Annual Summary: Phoenix Real Estate Market Update
Overall Summary for 2024
Home sales fell to their lowest levels in 16 years, inventory continued to climb, mortgage rates remained relatively unchanged, and the disparity between asking and sales prices was -$13,519. These are the major factors that kept Metro Phoenix in a buyer's market during 2024. Yet, and despite these factors, prices have rebounded and continued an upward trend.
Prices and Sales Volume
Price per-square foot is a better indicator than median price because it takes into consideration the average size of sold homes, not just the price. The average monthly price per-square foot (PPSF) in the Phoenix Real Estate Market was $11.65 higher in 2024 than it was in 2023.
Comparison of Annual Sales Volumes
Year | # Sales | $$ Sales | Avg. Price | Avg. Size | PPSF |
2024 | 71,944 | $42.1 Billion | $585,244 | 1,992 | $293.80 |
2023 | 72,436 | $40.3 Billion | $556,125 | 1,971 | $282.15 |
2022 | 85,832 | $48.1 Billion | $560,975 | 1,953 | $287.24 |
2021 | 111,486 | $54.6 Billion | $494,285 | 1,997 | $247.51 |
(Source: Arizona Regional Multiple Listing Service)
Here are some notable facts about sales volume and prices in 2024:
Although prices fluctuated over a $22 PPSF range, 2024 produced the highest monthly PPSF average in the history of the Phoenix Area and the highest average sales price of $612,092 in April
71,944 sales were the 6th lowest in the last 25-years, and only 2000, 2001, 2002, 2007, & 2008 had lower sales volume
The $42.1 billion in annual sales revenue was the 3rd highest in the last 25-years, and only 2021 and 2022 had higher total revenue
Click here for more history on PPSF
Click here for more history on sales volume
Click here for more history on year-over-year sales volume
Note: It is important to recognize that property values are based on local neighborhoods, so please do not apply this overall average to your specific area/home. Call us at 602-300-0374 for a personal home valuation.
FOMC Interest Rate Changes
There was dramatic change from a seller's market in 2022 to a buyer's market that's continued through 2024. It all began when the Federal Open Market Committee (FOMC), a division of the Federal Reserve that sets monetary policy, increased the federal funds lending rate to combat inflation.
As of this real estate market update, there have been 11 rate increases totaling 5.25% and 3 recent decreases totaling 1%. The net affect is a 4.25% increase over a 34-month time span ending in December 2024. These increases caused sales to slow, inventory to increase, and prices to drop.
Summary of Rate Changes
Year | # and Direction | Net Effect |
2024 | 3 decreases | -1.0% |
2023 | 4 increases | +1.0% |
2022 | 7 increases | +4.25% |
Average Mortgage Rates by Year
Year | Average Rate | Range |
2024 | 6.74% | 6.12% - 7.22% |
2023 | 6.81% | 6.09% - 7.76% |
2022 | 5.17% | 3.11% - 6.95% |
2021 | 2.96% | 2.67% - 3.18% |
2020 | 3.15% | 2.71% - 3.72% |
(Source: St. Louis Federal Reserve)
The FOMC is continually monitoring factors in the economy to determine their next actions. Although there is a correlation, mortgage rates aren't directly tied to the Fed rate. The economy and yields on 10-year Treasury Bonds affect mortgage rates.
A reasonable person would think rates should come down after 3 decreases totaling 1% in the federal funds lending rate. However, mortgage lenders have resisted lowering rates accordingly.
Experts agree it's a challenge to predict what will happen to mortgage rates in 2025. A person can find persuasive arguments on both sides, though most agree mortgage rates will not return to the 3% range we grew accustomed to during the period of mid-2019 through early 2022. I personally feel anything a range of 5.0 - 5.5 % in 2025 would be a win for consumers.
Housing Inventory
Mortgage rates have reduced the number of buyers in the market causing inventory to soar. Average monthly listings are at their highest levels since 2017.
Average Inventory by Year
Year | Average Inventory | Range |
2024 | 17,957 | 14,451 - 21,593 |
2023 | 13,601 | 11,077 - 16,261 |
2022 | 12,355 | 4,345 - 20,340 |
2021 | 5,924 | 4,293 - 7,649 |
2020 | 10,251 | 7,391 - 13,211 |
(Source: Arizona Regional Multiple Listing Service)
Click here for more history on housing inventory
Price Reductions
This is an interesting category you might not find any other place. It's a really good indicator of market conditions. In a seller's market, homes will sell for more than list/asking price. Conversely, homes will sell for less than list price in a buyer's market.
As a point of reference, homes sold for an average of +$10,100 more than list price in April '22 when we were still in a seller's market and before the effect of increased mortgage rates.
Average Difference Between List and Selling Prices
Year | +/- Asking to Sales Price |
2024 | -$13,519 |
2023 | -$13,604 |
2022 after effects of higher rates | -$12,761 |
2022 before effects of higher rates | +$6,255 |
2021 | +$2,274 |
(Source: Arizona Regional Multiple Listing Service)
Days on Market
Days on Market (DOM) is another way to gauge activity in the housing market. The average time-to-sale in 2024 was 66 days compared to the 64 days in 2023. Note that DOM averaged 32-days in 2021, the year leading up to the rate increases.
Year | Days on Market |
2024 | 66 |
2023 | 64 |
2022 | 40 |
2021 | 32 |
2020 | 50 |
(Source: Arizona Regional Multiple Listing Service)
Additionally, the average home still waiting for an offer has been on the market for 93 days as of this real estate market update .
Click here for more history on DOM.
Distressed Sales
Distressed sales (foreclosures and short sales) are still at historic lows. There were less than 300 total distressed sales in each of the last 4 years. The only year lower was 2006 with 130 total distressed sales.
It would take a substantial increase in distressed properties to have any effect on home prices. There is no better illustration than our own local market in 2009-2011 when foreclosure-type properties made up 60-70% of all homes for sale. 2011 was the bottom of the market when the annual average of homes was $82 per-square foot. Right now, 13 years later, we're at $293.80.
Wishing a happy and prosperous year to all in 2025! Call or text at 602-300-0374 for help with your real estate transactions or for any questions about this real estate market update .
Ron Wilczek has been tracking and writing about the Greater Phoenix Real Estate Market since 2008. He's been a Realtor since 1999 and the broker of Metro Phoenix Homes since 2009. |
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