant pools.

Research local vacancy rates carefully. High neighborhood vacancy signals low demand, while low vacancy allows rent increases. Investigate safety and school quality—properties in low-crime areas with good schools attract stable, long-term tenants. ⁵

Evaluate regional economic trends beyond immediate neighborhoods. Growing employment opportunities drive housing demand. Research major employers that are expanding but avoid areas dependent on single industries. Check government infrastructure plans—new transit or development projects can boost values, but excessive new development might increase competition. ⁵

● Financial Analysis

Perform detailed cash flow analysis for every potential property. Calculate expected rent and subtract all expenses: mortgage payments, property taxes, insurance, HOA fees, management costs, maintenance reserves (budget 10% of rent), and vacancy allowances.

The “1% rule” provides a quick assessment—monthly rent should equal at least 1% of purchase price plus any necessary repairs. Therefore, a $200,000 home should rent for at least $2,000 monthly. ⁵ Run sensitivity analysis: What happens if rents drop 5% or expenses increase 10%? Great properties remain profitable under various conditions.

● Property Condition & Carrying Costs

Physical condition directly impacts returns. Older homes with outdated systems may require frequent, costly repairs. ⁷ Schedule professional inspections focusing on major components: roof, foundation, electrical, plumbing, and HVAC systems.

Consider property layout—standard configurations like 3-bedroom/2-bathroom homes appeal to broader tenant bases than unusual layouts. Factor in capital expenditure timelines for major items needing replacement every 15-30 years.

Research property tax rates and insurance costs carefully. Some areas have taxes so high that even nice properties won't generate profit. Get insurance quotes before purchasing, especially for properties in flood zones or disaster-prone areas requiring expensive additional coverage.

● Property Type Selection

For most investors, single-family homes, condominiums, or townhomes offer the best starting point. Single-family homes typically attract longer-term tenants who treat the property as their home, resulting in steadier income. ⁵

Unless you’re planning to use your property as a short-term or vacation rental, avoid highly specialized properties like luxury mansions or tiny studios targeting niche markets with higher vacancy risks. “Bread and butter” 2-4 bedroom homes in middle-class neighborhoods form successful long-term rental portfolio foundations. ⁵

● Due Diligence Requirements

Verify all numbers independently. Research comparable rents for similar nearby properties ensuring realistic projections. ⁷ Check sales comparables to avoid overpaying. Schedule professional inspections and read reports thoroughly—unexpected problems can transform great deals into money pits.

Understand local landlord-tenant laws covering eviction processes and deposit rules. Consult professionals, as needed, for valuable guidance.

If this checklist seems overwhelming, don’t worry! We can help with each of these items. By following this checklist, we’ll separate high-performing rental opportunities from costly mistakes and position you for long-term success.

BOTTOM LINE

Great rental properties aren't found by chance—they're identified through systematic evaluation. Properties that build lasting wealth combine healthy cash flow, solid locations, sound physical condition, and strong growth potential.

Success requires patience, proper analysis, and the right team. While markets fluctuate, well-chosen properties consistently reward investors through income, appreciation, and equity growth creating real wealth over time.

Ready to start building wealth through rental property investment? The fundamentals we’ve outlined provide your foundation, but local market expertise and deal analysis make the difference between mediocre and exceptional investments. Let's discuss how these principles apply to current opportunities in your target market.

Sources

1. Gallup - "Real Estate Still Best Investment" - https://news.gallup.com/poll/660161/stocks-fall-gold-rises-real-estate-best-investment.aspx

2. Realtor.com Research - "Investor Report June 2025" - https://www.realtor.com/research/investor-report-june-2025/

3. Investopedia - "Real Estate vs. Stocks" - https://www.investopedia.com/investing/reasons-invest-real-estate-vs-stock-market/

4. Redfin Blog - "Average home appreciation per year" - https://www.redfin.com/blog/average-home-appreciation-per-year/

5. Investopedia - "10 Factors to Consider When Buying an Income Property" - https://www.investopedia.com/articles/mortgages-real-estate/08/buy-rental-property.asp

6. Clever Real Estate Survey - "Residential Real Estate Investing in 2024" - https://listwithclever.com/research/residential-real-estate-investing-2024/

Investopedia - "5 Ways to Value a Real Estate Rental Property" - https://www.investopedia.com/articles/mortgages-real-estate/11/how-to-value-real-estate-rental.asp

Metro Phoenix City Rankings for August 2025

Tue, 02 Sep 2025 15:51:53 GMT

This table ranks Greater Phoenix, Arizona cities by their annual average sales price per square foot.

August 2025 Phoenix Arizona Real Estate Snapshot

Wed, 13 Aug 2025 23:24:14 GMT

New Contract Activity Bounces after July 4th,

Active Supply has Been Reduced 14% since April

For Buyers:

Since April, active supply levels have now declined 13.6% due to a large increase in cancelled and expired listings from May through July and too few new listings to replace them. July cancellations were up 64% over last year and expired listings increased 69%. Demand for homes has also begun to recover, helped by a drop in mortgage rates from 6.75% to 6.55% and a 14% increase in weekly accepted contracts since the 4th of July.

Despite the median sales price showing a flat trend over last year, asking prices are steadily declining when analyzed by price per square foot. Sellers contributing to their buyer’s closing costs and rate buydowns hit 56% of sales, and so far August concessions are hitting a record high of 58% of sales.

The largest declines in asking prices have been seen in condominium/townhomes under $500K, which are down 5.9% under last year compared to single family homes under $500K, down just 1.3%. Within the same price range, buyers negotiated down an extra 2.5% off of the last list price on condo/townhomes and another 1.3% on single family homes in July.

While things are looking very good for buyers right now, the Greater Phoenix market is no longer falling farther into a buyer’s market. Over the past 30 days, the Cromford Market Index started to reverse course as a direct result of lower supply and stabilizing demand. This could mean the days of this buyer’s market could be numbered if it continues at its current pace. Buyers who would like the benefit of seller incentives and zero competing offers for homes should probably get in the game. As affordability improves with reduced mortgage rates and lower home prices, more buyers will enter the market and sellers will be under less pressure to concede to every buyer demand.

For Sellers:

While metrics are improving for the Greater Phoenix housing market, it’s still in a full blown buyer’s market so sellers should remain patient when it comes to days on market. July and August so far are seeing a median marketing time of 48 days prior to an accepted contract, the highest for July in at least 11 years, and the count typically doesn’t get any lower between now and the end of the year. Marketing times are especially brutal in the condo market with a median of 69 days prior to contract, the highest recorded for any month in at least 11 years. Even condos under $250K are seeing a median of 79 days.

Even as the buyer’s market is easing up in the metrics, price will not see a bottom until 3-6 months after the Cromford Market Index re-enters a balanced state. If that were to happen in October or November, for example, then the bottom of price will emerge around February or March give or take. If sellers decide to wait, the good news would be more activity, their home may sell a little faster, and fewer will have to pay for the buyer’s closing costs. The bad news for sellers would be that they’ll most likely be getting a lower price for their home than if they sold today, so the money they save in closing costs could be a wash. Prices will not show much appreciation until the market re-enters a seller’s market, and that isn’t on the horizon at this time.

But there is hope, ironically. National economists are beginning to release higher expectations of a potential recession coming, with large banks such as Chase, Goldman Sachs, and Deutsche giving a range of 30-43% chance in the near future. This puts more pressure on the Federal Reserve to lower the Federal Funds Rate and stop reducing their securities holdings at their September meeting. The big number to watch is unemployment. If that begins to rise too sharply, then the Feds will ease up on their monetary policies, money will flow into bonds for safety, and mortgage rates will fall again. With home prices already down, that would lead to more contract activity in the fourth quarter and hopefully some relief for tired sellers. No one likes an economic recession, but it may need to happen to turn the housing market around faster.

10 Hidden Home Maintenance Tasks That Could Save You Thousands

Fri, 01 Aug 2025 17:14:10 GMT

As a homeowner, you’re likely diligent about the basics—mowing the lawn, touching up paint, and cleaning regularly. But what about the critical home maintenance tasks you don’t see every day?

Research shows that home maintenance frequently takes a backseat, even with the best intentions. In fact, a recent survey found that 60% of homeowners have postponed necessary maintenance or repairs, while 40% admit to paying for a major home repair that could have been avoided with better upkeep. ¹

Still, it’s not just about avoiding costly emergencies—it’s also about maximizing the return on your biggest investment. According to research by Thumbtack, homeowners who do put in the extra care are rewarded: Well-maintained homes sell for an average of 10% more. ²

Let’s explore 10 often overlooked home maintenance tasks and how they can save you thousands in long-term costs.

1. Gutter Cleaning: Your First Line of Protection

Clogged gutters can cause water to overflow and seep into your home’s foundation, attic, or siding. Left unchecked, this can lead to foundation damage, rot, and even flooding.

The real cost of neglect: While professional gutter cleaning averages $162 nationally (up to $390 for multi-story homes), water damage repair costs can add up—averaging $5,100 for foundation damage and $4,300 for a flooded basement. ^3,4,5

Your action plan:

● Clean gutters at least twice annually—in spring and fall.

● Use a gutter scoop or hose to remove debris.

● Consider investing in gutter guards to reduce future clogs.

This small task prevents major structural damage and prolongs the life of your home’s exterior.

2. HVAC Filter Replacement: Small Task, Major Impact

A dirty HVAC filter reduces airflow, causes your system to work harder, and increases energy use. It can also lead to health concerns from trapped contaminants circulating in your home’s air. ⁶

The hidden costs: A neglected filter can lead to clamped-up coils, furnace failures, and sometimes a complete system replacement costing $4,000-$12,000. ⁶

Your maintenance routine:

● Replace filters every 1–3 months, depending on filter type, usage, and the number of pets in your home.

● Opt for MERV 8–13 filters for efficiency and air quality balance. ⁷

● Schedule full-system annual servicing ($175–$550) to catch hidden issues early. ⁸

This simple task saves on energy bills (15-20% according to the Department of Energy) and extends your HVAC system’s lifespan. ⁸

3. Water Heater Flushing: Preventing Sediment Buildup

Over time, sediment accumulates in your water heater tank, reducing efficiency and shortening the unit's lifespan. Left unchecked, this buildup can cause leaks or complete tank failure.

The financial reality: Regular flushing prevents early replacement and may be required to maintain your water heater’s warranty. ⁹ You can do it yourself or hire a professional for around $160. ¹⁰

Your annual process:

● Turn off power and water supply to the unit

● Attach a hose to the drain valve and empty the tank completely

● Check your anode rod; it may need to be replaced every 3–5 years.

This simple routine extends your water heater’s life and preserves energy efficiency.

4. Dryer Vent Cleaning: A Critical Safety Task

Lint buildup in dryer vents doesn’t just reduce drying efficiency—it’s one of the leading causes of house fires in the U.S. ¹¹ They also force your dryer to work harder and longer for each load.

The cost factor: Professional dryer vent cleaning costs about $144 nationwide, while fire-related damage can run into the tens of thousands. ¹²

Your safety protocol:

● Clean dryer vents every six months using a brush kit, or call in a professional.

● Replace plastic ducts with rigid metal ones, which resist lint clogs.

● Monitor drying times—longer than usual may signal a blockage.

This potentially life-saving task improves both safety and appliance efficiency.

5. Refrigerator Coil Cleaning: The 35% Energy Drain

Your refrigerator’s coils help expel heat. When coated in dust, they force the compressor to work harder, increasing energy bills and shortening appliance lifespan.

The efficiency impact: Dirty coils can increase energy use by up to 35% and, over time, can lead to costly repairs or replacement. ¹³

Your simple solution:

● Check your manufacturer’s guidelines; many recommend cleaning every six months.

● Locate coils behind or at the bottom of the unit and use a vacuum or coil brush to remove dust and debris.

● Keep condenser fan areas unobstructed.

This $0 DIY task can trim your electricity bill—and prevent early breakdown.

6. Garage Door Lubrication: Prevents Costly Repairs

A squeaky garage door means friction—and friction leads to wear on moving parts, costly spring damage, and failed openers.

The mechanical reality: A new garage door opener can cost between $350-$1000 installed, but a can of lubricant only costs about $10. ¹⁴

Your annual routine:

● Check the manufacturer’s guidelines to choose the right lubricant for your garage door.

● Prioritize safety: Ensure the door is fully closed and cut the electricity.

● Check for any signs of damage before proceeding, and call in a pro if needed. ¹⁵

This simple task eliminates squeaks and avoids expensive mechanical repairs.

7. Sump Pump Testing: Your Basement's Guardian

Your sump pump quietly protects your basement from water damage—but it needs testing to ensure it works when you need it most.

The flood prevention factor: Sump pump failure during a storm can result in thousands of dollars in cleanup costs. ⁵

Your quarterly test:

● Pour water into the pit to ensure the float triggers the pump.

● Confirm pump and drainage are working correctly.

● Clean the inlet screen once per year to avoid clogs.

This 10-minute check gives peace of mind and avoids major flood damage.

8. Chimney Cleaning: Preventing House Fires

According to the National Fire Protection Association, the leading cause of home heating fires (30%) is a dirty chimney. ¹⁶

The fire prevention imperative: Professional cleaning costs between $100-$350 and is crucial for anyone burning wood. ¹⁷ The cost of ignoring this task includes chimney repairs and fire damage that can devastate homes.

Your annual safety check:

● Hire a certified chimney sweep for inspection and cleaning, if needed.

● Use only seasoned wood to reduce creosote buildup.

● Install a chimney cap to block debris and critters.

Professional chimney maintenance is a non-negotiable safety investment.

9. Roof Inspection: Protecting Your Shelter

Your roof endures a lot—storms, sun, pests—and while damage may start small, it can become unbelievably costly if ignored.

The structural stakes: A professional inspection averages $239, but some roofers will offer one for free. ¹⁸ Roof repair costs have surged 28.47% year-over-year. ¹⁹ A new roof now costs $9,500 on average. ²⁰

Your inspection process:

● Twice per year, perform a DIY inspection for missing shingles, cracked flashing, and sagging areas.

● Check your attic for stains or leaks after rainfall.

● Consider a professional inspection every 1-2 years, depending on your risk factors. ¹⁸

Early intervention prevents thousands in repairs and helps retain resale value.

10. Water Pressure Monitoring: Protecting Your Plumbing

Many homeowners never check their home’s water pressure, but levels above 80 psi can damage pipes, appliances, and fixtures throughout your home, leading to premature failures and leaks.

The pressure problem: Water pressure that’s too high can damage your pipes and lead to expensive repairs or flooding. Pressure that’s too low can impact the performance of your faucets and appliances. ²¹

Your annual check:

● Use a water pressure gauge connected to an outdoor faucet.

● Ideal pressure: 40-60 psi. Install a regulator if it runs high.

● Monitor for sudden changes that could signal a plumbing issue. ²¹

This small check helps you avoid hidden damage to your entire plumbing system.

Creating Your Home Maintenance Schedule

Rather than reacting to emergencies, create a proactive plan. Here's a maintenance chart that puts it all in one place:

The Maintenance Investment Reality

Homes with consistent maintenance routines sell for around 10% more than average.2 More importantly, budgeting 1–4% of your home’s purchase price annually helps prevent sudden, catastrophic expenses.22

As Lucas Puente, Economist at Thumbtack, notes: “Across the U.S., buyers should be prepared to spend at least a few thousand a year in home maintenance costs.”23

Bottom Line

Proactive home maintenance isn’t optional—it’s essential. The ten hidden tasks above are often overlooked, but they’re critical to preserving your home’s safety, energy efficiency, and resale value.

Ultimately, your home is an investment. Consistent upkeep helps you avoid emergencies, save on utilities, and protect your equity for the long term.

Ready to create a tailored maintenance plan for your home? I can connect you with trusted local service pros and show you how proactive upkeep contributes to your home's market value. Let’s talk about keeping your home in peak condition—and protecting one of your most valuable investments.

Sources

Finance Buzz -
https://financebuzz.com/homeowner-maintenance-repairs-survey
Thumbtack -
https://blog.thumbtack.com/investing-in-home-maintenance-pays-off-yet-the-majority-of-homeowners-are-under-budgeting-84426995b6c5
This Old House -
https://www.thisoldhouse.com/gutters/gutter-cleaning-cost
This Old House -
https://www.thisoldhouse.com/foundations/foundation-repair-cost
Forbes -
https://www.forbes.com/home-improvement/plumbing/basement-flooding-repair-cost/
HVAC.com -
https://www.hvac.com/expert-advice/consequences-not-changing-your-air-filter/
New York Times -
https://www.nytimes.com/wirecutter/reviews/furnace-and-air-conditioner-filters-we-would-buy/#how-to-choose-a-filter-by-its-merv-rating
Today’s Homeowner -
https://todayshomeowner.com/hvac/cost/ac-tune-up-cost/
Home Depot -
https://www.homedepot.com/c/ah/how-to-flush-a-water-heater/9ba683603be9fa5395fab901d7efffcd
Angi -
https://www.angi.com/articles/water-heater-flush-cost.htm
National Fire Protection Association -
https://www.nfpa.org/education-and-research/research/nfpa-research/fire-statistical-reports/home-fires-involving-clothes-dryers-and-washing-machines
Home Advisor -
https://www.homeadvisor.com/cost/cleaning-services/clean-dryer-vents/
U.S. Department of Energy -
https://www.energy.gov/energysaver/purchasing-and-maintaining-refrigerators-and-freezers
Angi -
https://www.angi.com/articles/how-much-does-garage-door-opener-cost.htm
Lowes -
https://www.lowes.com/n/how-to/how-to-lubricate-garage-door
U.S. Environmental Protection Agency -
https://www.epa.gov/sites/default/files/2016-11/documents/kit_2_fast_facts.pdf
Today -
https://www.today.com/series/how-often-should-you/chimney-cleaning-how-often-get-sweep-inspection-t104648
Angi -
https://www.angi.com/articles/how-much-does-roof-inspection-cost.htm
Bankrate -
https://www.bankrate.com/home-equity/most-expensive-home-maintenance-costs/#home-maintenance
Nerdwallet -
https://www.nerdwallet.com/article/mortgages/roof-replacement-cost
The Spruce -
https://www.thespruce.com/testing-water-pressure-in-your-home-2718692
Home Guide -
https://homeguide.com/costs/average-home-maintenance-costs
Zillow -
https://zillow.mediaroom.com/2017-07-31-Homeowners-Can-Spend-More-Than-9-000-a-Year-on-Hidden-Homeownership-and-Maintenance-Costs?mobile=No

July 2025 Phoenix Arizona Real Estate Snapshot

Tue, 15 Jul 2025 22:09:40 GMT

Guess Which City Bounced into a Seller’s Market this Month
Where Have Home Prices Dropped the Most?

For Buyers:

Welcome to July in Phoenix where it’s so hot we saw a bird pull a worm out of the ground with an oven mitt. The peak buying season is officially over, and while both supply and demand kicked off with a bang in the first quarter, the second quarter was a dud due to increased mortgage rates and market volatility.

By the end of May, many sellers threw in the towel and decided to cancel their listings or allow them to expire. Cancelled listings were up 46% in June compared to last year, and expired listings were up 79%. At the same time, the number of new listings added weekly to the MLS dropped 24% from week 22 (Memorial Day) to week 27 (Independence Day). All factors combined, the result was an 8% drop in overall supply over the last 5 weeks.

While all price ranges are seeing impact, the largest percentage inventory drop was recorded over $800K with a 14% decline compared with under $800K at a just a 5% drop. The increase in cancelled and expired listings on the high end is expected seasonally as June is typically the peak month for luxury sellers to pull out, but not to this degree. For example, Paradise Valley dropped 39% in active supply over the past 6 weeks, but contracts in escrow only dropped 5%. Ironically, this pushed Paradise Valley out of a balanced market and into the 3rd strongest seller’s market this month, the opposite of what most would expect during the heat of a Phoenix summer.

As for the lower end of the market, single family homes between $250K-$300K are up 38% in June sales, with a nice bounce in new contracts over the week of 4th of July. Single family homes between $300K-$400K are up 10% in sales. Both of these price ranges have seen prices drop an average of 3.5% since last year. Condos in the same range have dropped 5.5% in price and are down 11% in sales compared to last June. Mid-range homes in the $500K-$800K range are seeing unremarkable changes in both price and June sales volume.

As prices continue to drift down in this buyer’s market, contract activity is expected to improve compared to last summer.

For Sellers:

It’s business as usual for sellers as 55% of sales closed last month with sellers contributing a median of $10,000 to the buyers’ closing costs, and negotiations averaging 97.1% of list price. Sales volume is about even with last year, but supply is still up 41% despite recent declines over the past few weeks, keeping sellers at a disadvantage in most areas. This means that many prices are coming down.

The median time on market prior to an accepted contract is 44 days, unless you’re selling a condo or townhome, then it’s 59 days. While buyers are negotiating to 97.1% of the last list price, it’s not consistent across all price ranges and property types. Lower price ranges will often see less of a negotiation on price and more on closing cost assistance, repairs, and upgrade requests. Upper price ranges negotiate more off of the price.

For example, single family homes between $300K-$400K are negotiating within 99.1% of list, but closings of condo/townhomes in the same price range are within 97.7% of list. That can be a difference of $4,000-$6,000 in price negotiations because there are fewer large negotiating items in a condo compared to a single family home. Single family homes in the higher price ranges over $1M are seeing negotiations within 95%-96% of list.

Large negotiation gaps don’t necessarily mean sales prices are declining and small gaps don’t mean prices are rising. Sellers always list high to get the most out of the sale; sometimes the market obliges them and sometimes it denies them. The gap between the original list price and the final sale price, which can involve both price reductions and negotiations, is simply the difference between a seller’s expectation of price and what the market is willing to bear. Buyer’s markets are less obliged to grant sellers their price wishes.

June sales prices for properties under $400K were down an average of 4.5% from last year. The $400K-$600K range was down 2.4%. Mid-range prices from $600K-$1.5M were flat within 0.1%-0.8% over last year, and higher-range prices over $1.5M where buyers negotiate harder on price are up 4.4% on average in appreciation.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2025 Cromford Associates LLC and Tamboer Consulting LLC

June 2025 Phoenix Arizona Real Estate Snapshot

Fri, 13 Jun 2025 22:41:03 GMT

Active Supply Declines in May, Luxury Bounces
Housing Affordability is Getting Better

For Buyers:

There are three main measures that affect housing affordability: mortgage rates, home values, and income. In the past when home values rose too fast for incomes to catch up, it was mortgage rates that adjusted and brought payments back into range, but in this cycle rates have proven to be an unreliable, volatile ally.

The housing industry has been waiting three years for mortgage rates to decline and save the day, and as more time goes by without relief, the more pressure there is on home prices and incomes to adjust in order to increase demand. It is finally happening.

Recent reports from the Federal Reserve of Atlanta state that wage growth grew nationally at a rate of 4.3%, higher than the current 2.4% rate of inflation. Meanwhile in Phoenix, the Business Journals reported a whopping 9.3% wage increase from 2024 to 2025. Combine that with the local Phoenix rate of inflation at 0.3% and that means workers get to keep the majority of their wage increases.

Meanwhile, Phoenix is entering its 8th month as a buyer’s market. Overall price appreciation is flat, within 1% of last year and lower than the 2.4% rate of inflation, with expectations that it may start gliding slowly down over the next few months. Affordable properties under $500K (which made up 58% of sales last month) have already seen prices drift down 2.2% year-over-year.

The combination of increased wages, low inflation, and declining price measures in the most popular ranges means affordability is improving without a massive decline in mortgage rates. It is also creating an environment where buyer contract activity could increase sharply if mortgage rates were to adjust downward over the summer.

For Sellers:

Sales were down in May compared to last year, but consider it a temporary hangover from April. The announcement of surprise tariffs at the beginning of April led to volatility in both the stock market and mortgage rates, which led to lower contract activity for the following 3 weeks before buyers snapped out of it and got back into the game. Fewer accepted contracts in April led to fewer sales in May.

Consumer sentiment was dismal in April, but improved significantly in May citing a more upbeat outlook on business conditions, jobs, and incomes. This outlook was also reflected in the purchase mortgage applications index, which rose sharply to 18% over last year’s index measure and higher than it’s been in 2 years. This is a positive indicator for summer contract activity and sales.

The luxury market received some good news in May as crypto and stock portfolios bounced back from March and April lows, corporate profits for Q1 were strong, and exchange rates returned to normal for international buyers. The result was an unseasonal bounce in weekly accepted contracts over $1M, up 30% over 4 weeks. This is unusual since high end contract activity typically declines in May as temperatures pop over 100 degrees.

Meanwhile, more sellers have decided market conditions are too unfavorable for them and are taking a pause. While supply is still up 45% from last year, the last 7 weeks have seen a 3.4% decline. New listings added to the MLS every week has dropped 39% over the last 2 months, and are now at the second lowest level historically (2023 was the lowest year for new listings). Weekly listing cancellations are up 38% over last year, and expired listings in the last week of May were up 84%. In the past, cancelled and expired listings were re-listed right away and didn’t affect the total count, but this time sellers are taking a longer break and sometimes opting to rent their homes instead.

While cancellations are up across all price points and property types, for those in the luxury market June is the peak month for cancellations and sometimes (ironically) there can be a bigger drop in active listings than in buyer activity over the summer. More luxury listings typically hit the market again in October once temperatures drop below 100 degrees, but buyer activity doesn’t always rise with them over the holidays. For this reason, it’s not a bad idea to list a luxury property after June, even if it’s just to test the market for a few months and get valuable buyer feedback.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2025 Cromford Associates LLC and Tamboer Consulting LLC

May 2025 Phoenix Arizona Real Estate Snapshot

Fri, 16 May 2025 17:47:07 GMT

Are Homes Overvalued in Greater Phoenix?
Only 6 Cities Left in Seller’s Markets

For Buyers:

In April, there was a crisis of “crisis” headlines, spurred by unexpected tariffs and market volatility. The end result was mortgage rates rising from 6.6% to 7.1%, which frankly is nothing new for the housing industry. In fact, mortgage rates were higher at 7.2% just last January and even higher last May at 7.3% without any headlines screaming “crisis". Unfortunately, this time active buyers froze with indecisiveness and shock, resulting in an 18% drop in weekly accepted contracts for 3 weeks after the tariff announcement. Fortunately, the first few weeks of May saw a small recovery as some buyers woke up and got back to business.

From the mess of chaos erupted a wave of opportunistic negative predictions about the housing market across social media platforms. Even Newsweek ran an article suggesting that homes in Greater Phoenix could drop by 20%. While buyers would certainly swarm the housing market if property values suddenly dropped by 20%, the chance of that happening is slim. While Greater Phoenix is slipping farther into a buyer’s market, it’s not extreme enough for a collapse of that magnitude. Buyer’s markets over the past 25 years, excluding the 2008 sub-prime mortgage collapse, saw prices drop between 5% and 11% year-over-year, and those price declines were enough to pull the market back into a seller’s market each time.

Questions persist about the degree to which Greater Phoenix homes are overvalued. To answer this, a basis must be established prior to the 2005-2008 bubble/crash and a “typical home” defined. The median home sold in Maricopa County was 1,600sqft in 2000 and 1,900sqft in 2025, so a single family home of 1,500-2,000sqft is typical for this region. The annual appreciation rates from Q1 2001 thru Q1 2004 ranged from 3.6% to 5.3% with a median of 4.65%. The median rate across 25 years from Q1 2000 to Q1 2025 is 5.3% (high of 32.9% and low of –41.4%). Extrapolating the 4.65% appreciation rate over 25 years supports a price correction of 3% by next year. However, one could argue that prices are currently in line with where they would’ve been with a 5% annual appreciation rate over 25 years, below the 5.3% long term median and are already undervalued. Either way, the current buyer’s market supports declining prices over the next 3 months; 20% is extreme, but 3% is more reasonable. If mortgage rates move closer to 6.5% or lower, all projections will change again.

For Sellers:

Brace yourselves, some buyers have become drunk with power. Negotiations have evolved from repairs and closing costs to remodeling requests in some cases; asking to replace things that are functioning properly, but are simply not new or upgraded. Only 6 cities are left in seller’s markets, and they’re not very strong. They are El Mirage, Apache Junction, Tolleson, Chandler, Avondale, and Fountain Hills. Interior cities Glendale, Phoenix, Paradise Valley, Scottsdale, and Gilbert all dropped from seller’s markets to balanced markets over the past 30 days, joining Mesa, Tempe, Cave Creek, Anthem, and Laveen. The remaining 13 cities are still in buyer’s markets.

After having the best year ever for sales over $1M, volatility in the stock market in March and April caused lower luxury sales in April. At the same time, lower mortgage rates in March led to a higher number of closings under $500K in April. Thus sales under $500K went from 56.7% market share in March to 60.1% in April, pulling down both the average and median price measures, and showing a 3.5% drop month-over-month and 1.1% drop year-over-year. Both months averaged 315 closings per day. April saw a drop in contract activity, so May will be weaker for sales but hope remains for June.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2025 Cromford Associates LLC and Tamboer Consulting LLC

April 2025 Phoenix Arizona Real Estate Snapshot

Fri, 11 Apr 2025 20:52:53 GMT

Markets are a Mess, but it’s Business as Usual for Housing,

New Contracts Spike Between $250K-$500K

For Buyers:

It’s not easy to do predictions these days, even for just a month or two out. Home values typically don’t turn on a dime, so in order for a shift in supply or demand to have a lasting affect on home values it needs last for more than a few months. When a prediction is made regarding the housing market, it’s based on a level of expectation that current scenarios will continue. However, volatile trends in both the stock and bond markets have been changing by the hour due to abrupt and dramatic global trade negotiations, sending mortgage rates low and then high over the course of just a week. It’s like doing hard turns back and forth on the rudder of a large cargo ship, it’s a bumpy ride but there’s very little actual turning until the rudder commits to a position.

Fortunately, or unfortunately, volatility in the housing market is nothing new over the last 5 years. From extremely low mortgage rates, high demand, and astronomical appreciation from 2020-2021, to extremely high mortgage rates, falling demand, and depreciation in 2022, to moderately high mortgage rates, low-but-stable demand, and flat appreciation from 2023-2025. Real estate professionals have guided their clients through it all.

Emotions remain high in the news media headlines and consumer sentiment polls, but buyers continue to buy homes based on their personal needs, lifestyle, and financial situation. As of this writing, overall buyer demand in Greater Phoenix is holding steady, just about even with this time last year, with one unexpected spike in new contracts between $250K-$500K in late March. This coincided with a national 6% spike in FHA mortgage applications as qualified buyers took advantage of down-payment assistance and grant funds before regulations change regarding who may utilize them.

Supply continues to rise, putting buyers in good position during negotiations, and prices remain stable with the median up only 1.7% from last year. Negotiations are averaging 97.7% of the last list price, down from 97.8% April last year, but it varies by price range. Negotiations are still 99% of list on a $300K-$400K single family home, and 98.6% for $400K-$500K. On a home listed for $450,000, that’s a $6,300 negotiation to $443,700 on top of another $10,000 in median costs towards seller-paid closing costs.

For Sellers:

One segment of housing demand that does not care for the volatility in the markets is luxury buyers. Listings under contract over $1M has been drifting down for 6 weeks now as buyers take a pause to wait for some form of certainty to move forward. Despite this recent trend, contract activity still remains the 3rd best Greater Phoenix has ever seen, behind 2022 and 2024. Supply in this price range is also at record levels, which offsets the added demand and is keeping prices modest.

· 11 cities in Greater Phoenix are in very weak seller’s markets : Paradise Valley, Scottsdale, Fountain Hills, Phoenix, Anthem, El Mirage, Glendale, Avondale, Apache Junction, Chandler, Gilbert

· 4 cities are in balanced markets : Cave Creek, Tolleson, Tempe, Mesa

· 14 cities are in buyer’s markets : Peoria, Goodyear, Surprise, Buckeye, Laveen, Sun City, Sun City West, Litchfield Park, Queen Creek, Sun Lakes, Maricopa, Gold Canyon, Arizona City, Casa Grande

A weak seller’s market will not look too different from a balanced market, it only means that price appreciation will be slightly higher than the rate of inflation, which is just 2.4% per the most recent CPI measure. Sellers are always testing the top boundaries of price for a give, but in a buyer’s market they are routinely denied. This is reflected in the number of price reductions up 68% compared to last year at this time and at levels not seen since 2022. This is true even in seller’s markets of the Northeast Valley, with price reduction counts not seen since 2017. As a result, very few sellers are “greedy” in their asking prices as they are often lower or even with last year’s asking price per square foot. As with any buyer’s market, condition is a top priority for sellers along with pricing. In some cases that may be as simple as neutralizing kid’s room paint or accent walls, or as complicated as a new roof or major repairs prior to list.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2025 Cromford Associates LLC and Tamboer Consulting LLC

March 2025 Phoenix Real Estate Snapshot

Tue, 11 Mar 2025 19:21:11 GMT

It’s a Buyer’s Market. Why aren’t prices crashing?

Could Economic Uncertainty Help the Housing Market?

The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

February 2025 Phoenix Real Estate Snapshot

Fri, 14 Feb 2025 23:41:36 GMT

Fact Check February - Don’t Fall In Love With These 7 Narratives on Housing

There is no online shortage of armchair quarterbacks when it comes to prognostications on the future of home values and affordability. However, there are narratives that some people, and journalists, stubbornly hold to that are simply outdated or incorrect. Many of them were true a few years ago but are no longer true today. Here are just a few:

Myth #1 - Buyer demand is declining.
This was true in 2022 and 2023, but is no longer true today. While mortgage rates have knocked many buyers out of the game, buyer demand is now stable and following last year’s trend with little reaction to rate fluctuations.

Myth #2 - There is very little to buy under $300K.
This was definitely true a few years ago, but not today. In February 2022, there were only 90 single family listings active for sale under $300,000 in Maricopa and Pinal County. Today there are 534, mostly in Pinal County. Condo and townhome inventory is even more abundant by comparison. In March 2022, there were only 156 active condo/th listings while today there are more than 1,200, all of which are in Maricopa County.

Myth #3 - My income is too high to qualify for any homebuyer assistance programs.
Some grant and downpayment assistance programs correlate to an area, not income. Many have income limits as high as $150,000/year and some don’t have income limits at all. Putting in the research and finding a qualified loan officer to explain these programs could save thousands of dollars.

Myth #4 - I need to be a first-time homebuyer or renter to qualify for homebuyer assistance programs.
In most cases, this is not true. They may say first-time home buyer, but if you haven’t owned a home in 3 years or more, you’re a first-time home buyer once again according to HUD’s definition. Also, if you’ve only ever owned a home with a spouse, have a child, and are now divorced, you are also a first-time home buyer. Or, if you’ve only ever owned a mobile home. These are just 3 of the 5 HUD definitions for first-time homebuyer.

Myth #5 - Mortgage rates are too high, there’s nothing to be done about it.
57% of January sales between $200,000-$600,000 involved seller-paid incentives, most went towards a temporary buydown of the mortgage rate, and many home builders are providing permanent rate buydowns. Other sellers have FHA or VA loans that are assumable with rates below 5%. In fact, about 10% of all active listings fit this criteria. Some buyer assistance programs even allow grant money to buy down mortgage rates. Again, a little research goes a long way in hacking the affordability issues caused by mortgage rates.

Myth #6 - Housing is in a bubble and home prices are on the precipice of a crash.
One could argue that Greater Phoenix already had a bubble and price crash in 2022 when prices rose to their peak by May and declined a whopping 12.3% from May to December that year, with short-term flip investors taking the brunt of the pain. Since then, prices bounced and stabilized with most price ranges seeing less than 2% appreciation year over year today. That is less than the current rate of inflation, and what is expected after nearly a year in a buyer-leaning market. While Greater Phoenix is officially in a buyer’s market, it’s very mild. Under these conditions, sale price measures are showing most non-luxury buyer negotiations at approximately 1.9% below the last list price. That’s a huge improvement over 2022 where sales prices were averaging 2.4% OVER list price. Prices are declining in some areas, but not all, and not by leaps and bounds. Current supply and demand indexes do not support massive declines in sales prices, but shaving 1-2% off lower list prices during negotiations is not out of the question. Sellers are not pushing the market with outrageous list prices. In fact, most are in line or even below last year in some price ranges.

Myth #7 - I’ll sell my home “as-is” and price it aggressively with buyer incentives.
This worked in the mild seller’s market of 2023 and first part of 2024, but not now. In a buyer’s market, it’s okay to sell your home “as-is” so long as it “is” in excellent condition. The hierarchy of importance isn’t price first, then buyer incentives, then condition. It’s condition AND price, the importance of additional incentives depends on your area and price range. When everyone is offering low prices and buyer incentives, properties in good condition rise to the top.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2025 Cromford Associates LLC and Tamboer Consulting LLC

January 2025 Phoenix Real Estate Snapshot

Fri, 17 Jan 2025 23:44:45 GMT

Home Prices Rose 4.7% ... Or Did They?

What was Hot in December, and What Was Not...

For Buyers:

Buyer’s season has begun and new listings for January are the strongest Greater Phoenix has seen since 2020. New listings waned in November and December, so this rebound is a refreshing start for buyers in 2025 as supply is rising and sellers continue to be open to incentives and negotiations.

Hovering around 7.25%, mortgage rates continue to limit the general buyer pool. Currently, just over 5,600 listings are under contract in the MLS, but normally we expect to see at least 7,000-8,000 at this time of year. On the other hand, supply is around 21,000, the highest entry point for January since 2016-2017, fostering an environment favorable towards qualified buyers.

These conditions suggest home price projections should remain flat, either at or slightly lower than the rate of inflation annually. However, December price measures were significantly higher than the rate of inflation with a +4.7% growth in the median sales price and +6.7% for price per square foot. How can this be? Well, blame it on the luxury market.

Mortgage rates suppress buyers on the low end of the price scale, but don’t affect those on the high end. As crypto and stock investments spiked after the 2024 election, luxury sales over $1M over surged +37% over last December compared to just +11% for homes under $1M. This caused December’s data set to be more top heavy in luxury and skewed price appreciation measures high.

When December sales over $1M are eliminated, the annual appreciation rate per square foot falls from 6.7% to just 2.5%, in line with the rate of inflation. This is expected in a market that bounced between a buyer’s market and balance for most of the year. While mortgage rates are not ideal, they are temporary. Prices are stable, incentives abound, and sellers are negotiable. There’s no harm in getting qualified and taking a look.

For Sellers:

January is starting off pretty frigid overall, but not for everyone. When taking a broad look at Greater Phoenix, the gap between supply and demand can seem insurmountable. However, specific target price ranges and areas are lighting up the map with heated activity.

For example, the West Valley lights up in the first-time home-buyer price ranges between $250K-$400K, specifically Surprise, Waddell, Avondale, Tolleson, and Southwest Phoenix as high builder incentives combat affordability issues. Also lighting up with frenzy activity in this range is Mesa (85204), North Gilbert, and Chandler (85226).

The Southeast Valley heats up in the $400K-$500K range, as does Tolleson and North Glendale.

Luxury condo sales over $1.5M are insanely popular in Scottsdale 85251, 85255 and Paradise Valley. However, the condo market in general is under the most stress with many areas seeing zero contract activity and a 67% increase in competing supply under $400K. Condos between $300K-$500K and $600K-$800K rose in value from January-April last year, but those gains disappeared from April-December*. They are now starting 2025 dead even with January 2024 at 0% appreciation.

Homeowners insurance is going to be a major topic this year, especially for the condo market as many HOAs can no longer shoulder the extra costs without raising dues. More landlords facing increased insurance costs, HOA fees, and lower rents on apartment-style condos are experiencing lower returns and looking for an exit strategy.

As the housing market enters its high season, things will look up for sellers from now through May. How much contract activity lights up depends mostly on mortgage rates, however. Until then, sellers must continue to offer high incentives to buy down rates, keep their properties in top condition to compete, and resist the urge to press the market on price.

*using a 3-month moving average, sales price per square foot

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2025 Cromford Associates LLC and Tamboer Consulting LLC

December 2024 Phoenix Real Estate Snapshot

Fri, 13 Dec 2024 19:55:04 GMT

Predictions for 2025, What to Expect in Q1

It’s a Buyer’s Market, Will Prices Drop?

For Buyers:

The buyer’s market in Greater Phoenix is still young at just over 5 weeks old but isn’t getting worse thanks to supply stabilizing over the past two weeks. For some, this scenario brings anticipation of a decline in sales prices, however there’s more to this buyer’s market than meets the eye. There have only been 3 other buyer’s markets in Greater Phoenix over the last 25 years, and they are all unique in their circumstances and thus give us little to compare with our current market.

What can we expect in terms of price trends today with our new baby buyer’s market? That depends on how long the market stays friendly towards buyers. Sales price is the last measure to respond to a shift from a seller advantage to a buyers advantage. The first measure to crack is the seller’s asking price. When that doesn’t improve buyer interest, then buyer incentives increase. If that doesn’t improve sales, then negotiations begin to shave more off of the seller’s asking price. The whole process for sales prices to respond can take 3-6 months; so if the buyer’s market is brief there may be little effect on sales price trends.

Currently, price measures are flat and buyer incentives are high at 53% of November MLS closings with a median cost to sellers of $10,000. The last 6 months have the highest percentage of concessions ever recorded in Greater Phoenix and double the long term normal concession range of $4,000-$5,000.

The moral of this story is don’t rely on price measures to reflect the best time to buy. By the time prices hit a bottom the party is already over. Additionally, measures don’t reflect the plethora of “shadow” benefits that happen outside of price during buyer’s markets, like rate buy-downs, loan assumptions, seller acceptance of contingent sales, and major property improvements performed prior to close.

Will prices drop? Currently, December sales price measures are trending up over November, not down. If we attempt to correlate to the last buyer’s market of 2022 that lasted 4 weeks between November and December, price measures dropped just 2.7% during that time before immediately bouncing up again in January and February when mortgage rates declined to 6%. Buyers who bought at that time have the most appreciation accumulated within the last 3 years.

For Sellers:

It continues to be a frigid market for most zip codes in Greater Phoenix with the lowest contract ratio* we’ve seen since January 2015, 10 years ago. Mortgage rates have improved slightly from 7.1% in November to 6.8% as of December 12th, and most national lending experts believe they’ll stagnate for the rest of December. In order to see a notable improvement in demand, these same experts agree that mortgage rates need to drop below 6.5%. Sellers struggling the most are those who have owned for less than 3 years, and especially those who purchased in mid-2022 at the height of market price. Those sellers may need to hold on for another year or so to see enough appreciation to recoup their selling costs and down payment. However, those who have owned for 3.5 years or more still have significant equity to manage the expenses of selling in today’s market.

Sellers who purchased in 2021 have a possible advantage over those who purchased after then, and that’s a much lower mortgage rate which may be assumable by a buyer. Both VA and FHA mortgages are automatically assumable for a qualified buyer and this option could save the seller thousands of dollars in costly buyer incentives in addition to saving the buyer hundreds per month in their payment.

After 2.5 years of a challenging housing market, there is one thing sellers can look forward to right now; the Spring buying season that kicks off in mid-January and continues through May every year. The Spring of 2024 saw contracts increase 83% from January through May, and the bounce was 85% in Spring 2023. Pre-Covid 2019, the Spring bounce was 105%. If mortgage rates decline as expected in 2025, this Spring could see similar improvements for sellers.

*listings under contract divided by active listings

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2024 Cromford Associates LLC and Tamboer Consulting LLC

November 2024 Phoenix Real Estate Snapshot

Mon, 11 Nov 2024 22:02:07 GMT

You May Be a First-Time Homebuyer and Not Know It

Greater Phoenix is a Buyer’s Market Again, For Now

The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

October 2024 Phoenix Real Estate Snapshot

Tue, 08 Oct 2024 13:46:57 GMT

Federal Reserve Drops their Rate, Buyer Contracts Increase in September

Mixed Emotions for Housing on Positive Jobs Reports

For Buyers:

For the first time all year, listings under contract are higher than they were last year at this time. Over 4 straight weeks in September, average conventional mortgage rates stabilized roughly between 6.1%-6.2%, and 5.6%-5.7% for FHA, which was the sweet spot for buyers to mobilize. Weekly accepted contracts increased 12% during that time frame, confirming expectations that conventional rates need to be sub-6.5% to see a meaningful shift in buyer demand.

Some believe the rates declined as a result of the Federal Reserve reducing the Federal Funds Rate by 0.5pt on September 18th, but mortgage rates had already dropped in anticipation of the Reserve’s actions. It was the follow through of that anticipation that gave consumers the certainty to act and gave the industry hope that relief was on the way.

As the 4th quarter begins, the housing environment for buyers is the most favorable its been since December 2022, when there were more than 20,000 active listings in the MLS and a weekly average of 6,148 listings under contract. Back then, mortgage rates had also dropped below 6.5% and hovered between 6.1%-6.5% for 2.5 months. This October, mortgage rates are once again hanging in the mid-to-low 6% range, increasing buyer demand at a time when active listing counts are over 20,000 in the MLS.

Seasonally, this is the best time to be a buyer in Greater Phoenix. It’s typical to see active listings rise as weekly accepted contracts decline, giving existing buyers lots of homes to choose from and fewer competitors. Seasonally adjusted measures, like the Cromford Market Index are showing a market in balance, indicating very little fluctuation in price measures in either direction. In this environment, every drop in the mortgage rate means all properties go on sale.

Greater Phoenix has only seen a market this favorable for buyers twice in the last decade, and both times the opportunity was fleeting; lasting only 9 weeks in 2022 and 5 weeks in 2014.

For Sellers:

While conventional mortgage rates were in the low-6% range for 4 weeks, they popped up to the mid-6% range after the release of a positive employment report citing a decline in the unemployment rate and an increase in wages. The report, while positive, caused disappointment and uncertainty for those anticipating further rate cuts by the Federal Reserve, which indirectly could further improve mortgage rates and housing demand for sellers.

It’s not uncommon for mortgage rates to bounce up a little after significant drops, so it may only be temporary as rates are expected to glide down over the next year. In the meantime, only serious sellers need apply in this market with a slight buyer advantage. With a high count of competing listings for sale, property condition should be a top priority. Gone are the days of simply dropping the price for a less-than-perfect home, or offering a carpet allowance. Small jobs such as replacing carpet, deep-cleaning grout, or brightening up a living room with paint or lighting can make a huge difference in creating a positive first impression on buyers who may not have the funds, the time, nor the desire to do home projects.

Properties listed between $275K-$500K should also budget for incentives to the buyer and longer marketing times over the holidays. More than 62% of sales in this price range close with $8,000-$10,000 in closing cost assistance from sellers that typically contribute to temporary mortgage rate relief. This may be a stretch for those sellers who have only owned their home for 2-3 years as property appreciation has been flat year-over-year since September 2022, providing little equity to accommodate the added expense. Sellers who have owned for at least 3 years or more have more flexibility to provide buyer incentives.

Seasonally, the first half of the year is the best time for sellers in Greater Phoenix as buyer demand rises in the 1st quarter and peaks in the 2nd, tourism is at its peak and marketing times decrease. If mortgage rates decline in 2025 as many lending outlets predict, the Spring season could outperform the last two years as suppressed demand returns.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2024 Cromford Associates LLC and Tamboer Consulting LLC

September 2024 Phoenix Real Estate Snapshot

Wed, 11 Sep 2024 13:42:01 GMT

Sellers Get Off the Fence as Mortgage Rates Continue to Drop

Why Recessions are Good for Most Home Buyers, but Not All

For Buyers:

It may be hard to believe, but recessions are historically the beginning of a turnaround for the housing market. After enduring more than 2 years of declining sales, sellers and buyers may start moving and transacting again. While recessions are negative for the economy (as they coincide with higher unemployment), two things typically occur that turn the housing market positive.

The first is home value stabilization. In every recession since 1970 (except for one infamous recession in 2008) home values had minimal fluctuation and appreciation year-over-year. The second is mortgage rates. Every recession since 1970 saw mortgage rates decline while at least 90% of the labor force remained employed. According to the August employment report from the Arizona Dept of Economic Opportunity, private sector earnings rose 7.3% annually in June, and 5.3% in July. Both rates are higher than the rate of inflation, and higher than the rate of home price appreciation. The combination creates an environment for increased home sales as affordability improves due to higher incomes, lower rates, and flat home appreciation.

Unfortunately, Mortgage News Daily showed zero improvement in purchase mortgage applications in August. The housing market simply doesn’t move as fast as the stock market, and it takes time for buyers to warm their engines and apply for mortgages after rates begin their decline. Partly because they wait to see if rates continue down or stabilize, but also because they don’t have an acceptable home in sight for motivation. As a result, application data often picks up after showings increase.

Future buyers may have one other obstacle to overcome, and that’s selling their existing home. This is what Greater Phoenix is experiencing now. As expectations of sustained rate declines increase, it’s sellers who are getting off the fence first. Weekly new listings are up 11% since rates began their decline on August 1st. These sellers will most likely become buyers within 1-3 months. This creates a good opportunity for buyers who are ready today. An early boost in supply without an offsetting boost in competing buyers means the buying environment will remain relaxed and accommodating over the next few months until the new year begins.

For Sellers:

September and October are the last hurrahs for home sale activity as 2024 enters its last stretch. New listings activated during this time should be well priced and in competitive condition to the listings around them. The median marketing time before contract is currently 33 days, so most properties listed in September should expect a contract in October. However, sellers who wait to list until late October will run into holiday speed-bumps that could tack on an extra 1-2 weeks before an acceptable contract.

While lower mortgage rates are expected to boost demand in price ranges under $2M, they don’t have much effect on the high-end luxury market where 55% of sales over $2M are cash. Recessions are not good for luxury because they coincide with poor stock market performance and stagnate corporate profits, which are the primary drivers for demand in this segment. So far, multiple headlines warning of an approaching recession are not tanking the stock market, and luxury listings under contract for September are higher than any other year. Other good news for luxury sellers, high cancellation rates from May-July dropped supply counts and launched Paradise Valley back into a seller’s market. In fact, all luxury sellers in the Northeast Valley saw market improvements from lower supply counts.

However, uncertainty can still stall luxury sales in the 4th quarter. If unemployment rates continue to rise and uncertainty grows over a recession and the November election, the hope of an October rally could fade and contract activity stagnate until the election and holiday seasons have run their course. Hope and optimism will return at the kickoff of 2025 along with perfect weather, tourism, and an increasing flow of contracts.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2024 Cromford Associates LLC and Tamboer Consulting LLC

August 2024 Phoenix Real Estate Snapshot

Mon, 12 Aug 2024 23:27:28 GMT

Mortgage Rates Drop Again - Homes are 10% Off

Record Share of Sellers Paying Buyers’ Fees

For Buyers:

On August 5th, everything went on sale in the housing industry. As discussed in last month’s edition, multiple factors are pointing towards improvements in mortgage rates this year. Well, it happened faster than many were expecting at the beginning of August as average mortgage rates dropped abruptly to 6.3% before settling at 6.5%, a significant improvement from last April’s average rate of 7.5%. The net result for buyers was a 10%-11% drop in the principal and interest payments regardless of loan amount. Loans between $300K-$400K saw calculated payments drop from $200-$270 per month, while those between $450K-$550K saw drops between $300-$370 per month.

The drop spurred an immediate 16% increase in refinance applications week over week, per the Mortgage Bankers Association, as homeowners who decided to buy and “date” their 7%-8% rate over the past year started thinking about a break up. Purchase applications also increased, but by just 1%. This is not unusual because when mortgage rates make big strides down, the first response by buyers is to wait and see if they decline further. Once rates stabilize under 6.5% for a little while, more demand may materialize.

In the meantime, a record share of sellers are paying for their buyers’ closing fees. So far in August, 55% of sellers agreed to concessions, with half of them paying out $9,800 or more. Even as mortgage rates decline, tools such as the 2/1 buy-down are still the norm. Temporary 2/1 buy downs are contributions by the seller used to supplement 10%-20% of the buyer’s payments for 2 years. They typically cost around 2.3% of the loan amount.

On a $400,000 loan, the rate change of 7.5% to 6.5% from April to August drops the monthly principal and interest payment from $2,797 to $2,528, saving a buyer $269 per month. Combined with a 2/1 buy down courtesy of the seller, the buyer pays the equivalent of 4.5%, instead of 5.5%, for the first year, dropping the PI payment to $2,027, saving an additional $501 per month. That’s a total of $770 in monthly savings to the buyer as a result of the recent rate change this month and more than half of sales with seller-paid incentives.

For Sellers:

As mortgage rates hopefully continue to improve gradually with emerging economic data, sellers will still need to drum up all of their available patience when listing their home. Buyers don’t move nearly as fast as the stock market does when the Federal Reserve speaks or employment reports are released. While all eyeballs are on the demand line to see if it moves higher, buyers still have to fill out applications, submit paperwork, and get moving. Meanwhile, half of sellers who accepted contracts so far this month were on the market for 37 days or longer before they tasted success.

The good news is that the demand index, seasonally adjusted, has stopped declining since the rate drop and there’s little movement towards a buyer’s market at this time. Greater Phoenix remains in a balanced state. The bad news is prices are stagnate, rising only 1.9% from this time last year. While it’s tempting to test and push the market to achieve the highest price possible, the consequence for that strategy could be longer time on the market and multiple price cuts, which are up 67% compared to last year.

Managing expectations is key to a positive selling experience. Balanced market conditions cannot meet the high seller expectations of a seller’s market. Listings typically require more work and a solid strategy, even if they’re in perfect condition. At a time when real estate professionals are experiencing intense scrutiny and change, this is the market where they are needed the most.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2024 Cromford Associates LLC and Tamboer Consulting LLC

July 2024 Phoenix Real Estate Snapshot

Thu, 11 Jul 2024 23:15:38 GMT

3 More Cities in a Buyer’s Market - Incentives Continue to Rise

Rate Drops Equal Major Savings for Buyers

For Buyers:

The second half of 2024 is expected to be better than the first half for buyers in terms of mortgage rates. Last year from July to October rates rose from 7% to 8%, increasing payments by hundred of dollars and knocking many buyers out of the market. This time around, housing analysts are not expecting more dramatic rate increases. Instead, multiple factors are pointing towards improvement.

All eyes are on the Federal Reserve Board to determine when they may drop the Federal Funds Rate this year, but the Fed’s eyes are on annual inflation rates and the labor market. June’s inflation report came down more than expected to 3.0% and the response from mortgage rates was immediate, dropping sharply to 6.82%. That’s a major improvement from the 7.51% recorded on April 30th, and a savings of $187 per month on a $400,000 loan. If rates continue to decline over the summer, then prices may not need to decline to make homes more affordable to buyers.

The market continues to get better for buyers. Half of the homes that went under contract in June were on the market for over a month prior to an accepted contract compared to 21 days last year. Price reductions are up 88% over last year, and 51% of sales involved seller-paid incentives to the buyer, the highest percentage this year so far. In June, the median concession paid to the buyer was $9,900, up $500 from May.

As the market has shifted out of a seller’s market and into balance, it has become a friendlier space for not-so-perfect buyers, especially first-time home-buyers. Buyers looking to assume FHA or VA loans with rates under 5%, or purchase with a low down payment, or down payment assistance, will find more opportunities with sellers today. Those same sellers would have scoffed at them 2-3 years ago in preference for cash buyers boasting guaranteed 2-week closing dates and prices that defy appraisals. As with many opportunities in real estate, these conditions will not last forever if mortgage rates continue to decline.

For Sellers:

The Greater Phoenix market has been in a balanced state for two months and the buyers are getting their groove back at the negotiating table. Over the last 30 days, there were two cities that shifted from a seller’s market into balance: Peoria and Paradise Valley. There were 3 cities that shifted from a balanced market into a buyer’s market: Surprise, Goodyear, and Cave Creek. In the meantime, 14 out of the largest 17 cities in the Valley showed a weakening in their market measures in favor of buyers.

There are 9 cities in buyer’s markets in Greater Phoenix as of July, located primarily in the West Valley and Pinal County. These areas have significant levels of new construction. These growing communities increase competing supply as builders create shiny new inventory for buyers to consider. Single family permits are up 56% to-date compared to last year, reflecting a strong optimism here that isn’t reflected in other parts of the country. As the second lowest count of new resale listings hit the market, new construction has little competition and comprises 27% of all single family home sales in the first half of 2024. New builds are formidable competitors for resale sellers.

Meanwhile, sales prices are still holding steady. The median sales price has only increased 1.9% from last year and the average sales price per square foot is up 2.6% annually for the month of June. Its expected that annual price appreciation in a balanced market will stabilize around the rate of inflation. This is a market Greater Phoenix hasn’t seen since 2014-2015. Sellers need to prepare their home for sale, adjust their expectations, market and price their listing, and negotiate buyer concessions. It’s markets like this that demonstrate the need for representation and guidance from a professional real estate agent.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2024 Cromford Associates LLC and Tamboer Consulting LLC

June 2024 Phoenix Real Estate Snapshot

Sat, 08 Jun 2024 23:05:38 GMT

Price Negotiations and Concessions are Hot and Heavy this June,

Will Rates Decline this Summer?

For Buyers:

It’s feeling a bit like the movie “Groundhog Day” in the Greater Phoenix housing market as we relive the same scenario over and over. The Federal Reserve met this month and once again opted not to reduce the Federal Funds Rate, keeping it steady now for 12 months in a row. On the same day, the Consumer Price Index was released showing the annual inflation rate declined to 3.3%. The combination resulted in conventional mortgage rates dropping from an average of 7.16% to 6.98% in one day. This was expected, however the Federal Reserve board announced they anticipate one rate cut this year, possibly in September. That could mean a mortgage rate drop in late summer, if we dare hope.

While the drop is positive for buyers, rates are still too high to expect a major boost in demand at this stage. Sluggish demand combined with supply that’s 54% higher than last year is creating an environment for buyers that hasn’t been this accommodating in 10 years. Price negotiations are ramping up, but they look different depending on the price range.

On paper, price negotiations in the mid-range between $300,000-$500,000 look similar to last year, landing around 98.7% of asking price, down from 99.0%. This equates to a closing price about $5,200 lower on a $400,000 home compared to $4,000 lower last year. What’s not reported in the media is the rising percentage and cost of seller incentives to the buyer. In this price point, the majority of buyers are sensitive to their monthly cash flow more than the final sales price. Therefore, 55% of sales are closing with seller incentives to supplement buyers’ payments temporarily, compared to 49% last June. The median incentive to the buyer is currently $9,400, up $1,200 from last year’s median of $8,200. Combined, buyers are receiving approximately $14,600 (an extra $2,400) in both price negotiations and closing cost assistance, putting the true ratio of sale price to list price at approximately 96.4% for our $400,000 sale.

Buyers over $1M are less influenced by mortgage rates and concessions and prefer to negotiate the price directly. Price negotiations so far this June are closing at 94.9% of list, down from 96.4% of list last year and 96.1% last month. On a $1M purchase, that equates to an average $51,000 negotiated price reduction, up from $36,000.

For Sellers:

While the industry hopes for lower mortgage rates in the latter half of 2024, active sellers can only address where the market stands presently, which is a challenge. Supply has been rising all year long, but has slowed its roll over the past 3 weeks. Seasonally, supply fluctuations level out in the summer before picking up again around late September and early October. The increase in competition for sellers has resulted in 12 Greater Phoenix cities in less populated outer cities sinking into a balanced or buyer’s market over the course of 2 months, while 13 out of 17 seller’s market cities in the densely populated interior weakened.

Not-so-perfect listings, those that appear to have delayed maintenance issues, need excessive repairs, or simply don’t show well, have the most trouble in these environments. With so many other homes to choose from, these homes may not even get a showing in many area cities regardless of their attractive list prices.

Even perfect listings may suffer from dashed expectations in this market. While these homes that smell like a Spring breeze, well maintained with updated finishes, will sell in any market, seller expectations for time on market and price may not be met. As the market shifts abruptly from Spring to Summer, the median marketing time prior to contract has grown from a historical standard of 3 weeks to 4 weeks and more than half of existing listings will experience at least one price reduction within that time frame. Sellers haven’t seen a supply/demand ratio like this since about 2014-2015, so managing expectations and patience will be key to navigating a successful sale.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2024 Cromford Associates LLC and Tamboer Consulting LLC

May 2024 Phoenix Real Estate Snapshot

Mon, 13 May 2024 22:25:03 GMT

Spring Season was a Snoozer. Will Summer be the New Spring?

Greater Phoenix is in a Balanced Market - What Sellers Need to Do

For Buyers:

“So we keep waiting, waiting on the world to change.” ~ John Mayer

Mortgage rates have remained stubbornly high in 2024, continuing to suppress demand. As a result, the spring buying season was a dud this year for sellers. For active buyers, higher mortgage rates have led to less competition, fewer properties with multiple offers, accommodating sellers, more homes to shop in good condition, and a relaxed buying process.

As supply gradually rises, new listings have lingered on the market 5 days longer than last year and weekly price reductions are up 63%. How long this condition will last is as predictable as mortgage rates, which have been volatile and unpredictable for 2 years. If they do in fact decline this year as expected, then buyer demand will return in kind. After peaking in April at 7.5%, average rates have already declined to 7.1% in response to a stabilizing job market. However, they’re still too high for the housing market to see a measurable shift in buyer demand. Recent history has shown a sustained increase in activity when rates have fallen below 6.5%.

Industry leaders and the Federal Reserve have expressed their expectation that rates will decline this year, with both Fannie Mae and the Mortgage Bankers Association predicting 6.4% by the end of 2024. If they are correct this time, then summer could be the new spring for home buying this year.

For Sellers:

The Greater Phoenix market is officially in a balanced state, which means the days of “dump your junk” are over for now. When there was little competition for sellers in 2021 and 2022, it was common for buyers to purchase homes in “as is” condition. These homes needed roof repairs, new A/C units, carpet replacement, paint, updating, and other renovations to bring them up to par, but they sold anyway with little effort due to the extreme market conditions.

By 2023, the seller’s market had weakened. Low supply meant properties in sub-par condition would still sell but with allowances for carpet, paint, negotiated repairs, and lower prices.

Now in 2024, most cities are either in a much weaker seller’s market, balance, or a full-blown buyer’s market. Supply is up 44% over last year and has reached a level similar to pre-pandemic 2017-2019. Supply is still 27% below normal, but it’s balanced out by demand that is also 20% below normal, suppressed by high mortgage rates.

Under these conditions the market has seen higher marketing times and an abnormal spike in cancelled listings. In a balanced market, it’s important to prepare homes for sale prior to listing and dismiss the idea that a buyer will accept a carpet allowance and credit for repairs over competing homes that are move-in ready. Buyers don’t want to choose their own carpet and paint. They don’t want to do repairs. It pays to take care of these items in advance prior to the first showing to reduce the time on market. As supply rises, the effort is not about increasing the sale price, it’s about ensuring it will sell at all.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report

April 2024 Phoenix Real Estate Snapshot

Tue, 09 Apr 2024 22:18:25 GMT

Why Homeownership is a Hedge Against Inflation,

Sellers Compete on Condition as Builders Ramp Up New Permits

For Buyers:

Inflation is a hot topic today. Talk to any investor about hedging inflation and they may bring up strategies that include gold, commodities, rentals, or even cryptocurrency. For young adults, however, the first step towards hedging inflation is typically moving out of a rental and into homeownership. Let’s discuss why.

The Consumer Price Index (CPI) is arguably the most quoted inflation measure in mainstream media. Most readers assume the main driving forces of the CPI are food and energy. They make up 20% of the weight, so that’s a fair assumption. However, it’s shelter costs that are weighted the heaviest of all the categories at 36%, specifically the cost to rent. Nowhere in the CPI does the cost to purchase a home come into the equation because there is no rent to pay if it’s purchased with cash, or the cost is fixed for 30 yrs if there’s a mortgage.

So while the Consumer Price Index has increased 5.4% since June 2022, once shelter is removed the increase is only 2.1%. One could argue that this is the 2-year inflation rate for those who own their primary residence versus rent, which accounts for roughly 64% of all households in Maricopa County.

For Sellers:

It’s the peak Spring buying season in Greater Phoenix, although it may not feel like it for some sellers. The housing market has begun to drift towards another balanced state over the past 4 weeks, which is the result of an accumulation of supply as demand remains weak. Listings under contract are only down 6% compared to last year, but active listings are up 26%. Days prior to an accepted contract would be 3 weeks at this time of year normally, but current conditions are adding an extra week for sellers.

Word on the street is resale homes needing to be remodeled or updated are sitting a bit longer as builders are ramping up permits for new homes. In fact, single family permit activity is up 125% year over year for January and February and-new home sales are up 16%, surpassing 2021 (the previous 10-year high mark). The competition isn’t just for the sub $500K market either. Luxury new home sales over $3M are up 79% so far this year and up 28% between $1M-$3M.

The struggle for resale listings that need paint, carpet, or significant changes is that fewer traditional buyers have the capacity to finance a remodeling project with current rates, or they may not be able to visualize the space any other way, or they may think the cost and time for basic renovations is greater than it is. As far as investor purchases go, wholesale offers are due to get uglier with increased holding costs, stagnating monthly appreciation, and smaller returns. Flip sales are down 74% from 2 years ago and at a level comparable to 2015.

Whether it’s getting quotes for work, renditions to help with visualization, or advising the seller on the most important updates to make prior to listing, it’s markets like this where professional representation and feedback makes a difference for both sellers and buyers. Despite current challenges, sellers are averaging 97.8% of their last list price at close of escrow so far this month. Seller-paid closing-cost assistance is down 2% to 44% of sales, and the median sales price increased to $444,900, up 6% from last year.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report

March 2024 Phoenix Real Estate Snapshot

Mon, 11 Mar 2024 18:25:36 GMT

The Spring Housing Season is Upon Us,
What’s Hot and What’s Not in Greater Phoenix

For Buyers:

“That is one good thing about this world… there are always sure to be more Springs.” ~Lucy Maude Montgomery

Spring is peak home buying season in Greater Phoenix. March is the 2nd most popular month for new listings historically (the most popular is January), and the beginning of a 4-month long closing season that lasts until June. Supply is up 14% over last year, and while it's still 31% below normal, 16,886 active listings feels like an avalanche compared to 2 years ago when there were only 4,400 to choose from.

Higher mortgage rates continue to keep buyer competition lower than normal, but even mild declines in the rate have resulted in a boost in weekly accepted contracts. Closings over asking price have edged up seasonally to 17% of March sales so far, but the majority of sales are negotiated down by an average of 2.1% below list.

Builders have been ramping up new single family home permits over the past 7 months, up 32% since June 2023. Over the last 3 months, 73% of new home sales closed have involved builder incentives paid to the buyer, with at least 50% paying $11,500 or more. These incentives typically go towards buying down the mortgage rate and saving the buyer $100’s on their monthly payments.

Those who have been keeping these updates over the past year have probably noticed that the median sales price has barely moved for 10 months. Starting at $440,000 from June-July 2023, stagnating at $435,000 from September-December, dropping to $430,000 from January-February 2024, and now back up to $441,000 in March. While the current appreciation rate from last March measures +5.8%, over the next 2 months this will start to move closer to 3%, which is in line with the rate of inflation.

This 10-month stagnation in price, which has endured erratic mortgage rates ranging from 7-8%, has allowed some breathing room for annual incomes to catch up to prices. While low affordability rates are leading negative headlines this month, they are largely based on 2021 median family income from the U.S. Census, which doesn’t reflect the influx of higher paying jobs, inbound migration fueled by the “work from home movement”, and private sector income growth experienced in Greater Phoenix in 2022 and 2023. Updated income reports combined with an expected mild decline in rates this year provide a reasonable expectation that affordability is set to improve. In short, don’t listen to affordability reports that say the majority of homes are not affordable to the masses. You only need to find the one home that’s affordable to you. Don’t give up.

For Sellers:

Spring is statistically the best time to be a seller in Greater Phoenix as buyer activity closes in on its seasonal peak from April through May before slowing down from June through December. This season some areas and price points have been heating up more than others compared to last year, but heat is not all about demand because it’s difficult to increase sales without supply for sale.

For example, areas with the highest percentage increase in contracts over the past 2 months happen to be on the edges of the Valley, such as Black Canyon City, Carefree/Cave Creek, Rio Verde, Sun Lakes, Wittmann, El Mirage, and Avondale. However, with the exception of Avondale, none of these areas feel particularly hot to active sellers because there’s more competing inventory to accommodate the increase in demand.

When supply is taken into account, the hottest areas of Greater Phoenix where supply isn’t quite sufficient for Spring demand gravitate to the south. Namely Avondale, Tolleson, South Phoenix, Ahwatukee, Chandler, Gilbert, and San Tan Valley. While median prices in these areas are still flat, reasonably-priced sellers are selling 1-2 weeks faster than the current 4-week median time frame.

Article courtesy of Tina Tamboer - The Cromford Report

February 2024 Phoenix Real Estate Video

Wed, 28 Feb 2024 18:55:19 GMT

Is it time to make a move from a house or apartment that no longer fits your needs? Don't let uncertainty hold you back, let's talk and create an action plan!

Rentals - Who Pays For What?

Wed, 28 Feb 2024 17:40:36 GMT

Rental properties can be a great way for real estate investors to create a passive income stream. While purchasing a home as your primary residence is typically based on your wants, needs, and lifestyle, purchasing a buy & hold investment property must be based on your numbers and the return on investment you’re seeking.

This article will help you consider the more common expenses when calculating the viability of a particular property. This is a general guideline, and we can help you drill down with specific numbers to find the ideal property that meets your goals.

Expenses Typically Paid by Tenant

Monthly Rent
Rental Tax – Transaction Privilege Tax
Security, Pet, and other deposits as applicable (may be refundable)
Electricity & gas
Cable TV, phone, Internet
Renter's Insurance (should be required by owner/landlord)

Expenses Typically Paid by Owner / Landlord

Mortgage loan principal & interest
Property taxes
Landlord insurance (usually different than homeowner’s insurance)
Umbrella insurance policy
HOA dues, assessments, and violations
Water, sewer, trash, and recycling
Home Warranty to cover appliances and infrastructure
Repairs, maintenance, and service calls
Landscaping service
Pool service
Services not covered by city such as Rural Metro if applicable
Property Manager – see our article at https://www.matthewhoedt.realtor/what-does-a-property-manager-do to evaluate the cost of a property manager versus self-management

What Does A Property Manager Do?

Wed, 28 Feb 2024 16:55:49 GMT

A property manager is an individual or entity hired by the property owner to oversee and manage the daily workings of their real estate investment. Property manager responsibilities include setting and collecting rent, screening potential tenants, filling vacant units, handling maintenance requests, paying certain bills and filing rental taxes, and potentially setting the budget for the property. They must also be aware of and comply with the laws of the Arizona Residential Landlord and Tenant Act.

Property managers often take care of a property that real estate investors either do not live near or do not wish to personally manage. A property manager can be one person or an entire management company, depending on the needs of the owner.

Here are some of the tasks a property manager does on behalf of an owner. If an owner chooses to self-manage their property, these are tasks they will need to do themselves. Property managers typically charge a monthly fee as a percentage of gross rents, plus a one-time fee each time a new tenant must be found.

Setting Rents

Analyze the local rental market and set rents that attract tenants, minimize vacancies, and maximize returns to the owner
Address annual rent increases for existing tenants
Decide on pet policy and additional pet fees

Screening Tenants

Create a professional listing and advertise vacancies on search sites and social media
Show the property
Take rental applications
Run background, credit, and criminal checks
Write and execute lease agreements and renewals
Handle move-in and move-out of tenants, complete checklists, collect & return deposits

Collecting Rent

Collect initial prepaid rents, security deposits, and other fees if applicable
Collect monthly rent plus rental tax (TPT – transaction privilege tax)
File and pay TPT with the state every month
Address late or delinquent rent payments from tenants
Handle evictions of tenants under the rules of the Arizona Residential Landlord and Tenant Act
Send net monthly rental income to owner after deducting expenses

Property Maintenance

Schedule cleaners, painters, and any necessary repairs for each new tenant
Take repair calls from tenants and schedule service
Oversee regular service providers such as landscapers and pool service
Note that owner is responsible for the cost of service and maintenance, so a home warranty is often a good idea

Managing Budgets

Handles collection and distribution of rents
Maintains a budget for repairs and maintenance
Maintains a budget for vacancies
Recommends adjustments to rents based on market conditions

February 2024 Phoenix Real Estate Snapshot

Mon, 19 Feb 2024 21:45:56 GMT

How Presidential Elections Affect Housing,
Starter Homes are a Hot Market in Greater Phoenix

For Buyers:

With many existing home owners comfortably staying put these days, more attention is placed on first-time home buyers, affordability, and supply of homes. The first thing that comes to mind is the choice between renting and buying. According to RealData the median cost of a 3 bedroom apartment at a 50+ unit complex in Q2 2023 was $2,100 per month in Maricopa County. The median size is roughly 1,250 square feet. The past 30 days of sales show the median sale price of a 1,200-1,500 square foot, 3+ bedroom single family starter home to be $370,000 in Greater Phoenix.

Many first time home buyers put down 3.5% on a FHA loan ($13,000 on $370K), and last month nearly 70% in this price range had a seller or builder agree to contribute to closing costs with a rate buy-down. That’s a median contribution of $10,000 from the sellers. On February 1st, the average FHA rate was 6.0% according to Mortgage News Daily. With a 2/1 buy-down from the seller, the first year estimated payment would be $2,159 per month, including taxes, insurance, and PMI. A permanent 1% buy-down would equate to $2,375 per month. This puts the monthly cost to buy a small starter home within a few hundred dollars of the median rental rate.

In Pinal County, the median cost drops to $310,000 and over half of the properties sold in the past 30 days are newly built within the past 5 years or under contract for 2024. On a 2/1 FHA buy-down, the estimated PITI payment is $1,825 per month and a permanent 1% buy-down would be $2,006.

Currently there are 366 active single family listings between 1,200-1,500 square feet, with 3+ bedrooms, under $370,000 in the Arizona Regional MLS (Pinal County has 53% of them). There are 312 listings under contract and 191 closed in the last 31 days. This is a hot market segment.

2024 is expected to be another year of change for the Greater Phoenix housing industry, but this time the shift is expected to be towards stability in home appreciation and improved affordability measures as incomes catch up. After hitting rock bottom for demand in 2023, things are looking up.

For Sellers:

It’s an election year! Every four years there is an expectation that the drama, uncertainty, and manipulation that comes with presidential campaigns will dramatically affect the housing market, specifically prices or mortgage rates. Spoiler Alert: It doesn’t. The main influence on the housing market comes from policies, not the elections themselves. For instance, the stimulus packages and policies that were passed during the 2020 COVID-19 election year and continued into the next administration were the first stones to cause a ripple effect of fortunate and unfortunate events in the housing market over the past 4 years.

So what’s to be expected this year? There is one market that can be affected by an election, and that’s the stock market. After the last 4 elections, the stock market has responded positively afterwards, which affects both luxury buyers and retirees with a high percentage of cash purchases. If a cash buyer expects their investment portfolio to be worth more after an election, they may simply put off their home purchase until the Spring. This can cause contract activity to stagnate for a couple months, but not enough to affect prices, and this mild affect can be offset by other mitigating factors, like seasonality, that would make the impact unnoticeable.

So far in 2024, listings under contract over $1M are higher than 2022, which is the #1 record year for this price range. Active listings over $1M are also at record highs, which is offsetting the increased demand and keeping price appreciation stable. Retirement communities are not experiencing the same however, as this segment is highly sensitive to inflation. When prices for necessities are high and uncertain, many buyers in this segment will choose to keep their cash for safekeeping. Perhaps they’ll feel better after the election.

January 2024 Phoenix Real Estate Video, powered by data from The Cromford Report

Fri, 26 Jan 2024 16:23:47 GMT

Understanding market conditions is crucial for sellers pricing their homes and buyers determining how to make a competitive offer.

January 2024 Phoenix Real Estate Snapshot

Tue, 16 Jan 2024 00:14:14 GMT

It’s Back! Greater Phoenix is in a Seller’s Market Again

When the Mortgage Rate Drops 1%, the Payment Drops By….

For Buyers:

Well the balanced market didn’t last long, 7 weeks to be exact. Last month the Federal Reserve gave the housing industry a much needed gift. Not only did they not raise the Federal Funds Rate, they also announced their intention to drop it three times in 2024. Conventional mortgage rates responded by dropping from 7.1% to 6.62% within 2 days. Mortgage rates have now dropped 1.4% since they peaked at 8% in October 2023, saving a borrower nearly $380 per month on a $400,000 loan, a payment decline of 13%. For perspective, each time the rate drops by 1%, the mortgage payment can drop between 9-10% depending on where it started, in many cases saving at least $200/month*. This rate drop was enough to give December’s mortgage applications a boost, which could be a precursor to January’s accepted contract counts.

In addition to the savings from declining mortgage rates, December ended with 49% of sales involving a seller-paid concession to the buyer at close of escrow, at a median cost to the seller of $10,000. Coolidge had the highest percentage of sales with concessions at 81%, followed by Laveen at 79%. Coolidge has a median sales price of $305,000 with the majority of sales being new construction. Laveen has a median sales price of $436,000, also with a majority of new construction. You’ve probably already picked up on the trend here. Over 76% of all newly constructed home sales that closed through the Arizona Regional MLS noted some form of builder-paid concession. If they were sold for under $500,000, that percentage rises to 82%. The majority of concessions go towards further buying down the buyers’ mortgage rate, temporarily or permanently.

So what can Greater Phoenix expect for 2024? It’s reasonable to expect some relief, not in the form of declining prices but in declining mortgage payments. Combine this with rising family incomes and we can expect affordability measures to improve along with demand. It’s not reasonable to expect another insane market with skyrocketing prices like 2020-2021, or another 12.5% drop in values like 2022. It could be quite boring in terms of price for the first quarter, but uplifting with more traditional home buyers getting back in the game. Things could get more exciting after the Federal Reserve meets again at the end of January and further reveals their plan for the Federal Funds rate in 2024. Stay tuned.

For Sellers:

While Greater Phoenix is out of a balanced market and continually improving, the seller’s market is still very weak so a combination of good condition and price remains key to facilitating an offer within a reasonable time frame, along with an open mind regarding concessions to the buyer. New listings so far in the first week of January are higher than last year, but not high, and while inventory is beginning to rise moderately it’s still 37% below normal for this time of year.

Not all cities are in a seller’s market, the distribution is as follows from strongest-to-weakest:

Seller’s Markets:

Tolleson,
Apache Junction,
Fountain Hills,
Chandler,
Gilbert, Laveen
El Mirage
Anthem
Glendale
Sun Lakes
Phoenix
Scottsdale
Mesa
Avondale

Balanced Markets:

Tempe
Litchfield Park
Sun City West
Peoria
Goodyear
Surprise
Paradise Valley
Arizona City

Buyer’s Markets:

Cave Creek
Gold Canyon
Queen Creek
Sun City
Casa Grande
Buckeye
Maricopa

Most cities are either gradually improving or holding steady in their market measures. Sale price measures in January will reflect December negotiations, but with this turn in the market fueled by lower mortgage rates and seller concessions we can expect sales price measures to be sustained in the first quarter. The second quarter could get exciting if rates continue down.

*Talk to a qualified lender to determine your specific circumstance

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report

December 2023 Phoenix Real Estate Snapshot

Wed, 20 Dec 2023 01:15:32 GMT

Greater Phoenix Balanced Market May Not Last Long,
These Two Factors Could Further Drop Mortgage Rates in 2024

For Buyers:

Greater Phoenix has moved out of a seller’s market and into a balanced market, but it’s unclear how long this opportunity will last for buyers. December is typically the calm before the storm each year for the housing market, and this year is no different. New listings are at their lowest this month as many sellers opt to wait until January to list their home. As a result, supply can become stale and picked over. However, the lull is a window of opportunity for negotiations as the remaining sellers want to be under contract before the wave of new listings come in the new year.

There is uncertainty mixed with hope in the market today as mortgage rates have declined from 8.0% to 7.0% since October. Every day the mortgage rate declines, more buyers are able to purchase. Last year, also from October to December, rates dropped from 7.4% to 6.1%. This was enough to pull the housing market out of a buyer’s market, into balance, and eventually into a seller’s market once again by January. This put upward pressure on price until May, when rates rose once again to 7%. If rates continue their decline and drop below 6.5%, we expect to see noticeable improvements in buyer demand as we enter 2024.

This November, the Consumer Price Index inflation rate took a turn down and the Federal Reserve did not raise the federal funds rate, and both measures were key factors in the current mortgage rate decline. This month, the inflation rate once again declined and the market expects the federal funds rate to remain unchanged, stirring emotions of hope and anticipation that rates will continue declining as mortgage applications rise.

The rapid decline of rates is preventing Greater Phoenix from dropping entirely into a buyer’s market at this stage, which is causing analysts to question how long the opportunity will last. The combination of a sustained balanced market and the weakest month of the year seasonally means that the best thing buyers can do is stay vigilant in their search for a home and take advantage of this quiet time. Once the new year begins, the market could heat up quickly.

For Sellers:

While Greater Phoenix is in a balanced market overall, it’s not evenly distributed. As of December 7th, most of the cities in Pinal County and the edges of the valley are in buyer’s markets. They include Cave Creek, Sun City, Surprise, Buckeye, Maricopa, Casa Grande, Queen Creek, and Gold Canyon. Balanced markets are Paradise Valley, Goodyear, Peoria, Sun City West, Litchfield Park, and Arizona City. All other cities are in seller’s markets, but much weaker than they were a month ago.

The top 5 seller’s markets, in order, are Tolleson, Anthem, Apache Junction, El Mirage, and Sun Lakes. Close behind are Chandler, Laveen, and Fountain Hills. While these cities lean the most towards sellers, the only cities showing significant price increases since June are Anthem, Sun Lakes, and Fountain Hills. Despite being strong seller’s markets, Laveen and Tolleson have 76% and 71% of their sales closing with significant buyer incentives at median costs of $13,500 and $10,000, much higher than the valley-wide measures of 44% and $9,626 for December.

Leading supply and demand measures indicate sales price measures should go flat over the next 3-6 months. Demand is expected to increase once the new year begins, but competing supply may offset it. Pushing the market too far on the price it’s willing to bear will most likely result in more days on market. Focusing on getting your home in the best possible condition, budgeting appropriately for buyer incentives, and managing expectations for price will get your home sold faster in this environment. These are the markets where quality marketing, exposure, and agent representation truly make a difference.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

November 2023 Phoenix Real Estate Video

Fri, 15 Dec 2023 16:32:47 GMT

A recap of 2023's most relevant and interesting statistics for the Greater Phoenix Real Estate Market, and a glimpse of what to expect for 2024.

November 2023 Phoenix Real Estate Snapshot

Sat, 11 Nov 2023 01:07:10 GMT

It’s a Buyer’s Market Once Again In These 8 Cities,
Median Seller Incentive Hits a New High

For Buyers:

Buyers who felt they lost out on the buyer’s market last year will be getting another chance this year. The Greater Phoenix housing market, on the whole, only has a few days left before it enters a balanced market. However, as 18 cities are still in seller’s markets, there are 11 that are either already in balance or in buyer’s markets.

What does a buyer’s market mean for buyers? Most buyers assume it means that sales prices will come down, but by the time sales price measures show a decline, the buyer’s market could be 2 months old or already over like it was last year. The first thing to move isn’t the sales price, but the list price combined with higher seller incentives for buyers.

Over the past 2 months, as mortgage rates peaked at 8%, weekly price reductions increased in number by 33%. Meanwhile, the median seller incentive to buyers increased from $8,000 to a new high of $9,900 so far this November, while the previous high was recorded last January at $9,700. Increases in the dollar amount and percentage of sales with incentives were most noticeable in the first-time home-buyer price range of $300K-$400K and also in cities with a significant number of competing new home communities.

How long this trend will last is unclear as conventional mortgage rates fell sharply this month to 7.3% and FHA/VA fell to 6.7%. The higher mortgage rates climb, the higher the cost to the seller to buy them down. Mortgage rates have been nearly impossible for experts to predict over the past 18 months, however there are strong feelings that the end is near for rate hikes by the Federal Reserve. If mortgage rates decline in response, then the current market decline will be short lived.

In short, it’s a good idea for buyers to stay engaged and vigilant in identifying opportunities in November and December. Once 2024 begins, the peak home-buying season is back in swing with more buyer competition.

For Sellers:

This is not a good time to test a price higher than market value for your home. As the seller’s market weakens on a daily basis, it’s the outskirts of town that are affected first as the interior cities follow quickly. As of November 9th, the following cities are in buyer’s markets: Surprise, Litchfield Park, Goodyear, Buckeye, Maricopa, Casa Grande, Gold Canyon, and Queen Creek. Balanced markets are Cave Creek, Peoria, and Sun City. All others are still seller’s markets, but weakening fast.

Seasonally, the best time to list your home is not in the 4th quarter. However, sellers always want to be selling in a seller’s market. While it’s not a bad idea to wait until the 1st quarter typically, under these circumstances the benefit could be offset by a weaker buyer’s market. That means more competition from new listings, more days on market, and more price reductions. The determining factor that could change the course of the current market trend is mortgage rates, which have been unpredictable and volatile this year.

For those who need to sell, you may get your asking price, but at a higher expense as long as rates are elevated. As a result, sales price measures will not show a decline, but the sellers’ net proceeds will be squeezed. It may not be the market we love, but it’s the market we’re with.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

October 2023 Phoenix Real Estate Video

Tue, 31 Oct 2023 22:27:32 GMT

A quick update on recent changes in the Phoenix real estate market

October 2023 Phoenix Real Estate Snapshot

Tue, 10 Oct 2023 00:02:08 GMT

Back to the 80’s? Loan Assumptions, Rate Buy Downs, and Incentives
More Choice for Buyers: Supply Up 22% in 10 Weeks

For Buyers:

The 4th quarter is here, and this is the best time of year to be a buyer in Greater Phoenix! Inventory continues to rise, up 22% in 10 weeks to be exact, and price reductions typically peak in October and November. Most sellers listing in October are motivated to close on their homes before the end of the year, but few are more motivated than builders. New homes make up 22% of active MLS listings and 29% of Maricopa and Pinal County August sales. Builder incentives are including not only closing cost assistance, but select upgrades and significant permanent and temporary rate buy downs. For perspective, let’s use a $350,000 loan. If a buyer uses the seller’s or builder’s closing cost assistance to buy down the mortgage rate by 3% it would save more than $650/month on their payment. Buying the rate down by 2% saves $450/month.

Builders are not the only ones with incentives, however. Last month, 45% of all closings through the Arizona Regional MLS involved sellers paying buyers’ closing costs with a median of $8,500, about the cost of a 2/1 temporary buy down on a $365,000 loan. Buyers would be smart to consider areas with heavy competition between builders. The cities of Coolidge, Maricopa, Tolleson, and Laveen collectively saw 70% of sellers agree to closing cost assistance with 50% of them paying out $10,000 or more.

First-time home buyers may feel like the difficulties they’re facing in today’s housing market are unique and unprecedented. However, high rates like today bring out tools and opportunities for buyers that only emerge when the market is stressed, and they disappear when the market recovers. Baby Boomers, considered to be the wealthiest generation today, didn’t have it so great when they were in their 20’s and 30’s. In the midst of building their careers, growing their families, and purchasing homes, the economy experienced 4 recessions, 4 rounds of high unemployment, and mortgage rates that soared over 10 years from a low of 7% to 18%; it took another 10 years to get back down to 7%. During that time, home sales were low but home values did not decline, similar to today.

Here are some stories about how a few of our Baby Boomers and Gen-Xers purchased their first home:

· Tom, 68yo - bought his first home in the 70’s together with 3 friends at 9% as tenants in common.
· Chris, 58yo - first home 1989, paid a distressed seller $4,000 and took over their FHA mortgage payment
· Thomas, over 59yo - first home was a distressed HUD foreclosure he bought for $55K and fixed it up himself
· Michael, 66yo - sold his boat and car to purchase his first home at 8.5%
· Raejean, 57yo - purchased her first home in 1985 at 16.5%
· Kathleen - purchased in 1979 with gifted down payment and 3-2-1 rate buy down
· Kathryn - first home in 1981, interest rates were 18%, but she assumed the seller’s VA loan at 6%
· Nick - bought first home in 1988 with his brother, assumed the seller’s VA loan with $4,500 down and got a roommate to help make the payment, didn’t care about the rate
· Jon - first home in 1981, assumed a VA loan at 10%, seller financed the rest at 10%. Existing rates were 18%

Each one said their decision to buy their first home was a good one in hindsight, even though money was tight and rates were high. Especially today, it’s highly recommended to consult with a Realtor® and a lender who is fully aware of available loan programs, FHA and VA loan assumptions, seller incentives, down payment assistance, and other tools designed to help you on your way to home ownership and building wealth.

For Sellers:

The seller market is weakening in the wake of rising mortgage rates as we head into the 4th quarter. Greater Phoenix is still in a seller’s market, but at the current rate of decline it could see a balanced market by year end. This means that sellers should allow for longer marketing times, improving the condition of their homes prior to listing if necessary, and staying open to funding rate buy downs. Prices are holding tight and are not expected to decline significantly for now.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

September 2023 Phoenix Real Estate Video

Sat, 30 Sep 2023 16:58:25 GMT

Affordability is an issue for many people today, but if you have the means this is still a good time to buy.

September 2023 Phoenix Real Estate Snapshot

Sat, 09 Sep 2023 23:50:18 GMT

Why Buyers Should Stay in the Game in 2023
Sellers: Prepare for Longer Days on Market in Q4

For Buyers:

When first-time home buyers talk to their parents or grandparents about today’s mortgage rates, they may get a response similar to, “I purchased my first home in the 80’s at [insert range of 10%-18% interest here].” In fact, some carry their high mortgage rate like a badge of honor because it turned out to be a great decision, despite the uncertainties of their time. In their 20s and early 30s, Baby Boomers endured 4 recessions, 4 rounds of high unemployment, and erratic mortgage rates that started from a low of 7% and rose to a peak of 18%. However, those who got in the game where they could, with a long term mindset, were rewarded and are looked upon as “lucky” to have gotten in when they did.

Flash forward to 2023. While admittedly there is a large swath of buyers priced out of purchasing a home due to mortgage rates between 6.8%-7.5%, there are a number of them who have the means to enter the market but are waiting for mortgage rates to decline. Their mindset is not unlike those buyers who waited for prices to come down when rates were below 3% two years ago, and now regret it. Waiting for the perfect home, at the perfect time, at the perfect price and the perfect mortgage rate is an exhausting and futile endeavor. The reason being that when all the perfect boxes are checked off, there is a line of competing buyers that make the experience… well ...less perfect.

Jump to September. As Greater Phoenix moves into the last few months of 2023, seasonally this is the best time to be a buyer. Active listings are rising as they typically do in the Arizona Regional MLS, providing more selection. The median sales price is $40,000 below the highest peak of June 2022, and prices are stable for now. These months are typically slower than the Spring, but competing demand for homes is further suppressed by mortgage rates. Thus 41% of sales involve seller-paid closing costs that often include a rate buy-down. Closing cost assistance is one of the first things to go when rates decline and/or buyer competition increases in relation to supply. Since January, the percentage of sales with assistance has dropped from 51% to 41% and the median paid by sellers has dropped from $9,700 to $7,500.

Things aren’t perfect, but 3 out of 4 isn’t bad.

For Sellers:

Currently, the median number of days prior to a seller obtaining an accepted offer is 21 days. However, going into the last few months of the year, sellers should allow for an extra week or two as the calendar approaches year-end holidays. Historically, properties that are listed in October are on the market for a median of 2-4 days longer than those listed in September. However, properties listed in late October or early November are typically 10-14 days longer.

Real estate professionals often advise their clients that the first week of active status is the most important in terms of gauging whether a listing is priced appropriately to attract a full price offer. Analyzing the last 30 days of sales, this advice proves to be true. Properties that accepted contracts within 1 week of list showed 68% of sellers received their original list price or more at closing. At 2 weeks on the market, that measure declines to 53% but is still a majority. By week 3, however, 59% of sellers accepted offers less than their original price, and after 4 weeks on the market 81% accepted less.

As sellers approach longer marketing times in October, it’s common to see both active listings and price reductions increase. This year is following that expectation and weekly price reductions are on the rise, up 34% since the beginning of July, but still down a whopping 63% from this time last year. Weekly price reductions are expected to continue rising gradually from now until they peak in early November, so sellers planning to list within the next few weeks may want to budget for at least one in their strategy.

Make no mistake though, the market still favors sellers. So far this year, sales prices have appreciated 6-7% over the past 8 months, with 12 fewer days on market compared to last year, and tighter negotiations within just 2% of the last list price on average. Sale prices are expected to continue rising mildly for the next 3 months.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

August 2023 Phoenix Real Estate Video

Sat, 02 Sep 2023 00:13:38 GMT

We are in a seller's market, but it's a much milder one than the past few years. This month's real estate update powered by data from Cromford Report.

August 2023 Phoenix Real Estate Snapshot

Fri, 18 Aug 2023 17:51:00 GMT

Active Supply Stabilizing, Still Down 39% From Last Year,
Annual Appreciation Expected to Be Positive by September

For Buyers:

Not a lot of changes are happening in the housing market right now. It’s as if both buyers and sellers are in a holding pattern awaiting a sign before making a move. Conventional mortgage rates have held steady in the high 6% and low 7% range for nearly 3 months now with little signs of a decline yet. Rates have kept contract activity restricted since the 4th of July and overall demand is 22% below normal for this time of year.

The continuous drop in supply we’ve been experiencing since October has slowed and flattened out over the past 6 weeks as well, but is still 52% below normal for the past month and 37% below last year’s supply count. The ratio between supply and demand is keeping Greater Phoenix in a seller’s market, but it’s mild compared to the last 3 years. This indicates an upward pressure on price, but more subdued. Between September and December, the annual appreciation rate is expected to turn positive and may return to a pre-pandemic level similar to 2018 and 2019, which had annual appreciation rates between 5-8% on average.

This is good news for buyers for two reasons. First, the latter half of the year is typically the best time to be a buyer in Greater Phoenix as the highest months for closings are March through June. After June, buyer competition declines until the end of the year and gives buyers a little breathing room to tour homes and make decisions. Second, buyers understandably like to see their home’s value increase after they purchase, even if it's just a little bit.

There is also an expectation that the uncertainty surrounding mortgage rates may be lifted towards the end of the year or after the Federal Reserve concludes their meeting on September 20th. While mortgage rate predictions continue to be all over the board, and mostly wrong, if they do indeed decline over the next 3 months then expect both buyers and sellers to break their holding patterns and for housing to move once again.

For Sellers:

While the Greater Phoenix market is experiencing its typical “summer slowdown”, marketing times prior to contract have held steady for the past 2 months at a reasonable 21 days. Also holding steady, 41% of closings involved seller-assisted closing costs, with the median cost to the seller at $8,000. Offsetting this statistic is a growing number of sales closing over asking price. June saw 21%, July 22%, and August is pushing 23% so far. In a normal seller’s market, this statistic doesn’t exceed 18% and typically peaks in June or July. The median amount over asking price for July closings was $6,000, and the majority of sales last month with both seller concessions and a prices over list occurred on properties listed below $600,000.

New home construction is roughly a third of all available inventory in the Arizona Regional MLS. While permit activity dropped significantly last year, this year it has bounced back, but not to the same level as 2022. Instead, new single family permits year-to-date are at a level Greater Phoenix hasn't seen since 2017. For existing homeowners, this means fewer new homes will be added to competing supply. Multi-family permits have outpaced single family and continue to hit new highs. The majority of these units are intended to be rentals, however, and will be adding little competition for existing owners of townhouses and condominiums.

The latest employment report for Arizona showed our state’s labor force continued to grow 2.5% year-over-year, faster than the U.S. growth rate of 1.8%. Non-farm employment grew by nearly 72,000 jobs and private sector earnings are up 2.4%. The unemployment rate is just 3.5%, well below the pre-pandemic measure of 4.9% and the lowest unemployment rate for Arizona since 2007. A diverse employment base and positive economic measures for Greater Phoenix continue to support price stability and a mild appreciation of home values through this period of restricted demand.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

July 2023 Phoenix Real Estate Video

Mon, 31 Jul 2023 16:23:09 GMT

With higher interest rates, the mortgage interest tax deduction has more relevance now than it has in a long time.

July 2023 Phoenix Real Estate Snapshot

Fri, 14 Jul 2023 21:27:56 GMT

Mortgage Interest Deduction Saves Money for New Homeowners
Home Values Appreciated 5-7% Since December

For Buyers:

While many professionals tout appreciation as the main benefit of homeownership, higher mortgage rates bring another tool into the equation that hasn’t been promoted in well over a decade. That is the mortgage interest tax deduction. This deduction hasn’t been a selling point for many years because prices and mortgage rates had previously been so low that mortgage interest payments rarely surpassed the annual standard deduction for most households.

The 2023 standard tax deductions are $13,850 for a single filer, $20,800 for head of household, and $27,700 for married filing jointly. When a household goes from renting a home for $2,200 per month to purchasing a home with a principal and interest payment of $2,275*, an average of $1,940 per month of the first year’s amortized payments will go towards interest. This amounts to a deduction over $23,000 off their taxable income. The other $4,000 in principal goes right back into the equity of their home for their benefit when they choose to sell.

For those households with few deductible expenses and high incomes, purchasing a home could make a notable impact on one’s tax bill compared to renting. Here is a very basic example for comparison purposes. A single high-income renter making $100,000 annually using the standard deduction of $13,850 would owe approximately $18,953 in taxes at the end of the year. If they were a single homeowner using the $23,000 deduction in mortgage interest through itemizing, they would owe $16,940, a savings of $2,013 in annual taxes.** Therefore, a monthly P&I payment of $2,275 benefits a household in equity and tax savings more than a $2,200 rent payment in this scenario.

For Sellers:

As predicted in last month’s issue, active supply for homes is now officially –27% below what it was this time last year and -38% below the peak of October 2022. Market indicators tell us that prices will continue to rise over the next 3-5 months, but not at an alarming rate. Average price per square foot measures have been elevated this year due to the 3rd best season for luxury sales over $1M, and especially over $3M. However, the entire luxury segment goes sleepy once temperatures go above 100 degrees. As a result, overall price measures often stagnate, or even decline, from July to September for no other reason than there are fewer high-end closings. Once luxury sales over $1M are removed from the trend line, price appreciation from December through June goes from +7.7% to +4.9%.

The first half of 2023 has proven much better than the last half of 2022 for home values by far. A normal rate of appreciation established between 2015 and 2019, prior to the COVID-19 pandemic, is between 6-8% annually. This puts the current rate of appreciation since December higher than normal when extrapolated through the end of the year.

There has been significant reporting of the “locked-in” effect across the nation; homeowners with 30-year fixed mortgages at or below 3% who have little incentive to move up or down due to higher mortgage rates. This is a blessing, not a curse. Not all countries have long-term fixed-rate mortgages like the United States. For example, the bulk of Australia’s mortgage holders have variable rates that adjust every 1-5 years. As rates have increased substantially, sellers unable to afford their adjusted payments become distressed and forced to sell. This is the environment that causes home values to decline, but that is not happening in the United States since existing homeowners are not forced into higher payments when rates increase.

Over 57% of resale sellers in Greater Phoenix have owned their homes for more than 3 years, property values have appreciated 40% or more over that time and are maintaining. The level of buyer demand continues to be fueled by our sellers’ ability and willingness to contribute to rate buy-downs and closing costs. 42% of June closings involved some form of closing cost assistance from sellers with a median cost of $8,000, with the prime price point being sales between $200K - $500K. That same price range happens to have 20%-30% of sales over asking price as well, with a median between $5,000-$5,500 above list; reflecting many buyers’ willingness to meet sellers halfway.

*P&I payment calculated for a $400,000 purchase, 10% down, 6.5% interest rate. Does not include PMI, taxes, or homeowner’s insurance.

**Always talk to a qualified, professional tax accountant for personalized, detailed tax advice. Check out https://www.irs.gov/pub/irs-pdf/p936.pdf for more information on the mortgage interest deduction.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

June 2023 Phoenix Real Estate Video

Fri, 30 Jun 2023 22:21:12 GMT

There is opportunity for buyers and sellers in today's market! Watch this quick video to find out where.

June 2023 Phoenix Real Estate Snapshot

Mon, 12 Jun 2023 20:44:03 GMT

Median Hits $440K, Annual Appreciation Expected to be Positive Again Soon,
Traditional Buyers Rebound After Investors Retreat

For Buyers:

Last month we reported that the year-over-year supply change will be negative within 6 weeks, and at that time supply was 80% higher than the previous year. Now 5 weeks later, supply is only 3.7% higher than last year’s count and is expected to be below 2022 in another week. New listings continue to be insufficient in replacing properties that have gone under contract, resulting in overall supply dropping an average of 151 listings per week within the last month.

That’s a slower rate of decline compared to previous months, but it’s not because more sellers decided to get off the fence and list their homes. The slower decline is in response to demand weakening when mortgage rates increased from 6.5% to 7.1% within 2 weeks last month, the shock causing many buyers to take a breath. Once again, just when housing economists got optimistic in April about mortgage rates stabilizing or declining, less than favorable inflation reports caused them to spike once again. It’s tough to do mortgage rate predictions these days.

Since then, conventional mortgage rates have dropped only slightly, hovering around 6.9%. The downturn in demand has created a noticeable advantage for FHA buyers, who had been mostly rejected by sellers over the past 2 years in favor of cash investors. As investors have retreated back to normal levels this year, putting traditional buyers back in the driver’s seat, FHA increased the amount of money they’re willing to loan to $530K. They also lowered their mortgage insurance premiums by $100s on monthly payments annually. These changes have resulted in the market share of closings in Greater Phoenix funded by FHA to go from just 9% in April 2022 to 22% in April 2023 on sales under $600K.

Sellers are still contributing to closing costs and buying down mortgage rates on behalf of the buyers to make the monthly payments attractive and competitive compared to local rental rates. In May, many lenders upped the game and announced new down payment assistance programs and loans with just 1% down. Each program has separate requirements that need to be explained by a qualified loan officer, but they are often focused on getting first-time home buyers into entry level homes.

You may be surprised when we tell you that does not disqualify many buyers who have previously owned a home. Search the definition of first-time home buyer online and you’ll find that any individual who has not owned their primary residence within the last 3 years is re-classified as a first-time home buyer. Couples also qualify as first time home buyers if one spouse has not owned a home in the last 3 years.

For Sellers:

Despite the increase in mortgage rates and subsequent drop in demand, prices continue to rise in Greater Phoenix and are expected to continue doing so for the next 3-5 months. While still down year-over-year, the median sales price has recovered 5% since our December newsletter, up $22K.

Before the end of the 3rd quarter this year, it’s very likely annual appreciation rates will turn positive once again.
Nearly every city is officially a seller’s market this month. Maricopa and Buckeye are no longer buyer’s markets. They are now in balance and moving towards seller’s markets once again. The only city remaining in a buyer’s market is Casa Grande at this time. When markets soften like they did last year, the cities on the outskirts fall into buyer’s markets first and are the last to come out. Cities on the interior are the last to go into buyer’s markets, and the first to come out. As the interior cities such as Phoenix, Glendale, and Chandler first moved into a seller’s markets in January, the shift of these outlying areas is the final step to coming full circle in the market correction.

Improving market conditions for sellers only slightly relieves the need to contribute to closing costs and rate buydowns for buyers. Over 50% of sales between $200K-$500K involved sellers contributing to buyers’ costs with the median contribution at $7,500 so far this month. That’s down from January’s sales where 62% involved concessions in this price range, at a median cost of $9,300. So while things are improving, make no mistake that Greater Phoenix would not be in an appreciating market if sellers were not willing and able to offset the costs associated with closing on a home.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

May 2023 Phoenix Real Estate Video

Wed, 31 May 2023 20:15:15 GMT

You have a TRUSTED ADVISOR with Matthew Hoedt - Realtor!

May 2023 Phoenix Real Estate Snapshot

Sun, 07 May 2023 00:56:11 GMT

Greater Phoenix Losing 246 Listings per Week in 2023,
Prices Recovering, Median Up to $425K in May

For Buyers:

The sharp decline in supply for Greater Phoenix is a good reason for buyers to have a sense of urgency about purchasing a home. Since the beginning of 2023, supply counts have been declining at an average rate of 246 listings per week and since the peak in October, total supply is down 42%. At this rate, the effects of the massive supply surge last year will be erased and the year-over-year change will be negative within 6 weeks. In fact, the Valley could see extremely low supply similar to 2021 and 2022 within 7-8 months if a significant source of supply doesn’t emerge.

While permits for new single-family homes dropped by 74% over the last half of last year, they have doubled since December. While that sounds encouraging, the build time for a new home is estimated at about one year. So, as the builders move through their permits and inventory from the first part of last year, there are fewer permits from the latter half to significantly boost new supply for sale going forward this year.

That being said, while prices are rising and recovering from the 2022 decline, they’re not spiking right now. This is good news. The appreciation rate since December is considerably more modest than what the market saw from 2020-2022. For perspective, the first part of 2022 saw the median price in Greater Phoenix rise from $425K in December to $470K by May, an average of 2% per month. This year, after declining to $418K in December, the median sales price has risen to just $425K as of this month, which is significantly more sustainable.

Mortgage rate predictions, meanwhile, are trending down. This month, organizations such as the Mortgage Banker’s Association, Freddie Mac, Compass Bank and the National Association of Realtors all declared expectations that rates may drop into the mid– to low– 5% range by the end of the year. The last time rates were that low was August 2022, but with the dominance of seller-paid buy-downs today that drop the going rate by 1-3%, and FHA rates that typically run well below conventional rates, a decline in conventional rate to the 5% range could spur a surge in both supply and demand.

For Sellers:

Unaffected by mortgage rates, the market over $1M has seen its 2nd best year in Greater Phoenix so far. May is typically the peak of the market for buyer activity in the top tier price ranges, and after local temperatures top 100 degrees, we tend to see a noticeable slowdown as they flee to cooler climates. Expect to see a spike in luxury homes cancelling or expiring their listings temporarily in June and then re-activate them in the fall.

If your home is under $600K, you will want to keep an open mind about FHA buyers. Effective January 2023, the loan limit for FHA was raised to $530K and effective March 2023, FHA announced they were reducing the mortgage insurance premiums on their loans from 0.85% of the loan amount to 0.55%. On a $400,000-$500,000 loan, the monthly savings is about $100 off a buyer’s payment. Combine that with a 30-year fixed rate that runs from a quarter to a half point below the conventional rate, and that can knock off another $100 from the payment. With a possible $200 savings every month, more well-qualified buyers are choosing FHA over conventional financing. Closings in March under $600K saw 21% of closings involving an FHA loan compared to only 9.5% last May, and that was just the first month the new policy was in effect. Conversely, cash sales dropped from 31% of sales last May under $600K to just 18% in March.

Meanwhile, demand picked up over the last month as supply continued to decline. This means continued upward pressure on price, but at a more moderate pace. The last big cities in buyer’s markets - Maricopa and Buckeye - are quickly moving towards balance. Average sales price per square foot has stabilized in these two areas and most cities have seen prices turn back up this year. While year-over-year price comparisons have been negative since December, by July or August they could turn back to positive if the current rate of appreciation is sustained.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

April 2023 Phoenix Real Estate Video

Mon, 01 May 2023 01:29:15 GMT

Is now a good time to make a move? We can't predict the future, but we can assess the current market and make data-driven decisions from there. Check out this month's video for more!

April 2023 Phoenix Real Estate Snapshot

Fri, 14 Apr 2023 01:22:21 GMT

Supply Down 36% Since October, Dropping 54 Listings per Day in April,
Two More Cities in Seller’s Markets This Month, Prices Up 4 Months in a Row

For Buyers:

It’s been an eventful 4 weeks, again. Conventional rates dropped from their high of 7.1% on March 2nd to 6.1% by April 5th. Buyers entering the market in Phoenix today may be getting an unexpected shock if they’re looking for desperate sellers and rock bottom prices. Two more cities entered seller’s markets this month, Surprise and Goodyear. Now 14 out of the 17 biggest cities are favoring sellers and some zip codes in Chandler and the West Valley are on the market just 2-3 weeks prior to contract, down from 9-11 weeks.

January and February were months where skepticism dominated the marketplace. Skepticism happens
when leading indicators (reflecting future performance) are not in alignment with lagging indicators (reflecting past performance). Today, we are finally seeing the lagging indicators reflect what the leading indicators were telling us back in January. Sales price measures have now risen for 4 months straight and, while still down year-over-year for now, average sales price per square foot has recovered 5.7% since December. This is despite extreme mortgage rate volatility, two large bank failures, and another fed funds rate hike. You may ask yourself, “How can it be?”

Price trends do not depend on demand alone. Supply plays a major role, and it’s decreasing at an alarming rate. There are not enough new listings coming into the MLS to replace those that are going under contract. In fact, the MLS is seeing an average deficit of 54 listings per day since April 1st. While demand is considered 18% below normal for this time of year, supply is 40% below normal. Where is the relief going to come from? New single-family home permits dropped by 74% between March and December last year, so builders are not adding further to supply at the moment. iBuyer inventory from OpenDoor and OfferPad has dwindled from 12% of active supply last August to just 3-4% today, and it’s continuing to decline. Foreclosures are still at record low levels with little evidence to support a significant rise. In the short-term rental market, lower occupancy rates and looming regulations may spur some owners to sell their properties after the peak season is over, but it’s unclear if that supply will be enough to relieve the overall shortage of homes for sale.

At this time, leading indicators point to more upward pressure on price for Greater Phoenix. Time is of the essence for those buyers on the fence. As supply continues to decline, the percentage of sales with seller’s contributing to closing costs and mortgage rate buy-downs has declined as well, down from 52% in January to just 39% last week.

For Sellers:

Seller positions are improving, but the current environment is not remotely comparable to 2021 or 2022. Only 3 major cities remain in Buyer’s Markets. They are Queen Creek, Maricopa, and Buckeye. Queen Creek is a mild buyer’s market moving towards balance, and Maricopa is fast-improving as well. Price measures have stopped dropping in Maricopa and Buckeye, and San Tan Valley (Pinal side of Queen Creek). Greater Phoenix would not be in a seller’s market right now without hefty seller-paid incentives to buyers. Price points between $250K-$800K are showing 40-57% of sales involving seller-paid closing costs, and West Valley zip codes close to I-17 and Avondale are seeing 70-80% with similar concessions. The median cost to sellers is an additional $9,000, which is typically allocated to temporarily buying down a buyer’s mortgage rate by 2-3%. While sellers may lament buying down a rate on their sale, they may be awarded that same benefit when they turn into buyers, which certainly dulls the sting.

Demand is still weak due to wild fluctuations in mortgage rates. One can argue that the volatility in rates is worse than the rates themselves. A little stability will go a long way in improving demand, however for now it’s the lack of supply pushing prices up.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

March 2023 Phoenix Real Estate Video

Wed, 05 Apr 2023 18:48:18 GMT

Where is the opportunity for buyers and sellers in our current market?

March 2023 Phoenix Real Estate Snapshot

Tue, 14 Mar 2023 22:25:44 GMT

After 200% Increase, Supply Still Nearly 40% Below Normal,

Sale Prices Up 3.5% Since December

For Buyers:

Rates defied industry predictions once again and rose over a point from 5.99% to 7.1% between February 2nd and March 2nd. For the past 4 weeks, rates have hovered in the upper 6% range, figuratively “pinching the hose” on demand during the popular Spring season for buyers. At 9,001, contracts are at their 4th lowest count since 2005, the lowest counts were in 2006-2008 and normal range is 11,000-13,000.

Buyers are not the only ones holding back due to higher mortgage rates, sellers are too. New listings added to the Arizona Regional MLS are the lowest ever recorded going back at least 23 years. This may be shocking to some as there has been a 200% increase in supply year-over-year, but last year at this time supply was merely 4,820 active listings. The reality is that ARMLS active supply spiked over 300% last year between March and October, peaking around 20,000 listings. But since then it has declined 27% to 14,772, which is the 4th lowest supply count since 2005 for this time of year. Typically, active listings should be between 20,000-24,000 to be considered normal.

In a nutshell, while higher rates have stunted demand for now, they are not expected to stay high forever. If and when they come down, expect demand to increase again. Meanwhile, FHA announced a reduction in the mandatory mortgage insurance premium (MIP), effective this month. FHA mortgage rates typically run about a half-point lower than conventional rates and this further reduction in the MIP could equate to an additional $100 off the monthly payment for borrowers. Combine that with the higher FHA loan limit of $530,150 for 2023, and many first-time home buyers may still find ownership within their reach.

The best advice for buyers is to become educated on all the incentives available, from seller-paid rate buy-downs to down payment assistance, while the sellers remain open-minded.

For Sellers:

Low-level demand combined with even lower-level supply equals a seller’s market for Greater Phoenix. Not a crazy one like the last 2 years, but since coming out of a buyer’s market last December sale price measures have stopped dropping and have risen a modest 3.5% so far. Sellers continued to pay for buyers’ closing costs on 48% of MLS closings in March, with half paying $9,000 or more.

Fewer new listings hitting the market has meant less pressure on sellers to reduce their list price. As a result, weekly price reductions are actually falling instead of rising as they typically would at this time of year. Only 13-14% of inventory issued a price reduction last week compared to 25% of inventory last October. The average negotiation is 97.4% of the last list price this month, an improvement from 96.5% in January and in line with the pre-pandemic market of 2019.

Current median days on market prior to an accepted contract is 32 days. Most seasonally-adjusted housing measures are reflective of a weak seller’s market similar to 2015 where properties appreciated an average of 4.6% annually. The majority of cities in Greater Phoenix are now in seller’s markets. Only 5 cities remain in buyer’s markets at this stage. They are Queen Creek, Maricopa, Buckeye, Casa Grande, and Sun City West. The outskirts of town tend to be the first to enter buyer’s markets and the last to come out. While these cities are lagging the rest of the valley, their measures have all improved 8-14% over the past month.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

February 2023 Phoenix Real Estate Video

Tue, 07 Mar 2023 19:14:49 GMT

Is this a good time to make a move? Three reasons why now is a good time to buy.

February 2023 Phoenix Real Estate Snapshot

Sun, 19 Feb 2023 22:01:41 GMT

Accepted Contracts Up 86% in 5 Weeks

Phoenix Back to a Seller’s Market! But It’s Not 2020-2022 Again

For Buyers:

The Spring season is upon Greater Phoenix. February hosts the Waste Management Open and Super Bowl LVII this year, putting the metro area in the national spotlight more than usual during our peak season for weather, tourism, and buyer activity. This, combined with mortgage rates briefly stabilizing between 6.0-6.2% in January, contributed to an 86% increase in accepted contracts since the beginning of the year. Six major cities moved out of balanced markets into seller’s markets over the last 4 weeks: Phoenix, Avondale, Glendale, Tempe, Mesa, and Gilbert. Two cities came out of buyer’s markets into balance: Peoria and Surprise. Only Goodyear, Queen Creek, Maricopa, and Buckeye remain in buyer’s markets at this stage. Now 11 out of the 17 major cities are in seller’s markets, but much weaker ones compared to the last 2.5 years.

The shift is in its early stage and fragile, however, and could fall back to balance if mortgage rates become too volatile. Rates remain unpredictable, but that doesn’t stop the industry from trying to predict them. Multiple outlets, such as the National Association of Realtors, Mortgage Bankers Association, Freddie Mac, Fannie Mae, and CoreLogic, released expectations in January that mortgage rates will either stabilize or trend down in the first quarter of 2023. Very few are predicting rates to increase this year overall, but we may see them bounce around as the bond market flinches with every report on inflation and employment. This may cause buyer demand to ebb and flow over the next few months, too.

Speaking of employment, the latest report for Arizona showed an increase of 93,700 jobs for the state over the course of 2022. In Maricopa County, the unemployment rate dropped from 3.1% in January to 2.7% by the end of December, continuing to outperform national measures. Even as the labor force grew by nearly 58,000 people, even as layoffs swept the real estate and tech industries, people claiming unemployment declined by 9,500 over the course of 2022. Private sector earnings also grew by 4.1% year-over-year, a positive indicator for housing affordability to improve in Greater Phoenix.

For Sellers:

Don’t be fooled by this seller’s market, it is nothing like the seller’s market of early 2022. Sellers may notice there is less pressure for a price reduction as there are few new listings entering the market. There were only 9,664 new listings added to the Arizona Regional MLS since the beginning of 2023, the lowest number of new listings measured in at least 23 years. The median is 14,000 listings, and the highest measured was over 21,000 in 2006 over the same 5-week time frame. Less competition is good for price stability.

Sellers may notice fewer days on market prior to contract. Half of owners who accepted contracts last week were on the market for 40 days or less (listed after January 4th) compared to the peak of 56 days in December. In a weak seller’s market like this, as we shift into the Spring season, days on market prior to contract may settle in at 25-30 days; a far cry from the 5-7 days in early 2022.

Sellers will notice little change in negotiations or concessions at this stage. Last month, 51% of sales involved seller concessions to the buyer with a median cost of $9,700. So far in February, 47% have involved concessions at a cost of $9,800. The average negotiation is 2.8% below the last list price, down from 3.5% last month.

Sales measures rolling in now are reflecting contracts written in late December and early January, which was a mixed bag of cities in balance and cities in buyer’s markets at the time. The effects of the current seller’s market will not be seen in sales price measures until March, at which point we expect to see the rate of decline in sales price measures either slow down or stabilize. Mortgage rates could change the game quickly, however. It’s not a time for buyers or sellers to take market conditions for granted.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

January 2023 Phoenix Real Estate Video

Thu, 02 Feb 2023 19:32:12 GMT

Have we hit the bottom of the market? Here's what we're seeing for the start of 2023.

Goldman Sachs "Phoenix Market Crash" Prediction Has Little Basis in Reality

Wed, 25 Jan 2023 22:26:34 GMT

Comments by Michael Orr, Founder of The Cromford Report

"There is a story run by Fox Business News and other news outlets today that quotes Goldman Sachs making all kinds of weird and unlikely forecasts. Not quite sure how to deal with it because its description of the current Phoenix market bears little comparison with the real world.

Some quotes are:

Goldman Sachs expects home values to worsen through 2023 amid continued skyrocketing interest rates and declining housing prices
Four US cities will suffer the most catastrophic dips, drawing comparisons to the 2008 housing crash
Phoenix Arizona will likely see noticeable increase before drastic decreases of more than 25%

My comments are:

We saw skyrocketing interest rates in 2Q and 4Q of last year. The idea that interest rates will skyrocket in 2023 seems more than a little far-fetched when the inflation rate is falling. It could happen, but to have this as your base case seems very irresponsible.
Is Goldman Sachs really saying Phoenix home prices will go up and then drastically down? Come on now, there is no data that supports that outlook. Just a wild-ass guess?
In the Great Recession, the median price in Phoenix declined from a peak of $265,000 in June 2006 to a low of $109,000 in May 2011. That is a fall of almost 60%.
Please let us not compare 60% with 25%. They are not similar.
Since the peak in May 2022 of $475,000, the median was down to $412,000 by December. This is a fall of 13% so far.

The lack of coherent thinking in the text of the article contrasts with the interview with Ara Hovnanian that appears on the same web page. I went away with the impression that Ara Hovnanian has his head screwed on tight and that the Goldman Sachs housing analyst has lost the plot. Maybe Sky Business garbled the message that Goldman Sachs put out?

Also confusing are Goldman Sachs recent forecasts of interest rates:

November - mortgage rates will drop to 5% by March and property values will rise 1.8%
December - 6.2% average rate for 2023
January - 6.5% by 2023 year end (not sure how skyrocketing takes place in this context)

Noone has ever been very good at forecasting mortgage interest rates more than a couple of weeks in advance. This includes the Mortgage Bankers Association and it especially includes Goldman Sachs whose track-record on interest rate forecasts is extremely poor. This is not saying much because there is no-one who gets them right more than by random chance.

Any time spent listening to people making interest rate forecasts is time you could have spent more productively."

- Michael Orr, Founder of The Cromford Report, the recognized top authority on the economics behind the Greater Phoenix real estate market

January 2023 Phoenix Real Estate Snapshot

Thu, 12 Jan 2023 06:27:27 GMT

Phoenix Buyer Market - Aaaand It’s Gone; Median Price Down $65,000 Since May

For Buyers:
Last year, traditional buyers took a back seat to an influx of cash investors and speculators who outbid them. Then mortgage rates increased and suppressed their power even more. This was especially prominent in the market under $500K where owner occupant buyers made up just 56.8% of sales in June (normally 70-75%), and investors took 31% (normally 11-17%).

As of November, traditional buyers have once again returned to 71% market share under $500K, and investors have retreated under 20%. Investors make up the majority of losses associated with recent price declines. This is great news, especially for first-time home buyers, as prices have come down significantly for starter homes. The median sales price for a 1,400-1,600 sq. ft. single family home has declined from $435K in May to $370K so far in January; a decline of $65,000, or 15%. At today’s mortgage rate of 6%, that’s a savings of at least $352 per month in payment.

This is in line to the overall median sales price, which also declined $65,000 from $475K to $410K. To sweeten the pot, both FHA and conventional loan limits increased for 2023. FHA increased from $441,600 to $530,150, and many lenders began honoring the 2023 loan limit before 2022 ended. As a result, the market share of sales with FHA financing under $500K increased from a low of 11% in March to 20% by November.

Many first-time home buyers take advantage of FHA financing as they have softer requirements for approval and their rates are typically lower than conventional loans. Some buyers believe that prices will continue to drop dramatically in 2023 and continue to wait. However, after a brief 4-week Buyer Market from November to December, the ratios of supply to demand are showing Greater Phoenix moving back into a Balanced Market. This means less downward pressure on price going forward and, if inflation and mortgage rates continue to decline, the worst may be behind us.

For Sellers:
Happening right now is a shift out of the shortest Buyer Market ever recorded by the Cromford Report. The shift is a direct result of the fewest number of listings added to supply in the 4th quarter of the year going back to 2000. Fewer listings mean fewer competitors for sellers. Demand is still very low, but when it’s met with low supply there is less downward pressure on price.

In November, every region in Greater Phoenix was in a Buyer Market except for the Northeast Valley. By mid-January, Phoenix, Glendale, Mesa, Tempe, Avondale, Gilbert, and Chandler had all come out of Buyer Markets and into Balance, except for Chandler which leapt into a Seller Market. Not far behind are Peoria and Surprise. The only large cities left in strong Buyer Markets are Goodyear, Queen Creek (including San Tan Valley), Maricopa, and Buckeye.

This does not mean that sellers can expect 2021 and 2022 scenarios to come back. Price drops, negotiations, concessions, and rate buy-downs will continue to be the key to keeping buyers in the game this quarter.

Currently, 51% of all January sales have involved some form of concession from the seller, with a median cost of $9,854; in line with the cost of a temporary rate buy-down. While Avondale is in a Balanced market, 85392 over the last 30 days showed 14 out of 15 sales with concessions and a median of $12,000 to buyers. In addition to concessions, final sale prices are showing sellers getting an average of 96.7% of their last list price.

This is not unusual for a Balanced Market. The luxury market over $1.5M sees fewer concessions, but more price negotiation. January sales so far show sellers closing at an average of 94.5% of their last list price in this segment.

Under $500K, sellers are closing at 97.4% of list price. All in all, the majority of sellers are coming out ahead at closing. 65% of active resale listings have been owned for at least 2 years. The long-term appreciation rates for homes in Greater Phoenix are as follows using January sales to date: 25% for 2yrs., 50% for 3yrs., 63% for 4yrs., 70% for 5yrs., and 86%+ for 6yrs or more.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

December 2022 Phoenix Real Estate Snapshot

Thu, 08 Dec 2022 06:21:03 GMT

One-by-One, Most Cities in Greater Phoenix Succumb to a Buyer’s Market; 44% of October Sales Involve Seller Paid Concessions to Buyer

For Buyers:

Buyer demand has been more reactive to mortgage rates than normal, but that’s to be expected at the rate of increase we’ve seen this year. In terms of affordability in Greater Phoenix, a household making the median family income should normally be able to afford 60-75% of what’s sold. That measure for the 2nd and 3rd quarters of 2022 was only 22%. Some believe it would take years for affordability to return to a normal range unless sales prices drop dramatically, but that’s not necessarily true. As rising mortgage rates have quickly pushed affordability down, declining mortgage rates can quickly push it back up.

Affordability is determined on 3 things: family income, 30-yr mortgage rates, and sales price. Price is not the only factor that needs to change in order to push affordability back to a normal state. For example, in order for the current median sales price of $418,000 to be considered affordable to a family making the median income of $88,800 in 2021, mortgage rates would have to drop to 3.35%. Or, the median income would have to increase to $119,000 per year. Both of those scenarios are too extreme to expect in a short amount of time. However, it’s reasonable to believe they will meet somewhere in the middle in 2023.

HUD will not release updated income measures for 2022 until May 2023*. However according to the AZ Department of Economic Opportunity, year-over-year wage income has shown a 5-8% increase each month through October. If we estimate a total 7% increase in median family income, that results in a median of $95,000 per year. With 10% down, that puts a family’s budgeted purchase price of a home around: $335,000 at a 6.3% rate, $368,000 at 5.3%, and $406,000 at 4.3%.

From this example, we can see that mortgage rates have a stronger chance of reversing affordability issues faster than any other factor and can mean the difference between a 20% drop in prices and a mere 3% drop. The only experts who can accurately predict the direction of sales prices are those who can accurately predict mortgage rates. However at this stage, mortgage rates are still volatile and most predictions have been flat out wrong.

If rates rise, prices will have to drop more to reach optimum affordability. If they drop, prices will not have to drop nearly as much. The best advice for buyers is to stay engaged with where rates are on a daily basis, and be fully educated on lender programs and seller incentives available so that they can be the first to act when the property and the payment is right for them.

For Sellers:

Welcome to an official Buyer Market in Greater Phoenix, albeit a weak one, for the first time since 2010. As expected, the city of Phoenix finally succumbed to a Buyer Market mid-November, thus classifying the entire market as such. (The northeast cities of Paradise Valley, Scottsdale, Fountain Hills and Cave Creek are all still either Balanced Markets or mild Seller Markets.) While market indicators were plummeting from an extreme Seller Market to Balance between March and June, the trip from Balance to a Buyer Market from July to December has been more like a gentle glide.

Price responses didn’t wait for the official calling, median sale prices began showing a decline after May and as of this date are down 12%, essentially erasing appreciation gained since November 2021 and resulting in a 1.6% negative year-over-year median change.

From here on out, expect reports of negative annual appreciation rates every month as each measure will now be compared to the first half of 2022 price measures.

Moving into 2023, even if mortgage rates stay the same, it is expected that contract activity will increase seasonally as it does every year. Rate buy-downs will remain a key factor in buyer incentives unless rates decline. However, after a long 4th quarter sellers should be able to enjoy more traffic, fewer days on market, and serious buyers in the first half of 2023.

Generally speaking, neither sellers nor buyers prefer to engage in real estate during times of uncertainty. Dramatic fluctuations in mortgage rates combined with insecurities surrounding inflation and unemployment have pressed pause on housing decisions for many sellers and buyers alike, for now. If mortgage rates drop, they’ll get off the fence.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

November 2022 Phoenix Real Estate Snapshot

Tue, 08 Nov 2022 01:43:26 GMT

One-by-One, Most Cities in Greater Phoenix Succumb to a Buyer’s Market; 44% of October Sales Involve Seller Paid Concessions to Buyer

For Buyers:

Greater Phoenix as a whole has been in a balanced market since August, but is expected to glide into a buyer’s market by mid-November. Buckeye, Maricopa and Queen Creek entered a buyers market in July. Surprise, Chandler, Gilbert and Tempe followed in August. Goodyear, Peoria and Avondale joined in September with Mesa and Goodyear falling in line by October. Phoenix is expected to succumb this month within a matter of days. The only holdouts remain in the Northeast Valley cities of Paradise Valley, Fountain Hills, Cave Creek and Scottsdale.

The 2022 peak of price was achieved in May, which was the result of contracts accepted in late March and April. Starting in June, sales prices revealed their decline in response to mortgage rate increases. At the end of October, the decline in average sales price per square foot since May was recorded at -9.1%, but still positive year-over-year at +5.7%. The largest declines happened between June and July at -4.5% and between August and September at –3.6%.

Mortgage rates have stabilized between 7.0-7.3% for the past 6 weeks, all of October and November-to-date, and continue to keep buyer demand low for now. This provides an opportunity for buyers as more sellers agree to contributing to closing costs and rate buy-downs. October sales saw 44% of sales involve a seller contribution to the buyer at closing, with a median contribution of $7,400. Closings in the first week of November showed a median contribution of $9,000.

The tricky thing is that these seller-paid concessions are not recorded with the sales price. It’s common to see a buyer offer a higher price in exchange for closing cost assistance or a rate buy-down. This tactic can make the sales price measures appear to drop slower or even stabilize as the cost to the seller increases underneath that number on the settlement statement.

The flaw in waiting for the market to bottom out before purchasing is that no one knows they’re buying at the bottom when they buy there. The bottom, or top, of the market does not become apparent until 3-4 months after the contracts were written. By the time most buyers figure out that the market hit rock bottom, they’re too late to the party.

For Sellers:

While the environment has turned quickly away from a seller’s market to an impending buyer’s market, and the cost to sell has increased significantly for sellers, most are still walking away from the closing table with a profit.

While most reports are focused on short-term price drops since May, or smaller year-over-year appreciation rates, appreciation rates for homeowners who have owned their home for at least 2 years are still impressive. Approximately 65% of MLS listings, excluding new construction, have been owned for 2 years or more. Appreciation rates based on sales price per square foot through the MLS are: 2 years: +33.6%, 3 years: +59.9%, 4 years: +68.1%, 5 years: +84.8%.

Fewer sellers are opting to sell in this market. Since the tipping point in June, weekly accepted contracts have fallen 36%, counterbalanced with a 34% decline in weekly new listings. Historically, October typically adds about 10,000 new listings to supply, but this October was the lowest recorded at just 7,334 new actives plus 188 in Coming Soon status, a record low for the month. This has caused supply to stagnate over the past 4 weeks and is a small relief for existing sellers.

When supply self-regulates in response to lower demand, it puts less downward pressure on price. Not to say prices will not decline, they will, but it would be worse if supply were also rising. Contracts written in November and December will close in January and February next year. As Greater Phoenix glides into a buyer’s market this month, year-over-year appreciation rates are likely to turn negative in 2023.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

October 2022 Phoenix Real Estate Snapshot

Sat, 08 Oct 2022 01:34:08 GMT

More Buyers Got Help With Closing Costs in September; What To Expect for Housing in the 4th Quarter

For Buyers:
The price reductions keep coming. Last week when mortgage rates hit 7.0%, the Greater Phoenix housing market responded with 4,427 price reductions, 24% of all active properties in the MLS. At least 50% of those dropped their price by $12,000 or more.

September saw 1,372 closings involving seller closing cost assistance to the buyer, equating to 23% of MLS sales, with a median concession of $7,000. This is a 334% increase from last June’s count of just 316 sales involving concessions. New home sales through the MLS showed 33% with concessions, and 50% at $10,000 or more. OpenDoor, as a seller, paid concessions on 355 transactions, 77% of their sales through MLS, with 50% costing $6,000 or more.

Closing cost assistance is expected to continue to rise into the 4th quarter as mortgage rates continue to stay high and stifle demand for the time being. Aside from paying the buyer’s costs for title insurance, pre-paid taxes, insurance, lending fees, and other closing costs, seller-paid concessions can also be used to buy down a buyer’s mortgage rate, if applicable, and ease the pressure on their monthly payment.

For Sellers:
The 4th quarter is expected to be a test for sellers as mortgage rate hikes have reduced contract activity to levels not seen since 2008. Frankly, it’s not the best time to sell if you have a choice in the matter. Unlike 2008 however, most sellers today do have a choice and those without an immediate need to sell have chosen to wait. This is reflected in some of the lowest counts of new listings coming on the market recorded at this time of year going back to 2001.

Fewer new listings is a ray of hope for existing properties on the market. If new listings are trickling in and new buyer contracts are trickling out, then overall supply does not spike and cause further downward pressure on price. Thus keeping the market in a delicate balance for now.

Prices hit their peak in May, shortly after mortgage rates hit 5% and before they peaked over 6% in June. Once that happened, buyer demand dropped dramatically and the reflection in prices started to show a trend downward. Now rates are near 7% and sale price per square foot is down 9.6% over the course of 4 months, currently measuring less than 1% higher than January 2022 and representing the elimination of appreciation achieved from January through May.

While this is disappointing to those who purchased this year, 66% of active sellers in the MLS (new homes excluded) have owned their home for 2 years or longer. This means that even with the most recent downturn in price, the 2-year appreciation rate from September 2020 to September 2022 is still 40.3% based on per square foot measures, and the median sale price is $112,000 higher, indicating most sellers have enough equity to shoulder the added costs to sell in this marketplace if they must.

Finally heading into the 4th quarter, expect marketing times to increase as they typically do this time of year. Median days on market prior to contract was 31 days last week. From October through December, active days prior to contract is known to rise anywhere from 44 to 56 days historically, with 50% of listings going longer.

The key words for sellers in this “new” market are condition, price, concessions, and patience.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

September 2022 Phoenix Real Estate Snapshot

Sat, 10 Sep 2022 01:26:58 GMT

32% of New Home Sales Had Concessions to Buyers; Mortgage Rate Hikes Cause Drop in Contracts Again

For Buyers:
The percentage of closings with seller-paid closing costs continues to grow as August and September to date range between 12-13% of total sales in Greater Phoenix, inching closer to the normal range of 25-28%. Areas on the outskirts, such as Casa Grande, Maricopa, Coolidge and San Tan Valley in Pinal County and Wittmann, Tolleson and Buckeye in western Maricopa County all have 20-30% of sales closing with concessions. These areas have more than their fair share of new home subdivisions that contribute to this measure as 32% of new homes that closed in the MLS in the last 6 weeks involved concessions, compared to only 11% of resale homes.

As mortgage rates remain volatile and difficult to predict, it’s important for buyers to get educated on the lending tools designed to ease the impact of dramatic rate swings. Tools such as the “Lock and Shop” option, offered by some lenders to allow buyers to lock at an acceptable rate for up to 90 days, and seller-paid permanent and temporary rate buy-down incentives designed to dull the sting of payment increases.

Buyers who are less affected by mortgage rates, but are looking for the best time to pounce on a home, should know that the 4th quarter of the year tends to be the best time for buyers seasonally. There is often a boost in supply around September and October with sellers eager to close before the end of the year. Once 2023 gets started, contract activity is expected to rise sharply from January through May. The upcoming Super Bowl, Phoenix Open and Spring Training events are expected to generate more open house traffic and exposure for active listings.

For Sellers:
The last 3 weeks saw more hikes in mortgage rates, rising from recent low weekly averages of 4.99%, 5.22% and 5.13% in early August to 5.55%, 5.66% and 5.89% in late August and early September. A similar spike happened last June when rates spiked from an average of 5.09% to 5.81%, also within 3 weeks. The result was a 28% drop in weekly accepted contracts over the course of 4 weeks and the worst July for closings since 2007. Then rates got better, dropping to an average of 4.99% by August 4th. The buyer response was near immediate with a 25% boost in accepted contracts within a 4 week period. The latest spike has unfortunately resulted in another dramatic drop in buyer contract activity, down 14% in 2 weeks.

For now, the housing market is not for the faint of heart, only serious sellers need apply. Gone are the days of buyers waiving appraisals and inspections, Wall Street cash buyers offering more than asking price, and multiple offers. Over the last 6 months, the housing market has shifted away from an intense seller market to a delicate balance, the predictability of which relies on the behavior of interest rates. Until rates move below 5%, demand in the coming months will most likely remain weak, thus putting more pressure on sellers to reduce their price, offer permanent rate buy-downs, and pay for their buyer’s closing costs. Many sellers are sitting on significant equity in their homes and while the cost to sell has increased significantly, a great majority of those who have owned their property for at least 2 years can bear that extra cost without distress and still close with a significant profit.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

August 2022 Phoenix Real Estate Snapshot

Wed, 10 Aug 2022 01:12:40 GMT

Seller-Paid Closing Cost Assistance Coming Back; This Price Point is Declining the Fastest in Greater Phoenix

For Buyers:
Good news for buyers, the number of closings with seller-paid closing costs rose 27% in July compared to June equating to 7% of all closings for the month. That may not sound like much, but that’s the highest it’s been since March 2021.

Prior to 2020, the established baseline for seller-paid closing cost assistance averaged 25-28% of MLS sales and over the past 15 months the average has been just 3-4.5%. The increase is expected to continue as large cash-based investors have pulled back their acquisitions, leaving many sellers to cater to normal buyers once again. For most of 2021 and the first part of 2022, buyers had very little time to decide on a property before it went under contract. Last May, half of all homes that went under contract were on the market for only 7 days or less. This month homes are on the market a median of 21 days prior to an accepted contract, giving buyers more breathing room for a second showing and less pressure to make a decision on the spot. More evidence of a growing buyer’s advantage, the percentage of properties closing over list price has declined from 58% in April to 24% August-to-date and continues to decline. The median amount over list has also declined from $20,000 to $7,000. As the current balanced market continues, expect to see this measure drop to just 10%-15% closing over list.

For Sellers:
The last week in July saw 4,172 price reductions on Greater Phoenix listings, equating to 26% of active supply for that week. The median price reduction was $15,000 and 78% were over $5,000. The peak of price for 2022 so far was May, since then the median sales price has declined 6.25% from $480K to $450K. That’s an average of 2% per month thus far, however the downward trend has not been consistent across all price ranges; a detail not reflected in the median sale price measure. To analyze the price response by sales price range, we use the sales price per square foot. In May, the peak sales price per square foot overall was $305.99, August-to-date is $289.89, a 5.3% drop averaging 1.8% per month.

This is a similar result to the change in median sale price, but by price range the distribution looks like this:

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

July 2022 Phoenix Real Estate Snapshot

Fri, 08 Jul 2022 01:07:02 GMT

Seller Market is Officially Over! Here’s What to Expect; How Some Sellers Are Winning Against Interest Rates

For Buyers:
Welcome to a balanced market*, how quickly the tables have turned! While seller markets are ideal for the not-so-perfect home, balanced markets are ideal for the not-so-perfect buyer. This means that buyers who have been recently rejected due to lower down payments, non-conventional financing, or need for closing cost assistance will find sellers are now willing to work with them in this new environment. Supply across all price points is up, with 53% of active listings added by new home developers and investors. Builders especially are dropping prices and offering unique buyer incentives to compete. Experts don’t know how long this period will last as it depends on what interest rates do over the next few months, but home buying just became fun again.

*The market is considered in balance when the contract ratio is between 30-60. Calculated by dividing what’s under contract (8,680) by what’s active (15,033) and multiplying by 100, the contract ratio as of July 7th, 2022 is 58.

For Sellers:
The proverbial “Dump Your Junk” season is over, that loving phrase the industry uses when demand is significantly higher than supply and even the smelliest dilapidated property gets multiple offers over asking price. That is no longer the case as of this writing. Get ready for longer marketing times, multiple price reductions, Realtor® tours, price opinions, staging, repairs, seller-paid closing costs and price negotiations. The extreme seller market is over.

It’s no surprise that the market has been shifting since February, with the primary influence being large mortgage rate increases. However, over the past 6 weeks mortgage rates have been particularly volatile, fluctuating from 5.1% to 5.8% within 3 weeks only to drop to 5.3% over the next 2 weeks, and then back up to 5.8% a week later. History tells us that buyers do not like sharp, rapid fluctuations in mortgage rates. It causes buying activity to freeze until a level of stability and certainty can be achieved. This market is no different, contract activity has dropped 28% in the last 6 weeks. The number of listings under contract at this time of year should be around 10,000, putting today’s count of 8,680 well below normal.

In the meantime, a 220% increase in supply over the past 15 weeks has put pressure on sellers to compete. With cash buyers offering significantly below list price recently, attention is back on traditional buyers, many of whom have been priced out of the market due to affordability. Price reductions have gone up 500% since March, but have done little to increase demand as mortgage rate increases offset their effect and continue to keep payments high.

But not all is lost! Cue the interest rate buy-down, a seller concession tool that has been collecting dust, unneeded, for well over a decade. The reason price reductions have had little effect on affordability is a $10,000 price reduction only saves a buyer $53 on their mortgage payment at 5.8%. However, for a similar cost a seller can buy down a buyer’s mortgage rate and save them $100’s on their monthly mortgage payment, either permanently or temporarily depending on the plan; thus putting their property at a higher competitive advantage than just a straight up price reduction.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

June 2022 Phoenix Real Estate Snapshot

Fri, 10 Jun 2022 00:54:18 GMT

MLS Supply Up 113% Over Last Year; Median Days Prior to Contract Rising

For Buyers:
Market conditions continue to get better for buyers undeterred by rising mortgage rates. Over the last 10 weeks, there has been a surge of new listings in every price point over $400K, pushing the supply level up 113% over this time last year. The surge in new listings is not happening under $400K, however rising interest rates have caused demand in this price range to decline. As a result, supply is rising on the low-end due to buyers pulling back, not excessive new listings.

In a nutshell, when sellers have to compete, buyers win. What they win at this stage is their sanity and some normalcy in the home buying process. By normalcy, typical contract requirements such as appraisal and inspection contingencies remain in place. There may be multiple properties available that fit a buyer’s needs, instead of only one with multiple offers already submitted. The median number of days prior to contract is now 11, up 4 days from last month, which provides more breathing room for scheduling showings.

For some buyers, this moment is bittersweet because it comes with higher mortgage rates. However, interest rates typically do not stay high, or low, forever. The Mortgage Bankers Association expects mortgage rates to decline to 4.4% by 2024. How does that play out for someone who buys a home today? Let’s look.

Current rates at 5.2% place the estimated principal and interest payment for a $425,000 loan at approximately $2,335 per month. Fast forward to the future, the remaining mortgage balance after just 2 years of payments would be $413,000. Hypothetically, if interest rates are 4.4% by this point, a refinance of the remaining balance would lower the payment to $2,068, saving $267 per month.

If a potential home buyer instead decides to wait 2 years for the interest rates to decline to 4.4% before purchasing, assuming home prices stay exactly the same, their PI payment on a $425,000 loan would be $2,128, only saving $207.

The problem with waiting for the perfect time to purchase a home is that most people don’t realize the timing is perfect at the time it’s actually perfect. For this reason, planning to hold property long term is the best way to mitigate short term risk and take advantage of refinance opportunities as they come, continually building equity regardless of what the market is doing.

For Sellers:
As competing supply continues to rise sharply, certain sales measures are expected to start changing rapidly. One of the most dramatic measures is the percentage of closings over list price and the median dollar amount over asking price.

April 2022 saw 58% of sales close over asking price with a median of $20,000 over. So far, closings in June show 51% closing over asking price with a median of $15,000 over. Even in weaker seller markets, excellent properties well priced receive multiple offers and sell over asking price. The difference is that they typically only make up about 15% of sales with a median of $3,000 over. So the market isn’t back to normal yet, but it’s rapidly moving in that direction.

Price reductions are now up 258% in 10 weeks, but just over the past 5 weeks the days on market prior to contract has started to rise as well. Over the next 4 weeks, expect the number of closings over asking price to drop sharply along with the dollar amount and expect to be reintroduced to buyer contingencies, price negotiations, paying for home warranties and eventually closing cost assistance. These aspects will return to the marketplace before sale prices ultimately respond.

This isn’t a buyer market, but for some it feels like it is compared to just 2-3 months ago.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

May 2022 Phoenix Real Estate Snapshot

Tue, 10 May 2022 00:49:50 GMT

MLS Supply Up 45% in 6 Weeks; Rising Interest Rates Dropping Demand Quickly

For Buyers:
It’s the moment you’ve been waiting for, less competition and more supply in Greater Phoenix! Active supply is up 40% from this time last year, but all that gain has been achieved over the last 6 weeks with an increase of 45%. This is an enormous change from April’s report where supply was only up 16% over last year and still below the count reported on January 1st. As of this report, the supply count is 7,157, still 72% below normal for this time of year but rising quickly.

The annual change in inventory is impressive, but it’s the short-term growth that is sending shock waves throughout the market. Inventory listed between $400K-$500K is up 35% in just 3 weeks. Counts in all segments between $500K-$1M are up 99% in 6 weeks and the count from $1M-$1.5M is up 54%, also within 6 weeks. Not all price ranges are rising in inventory. Properties listed below $400K are still flying off the shelves and declining in supply.

The increase in inventory may seem like an early Christmas miracle, but it’s not coming from a massive flood of new listings hitting the market. Visualize supply counts as the level of water in a bathtub, with new listings coming through the faucet and accepted contracts going down the drain. The water level can rise if there are more new listings coming through the faucet, or if there are fewer accepted contract flowing down the drain. In this case, new listings are at normal levels and not excessive, but fast rising mortgage rates have reduced the number of accepted contracts and closed the drain. This is what is causing inventory in the “bathtub” to increase dramatically.

While recent interest rates are disappointing for many buyers, causing some to drop out and wait, history has shown us that they rarely stay high, or low, forever. While it’s near impossible to predict when interest rates may begin to decline, if we look over the last decade when interest rates have risen by 1% or more within a year, it has taken anywhere from 1 to 3 years for them to return to their original starting point. Even when rates increased by a whopping 5% over 14 months from 1980-1981, it only took 1.5yrs to drop back to where they started. Future expected interest rate drops over the next few years along with moderate home price appreciation and monthly principal reductions may provide today’s buyers the opportunity to lower their payments by hundreds of dollars down the road.

For Sellers:
The market is in the early stage of shifting out of an insane seller market and into a mere frenzy seller market. Before we know it, it could be a regular old hot seller market where properties still appreciate but take multiple weeks to sell, buyers don’t waive their appraisal contingency, and sellers happily pay for home warranties. But before all of that happens, it starts with one simple act from a seller, a list price reduction.

As inventory has risen at a fast pace over the past 6 weeks, so have the number of weekly price reductions as sellers compete for fewer buyers. Listings between $400K-$500K have seen a 103% increase, with the median price drop at $13,000. Price drops in $500K-$800K range increased 157%, with median drops between $16,000 and $20,000. Drops in the $800K-1.5M range increased 125%, with a median drop between $25,000 to $50,000.

So far, price reductions have proven effective in keeping the median days prior to contract around 7 days. However, as inventory continues to rise in the coming weeks, price reductions may not be enough to keep some properties from lingering longer in active status, creating more choice for buyers and strengthening their bargaining power.

While the market is still strongly in favor of sellers, it is changing rapidly. For those sellers waiting to sell close the peak of price, this may be the time to list. Prices are still projected to continue rising, but at a slower pace over the next few months.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

April 2022 Phoenix Real Estate Snapshot

Sat, 09 Apr 2022 00:41:15 GMT

57% of Sales are Over Asking Price; Median Sale Price Up 27% to $457,000

For Buyers:
Supply is still the top concern for buyers these days and we continue to look to new construction to add new homes and ease the pressure on price. The top areas for new single family home sales are the West Valley, with 44% market share, and Pinal County, with 27% market share. The Southeast Valley comes in 3rd with 17%. If you’re looking to the West Valley for a new home, your best bets are Laveen, just east of the new 202 freeway loop, and cities just west of the 303 freeway such as Peoria, Surprise, Waddell, Goodyear and Buckeye. In the Southeast Valley, new home subdivisions are concentrated in East Mesa, Queen Creek, South Gilbert and South Chandler. In Pinal County, Casa Grande and Maricopa have the most new home sales.

As of February 2022, the median cost of a new home closed was $447,000 overall with a median size of 2,197 sq. ft. That was just under the resale median of $450,000 in the same month, which had a median size of 1,783 sq. ft. In the West Valley, the new home median is $443,000 with 2,237 sq. ft. In the Southeast Valley that median is $579,000 and 2,456 sq. ft., and in Pinal County it is $385,000 with 1,888 sq. ft.

New home developers continue to struggle with a labor shortage and supply chain issues. It’s not uncommon for builders to estimate 14-16 months before completion of a home. Because prices have been rising sharply, this means that by the time a home is built, the costs to complete it have gone up and it’s already worth significantly more than the negotiated purchase price. For this reason, some builders are including escalation clauses in their contracts that allow them to raise the price prior to close of escrow to accommodate the higher costs to build and closer reflect the current market value. In addition to escalation clauses, a handful of builders are including restrictions on when a homeowner can sell or rent the home after close. It’s important to read builder contracts closely and ensure you understand every section before moving forward.

For Sellers:
The market continues to heavily favor sellers. Supply is still 76% below normal for this time of year and demand is 6% above normal. However, demand is declining in response to recent increases in interest rates. Just 30 days ago, demand was 12% above normal, and 30 days prior to that it was 21% above normal. Buyers across the nation are in the best financial shape seen in decades with an average credit score of 714 last year, according to Experian, and Maricopa County has the lowest percentage of consumers with credit scores below 660 in at least 22 years. However, in just a few short months, the average interest rate increased from 3.1% in December to 4.7% by April. This resulted in a $500 increase in the estimated payment on a 1,500-2,000 sq. ft. home, pushing the cost to buy significantly higher than the cost to rent in Greater Phoenix.

This does not mean the market is at its peak, or at the precipice of a price decline. The only response we are seeing at this time is a sharp increase in supply between $500K-$1M over the past 2 weeks, a price range that happens to have less interest from investors and 2nd home owners and a higher market share of owner-occupants. Despite this increase in supply, the median days on market prior to contract is still only 7 days, and there aren’t any bold movements in price reductions or seller concessions. Until we see an upward shift in price reductions and seller concessions, we will not see a flattening out or decline in sale prices.

Currently, April closings to date have seen 57% of closings over asking price and a 22% appreciation rate compared to April 2021 thus far. While it’s reasonable to expect price appreciation to slow down at some point, there is little evidence at this stage to show prices declining in the near future.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

March 2022 Phoenix Real Estate Snapshot

Thu, 10 Mar 2022 00:33:48 GMT

Short Term Rentals up 23% NE Valley; MLS Rental Supply up 60% in 5 Months

For Buyers:
Don’t be fooled by the small increase in supply and decrease in demand compared to last year. The Greater Phoenix housing market is far from weak and will continue to see prices appreciate in the foreseeable future. Housing market indicators move slowly, unlike other types of investments such as stocks or currencies. When events such as interest rate hikes or stock market fluctuations occur, there isn’t an immediate measurable response in housing prices.

Consumers may “panic sell” stocks, crypto, or even their belongings; however, selling the roof over their head or a performing rental is typically the last resort. For this reason, jolts to the economy (like a sudden pandemic or economic sanctions) need to be in effect for many months without improvement for housing to see prices finally respond.

A unique player in the housing market is the short-term vacation rental. This product is specifically prolific in Northeast Valley cities such as Scottsdale, Paradise Valley and Cave Creek. According to AirDNA, Scottsdale alone was estimated to have 5,400 active short-term rentals as of December 2021, up 23% from the 4,400 estimated just last September and equating to over 4% of existing housing supply for that city. This changes the game in evaluating the value of property in high tourist areas like Kierland and Old Town Scottsdale. Instead of the traditional route utilizing past sales and adjusting for amenities for residential occupancy, certain homes are valued as individual businesses that come complete with a revenue stream, furnishings, established clients, websites, advertising contracts and hired support services. Under these circumstances, appraisers have their hands full distinguishing between a business sale and residential resale when evaluating appreciation.

To compound the issue in the Northeast Valley, new construction permits are not as abundant as they are in the West Valley and Southeast Valley; meaning there is little relief in the form of future new housing supply to accommodate both full and part time demand in the area.

For Sellers:
Greater Phoenix is not close to peaking in price for residential resale, not with supply of homes for sale 76% below normal for March and demand 13% above normal. However, be aware that the estimated payment for a 1,500-2,000 square foot home is now $77 higher than the median rent for a similar rental leased through the Arizona Regional MLS. The rental market responds to a shift in demand faster than the resale market does because landlords are faster to respond with a lease price reduction if their investment is vacant for too long.

In 2021, median asking rents jumped from $1,855 in January to a peak of $2,395 by September, an increase of $540, and have remained between $2,300-$2,400 per month since. Tenants accommodated the increases until about June, then the median for closed leases stalled at $2,100 per month. Despite the stall, landlords continued to increase their asking rent and saw the supply of available rentals rise by 60%. This is a significant development because the only reason a landlord would decide to compensate a real estate agent by listing their rental in the MLS is if they’re not renting it fast enough through other means.

You may be wondering why this matters to you as a home seller. The health of the rental market is often looked at as an indicator for the health of the resale market. If lease rates continue to go up and are successfully closed at those rates, then that’s a good indicator for resale prices as well. When rental rates reach a ceiling and stay there for months, then it’s possible the resale market may follow, but as stated earlier, resale is slow to respond. It could take many more months before the shift is realized, so for today it’s business as usual.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

February 2022 Phoenix Real Estate Snapshot

Thu, 10 Feb 2022 00:28:52 GMT

Housing Market is Just as Tough for Buyers over $1M; Median Sale Price up 2.4% Over Last Month

For Buyers:
Affordability has been dominating the headlines as of late, however few have been documenting the plight of buyers in the luxury market over $1M. Typically, the higher in price one can go, the more they’d expect to see less buyer competition, more choice and more negotiating advantage. Not so.

In more expensive areas such as the Central Phoenix/Camelback Corridor, Paradise Valley, Scottsdale, Fountain Hills and Carefree/Cave Creek, supply of homes is still not sufficient for the demand. This is true even for buyers with budgets from $1M to $3M where 31% of sales close over asking price and many buyers need to prepare to offer $50,000 or more over market value.

In Paradise Valley, on February 5th there were 85 active listings in the Arizona Regional MLS and 85 in escrow. From 2015-2019, supply ranged from 370-450 active listings in February and 53-93 under contract. So while demand is within range, the fact that there are so few properties to choose from means that competition remains tight. The median time prior to an accepted contract was 13 days and prices rose 34% in the past year; impressive for a city where the median sale price is currently $2.79M.

In the Central/Camelback Corridor of Phoenix, typically there would be 140-200 active listings over $1M and 19-52 under contract . However, on February 5th there were only 55 active and a whopping 88 under contract. The median time on the market prior to contract was 10 days and property values have risen 28% per square foot since last year.

Similar stories can be heard throughout the luxury market. Scottsdale would typically see 800-1,000 listings over $1M with 80-240 under contract in February. On February 5th there were 274 active and 365 under contract. Buyers have a median of 7 days before a listing over $1M is under contract and 34% of sales closed over list price.

For Sellers:
The median sales price went up another 2.4% over the past month, which is impressive considering the average mortgage rate increased from 3.11% in December to 3.55% by the end of January, according to Freddie Mac. Buyers who have been waiting for prices to stop accelerating, possibly even flatten out or decline, have been disappointed for at least 18 months in a row as home values appear to defy the affordability limits of the population. Despite prices continuing to rise, there is still an expectation that rising interest rates will eventually influence demand, and thus prices, sometime this year.

Frankly, that’s not an unreasonable expectation under normal circumstances. However, the housing market is far from normal right now. Over the course of 30 days, demand has gone from 23% above normal to 19% above normal, so there has been some shifting in demand that can be attributed to mortgage rates and their effect on affordability. But demand is still very high, and supply moved from 72% below normal to 75% below normal during the same time frame. This drop in supply mitigated any relief the drop in demand would have had on rising prices.

When the total number of homes in an area is insufficient for the number of people living there, the interest rate has less impact on rising home values. There are fewer homes for sellers to move to, so they choose not to place their home on the market at all. Even if demand falls due to mortgage rate increases, if it remains above normal while supply remains below normal then property values will continue to rise.

Unless the supply of MLS homes for sale achieves a range of 16,000-24,000 listings, prices will continue to rise before demand drops low enough to stop them.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

January 2022 Phoenix Real Estate Snapshot

Sat, 08 Jan 2022 00:17:31 GMT

Cost to Rent vs. Buy in 2022; Owner Occupant Buyers Retreated in 2021

For Buyers:
As the cost of purchasing a home increases in Greater Phoenix, the question of whether to rent or buy becomes harder to answer for some buyers. The overall median cost of a home is currently $425,000, and for a typical 1,500-2,000 square foot home, the median cost is $420,000. The estimated payment, assuming 10% down and including principal, interest, taxes and insurance, is $2,123. The median monthly rental rate for the same size range, recorded through the Arizona Regional MLS, was $2,195 in the 4th quarter of 2021; just $72 per month more.

Some buyers might question the advantage of purchasing a home in order to save $72 per month. However, the financial advantage of owning vs. renting is typically realized for those who own their home for at least 3-5 years.

Let’s assume, hypothetically, that a buyer purchased a home today for $420,000 with a $42,000 down payment (10%). Over the next 5 years, their home’s value fluctuates up and down and in the end doesn’t appreciate. That may sound horrifying, however during this time the loan principle has been paid down to $336,000. The homeowner’s equity has doubled from $42,000 to $84,000 without their home appreciating a dime, and with 20% equity they no longer have to pay private mortgage insurance. Their payment declines $200. Still a win.

Now let’s assume, hypothetically again, that while our homeowner is paying down their loan, the home value fluctuates up, down and sideways, but still averages a 6% appreciation rate over 5 years (close to the current rate of inflation). The home would be then be worth $562,000, an increase of $142,000.

After 5 years, this hypothetical homeowner went from $42,000 to $226,000 in equity, and their monthly cost was nearly the same as what they would have paid in rent anyway. For this reason, even when the monthly payment required to buy is close to that to rent, buying still wins in the long game.

For Sellers:
Despite rumors of the U.S. housing market cooling off, Greater Phoenix has moved farther into a seller’s market over the past month. Growing disparity between supply and demand in our market means there is little evidence to suggest price appreciation will slow in the first quarter. After a strong summer, new listings slowed down in the 4th quarter of 2021, while the number of accepted contracts remained high. The result is 2022 starting off with another historically low supply level, and listings under contract, while 7.6% below 2021, still strong with the 2nd highest count since 2014.

It’s an accepted opinion among local analysts that income levels in Greater Phoenix cannot sustain another year of 28% annual appreciation, especially if interest rates continue to increase. However, seeing there is little relief from home builders adding more supply to the equation, it’s reasonable to expect the market to respond with a softening of demand. This trend started to reveal itself in the 2nd Quarter of 2021 in a subtle manner.

Since 2014, buyers purchasing their primary residence have made up 70%-76% of total residential purchases in Maricopa and Pinal County. In Q2 2021, that percentage dipped to 67%, and declined to 63% by October. While traditional buyers retreated, competing buyers for 2nd homes and institutional buyers made up of Wall Street-backed iBuyers, hedge funds and other investment groups stepped in. Price appreciation slowed from an average of 3.3% per month to 1.1%.

While 2022 is coming out of the gate strong, and the Spring is typically the strongest season for buyers, it remains to be seen how much control investors and 2nd home buyers will take if traditional home buyers retreat. The last time they ignored affordability issues within the community, everyone lost in the end.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

Living In Scottsdale

April 2026 Phoenix Arizona Real Estate Snapshot

Single Family Home Prices Remain Stable Year-Over-Year

Rates Decline Again in April

Metro Phoenix City Rankings for March 2026

This table ranks Greater Phoenix, Arizona cities by their annual average sales price per square foot.

March 2026 Phoenix Arizona Real Estate Snapshot

Listings Under Contract Now Up 10% Over Last Year

Fewer New Listings Entering Market, Supply Stabilizing

February 2026 Phoenix Arizona Real Estate Snapshot

Contracts in Escrow up 7% Over Last Year,

The Market is Better, but It’s Not Easy for Sellers

January 2026 Phoenix Arizona Real Estate Snapshot

These Cities Had the Most Sales Growth in 2025,

Affordability Strains Show Signs of Easing

Is Metro Phoenix in a buyer's market or a seller's market?

Cromford® Market Index for the single-family markets in our 17 largest cities

December 2025 Phoenix Arizona Real Estate Snapshot

Optimism Emerges for 2026 Home Sales,

Incomes Up 33% in Maricopa County since 2020

November 2025 Phoenix Arizona Real Estate Snapshot

Best Q4 for Contract Activity in 3 Years for Greater Phoenix

First-Time Homebuyer Payments are Down 13%-15%

﻿

Metro Phoenix City Rankings for November 2025

This table ranks Greater Phoenix, Arizona cities by their annual average sales price per square foot.

Metro Phoenix City Rankings for September 2025

This table ranks Greater Phoenix, Arizona cities by their annual average sales price per square foot.

October 2025 Phoenix Arizona Real Estate Snapshot

Sales Are Up 19% in This Price Range

Prices Are Down 15% in These Segments ﻿

How to Spot Real Estate Scams (and Protect Your Investment)

Real estate scams are targeting more victims than ever before, and they're becoming increasingly sophisticated.

Wire Transfer Fraud: The Costliest Threat

Rental Listing Scams: Too Good to Be True

Title and Deed Fraud: Stealing Your Home

Fake Buyers, Sellers, and Realtors

Bait-and-Switch Schemes

Best Practices: Your Defense Strategy

BOTTOMLINE

Sources

﻿

September 2025 Phoenix Arizona Real Estate Snapshot

Payments Drop 12%, Monthly Sales Up 9.4%,

As the Market Turns: Could a Recession be Good for Housing?

What Makes a Great Long-Term Rental Property? A Checklist for Smart Investors

When executed wisely, rental properties can deliver steady cash flow today and significant wealth tomorrow.

﻿

How Rental Properties Build Wealth

Who Should Invest in Rentals?

Where to Begin Your Investment Journey

Your Rental Property Evaluation Checklist

BOTTOM LINE

Sources

Metro Phoenix City Rankings for August 2025

This table ranks Greater Phoenix, Arizona cities by their annual average sales price per square foot.

August 2025 Phoenix Arizona Real Estate Snapshot

New Contract Activity Bounces after July 4th,

Active Supply has Been Reduced 14% since April

10 Hidden Home Maintenance Tasks That Could Save You Thousands

1. Gutter Cleaning: Your First Line of Protection

2. HVAC Filter Replacement: Small Task, Major Impact

3. Water Heater Flushing: Preventing Sediment Buildup

4. Dryer Vent Cleaning: A Critical Safety Task

5. Refrigerator Coil Cleaning: The 35% Energy Drain

6. Garage Door Lubrication: Prevents Costly Repairs

7. Sump Pump Testing: Your Basement's Guardian

8. Chimney Cleaning: Preventing House Fires

9. Roof Inspection: Protecting Your Shelter

10. Water Pressure Monitoring: Protecting Your Plumbing

Creating Your Home Maintenance Schedule

The Maintenance Investment Reality

Bottom Line

Sources

July 2025 Phoenix Arizona Real Estate Snapshot

Guess Which City Bounced into a Seller’s Market this Month Where Have Home Prices Dropped the Most?

June 2025 Phoenix Arizona Real Estate Snapshot

Active Supply Declines in May, Luxury Bounces Housing Affordability is Getting Better

May 2025 Phoenix Arizona Real Estate Snapshot

Are Homes Overvalued in Greater Phoenix? Only 6 Cities Left in Seller’s Markets

Prices Are Down 15% in These Segments

Guess Which City Bounced into a Seller’s Market this Month
Where Have Home Prices Dropped the Most?

Active Supply Declines in May, Luxury Bounces
Housing Affordability is Getting Better

Are Homes Overvalued in Greater Phoenix?
Only 6 Cities Left in Seller’s Markets

It’s a Buyer’s Market, Will Prices Drop?

Mixed Emotions for Housing on Positive Jobs Reports

Why Recessions are Good for Most Home Buyers, but Not All

Rate Drops Equal Major Savings for Buyers

The Spring Housing Season is Upon Us,
What’s Hot and What’s Not in Greater Phoenix

How Presidential Elections Affect Housing,
Starter Homes are a Hot Market in Greater Phoenix

Greater Phoenix Balanced Market May Not Last Long,
These Two Factors Could Further Drop Mortgage Rates in 2024

It’s a Buyer’s Market Once Again In These 8 Cities,
Median Seller Incentive Hits a New High