Update on Greater Phoenix Housing Prices
As we look at different price ranges, we can see that all of them have cooled significantly in the three months since April. The least affected is the range over $3 million, where the contract ratio has declined 43% from 67 to 38. In expensive locations like Paradise Valley and Carefree, the supply of active listings remains low by long-term standards and the market is relatively resilient.
Below $3 million contract ratios have declined by at least 74%, a colossal drop in just 3 months and easily the fastest and most significant cooling that has been seen in the Greater Phoenix housing market since we started studying it in 2001.
Hardest hit is the single-family detached price range between $500,000 and $600,000 where the contract ratio has dropped 84% from 296 to below 49. This price range is no longer a seller's market and there are plenty of listings for each buyer to choose from. Bidding wars are almost over. There were 2,434 active listings as of July 1, with 358 of these in UCB or CCBS status leaving 2,076 available for buyers. Is this a lot? It certainly is. It is up 236% from April 1 and up 341% from July 1, 2021. It is also the highest total we have recorded for this price range since June 2008. We must consider it in context. Last month 1,079 homes sold in the price range, so in this light, 2,076 does not seem so high. But most of those sales were contracted well before the latest round of interest rate rises, so we would expect sales rates to drop in July, while the active listing count looks like it is headed considerably higher.
If you have a home in the price range $500,000 to $600,000, our advice is to accept that you have a lot of competition from other sellers and the market trend is not moving in your favor. Be realistic in your expectations and you will probably be fine. But price too high and you could be left chasing a falling market with price cuts that may come too late.
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC