This report is compiled monthly with data taken from the Arizona Regional MLS and is intended to give our readers an understanding of the Phoenix Area Housing Market. We also have a 10-City Report each month. It's a factual report, and any opinions stated are only our opinions.
UPDATE: Since this post on 9/6/2024, the prime lending rate was reduced 1/2%. Check back in October to see how that affects the market.
This post will focus on the areas of:
total sales
price per-square foot of the Greater Phoenix Area
list vs sales prices
total active homes for sale
Federal Reserve interest rate manipulation
time on market
impact of distressed properties (bank properties and short sales)
We believe we're still in a buyer's market based on higher inventory, lower home sales, and a -$14,844 gap between listing and sales prices. Details follow below.
Home Sales
Home sales peaked in May this year. They normally peak in May or June, which is a cyclical pattern. Home sales have greatly decreased since interest rates began increasing in March of 2022. To see longer term detail, click on our Monthly Sales Chart.
As a point of reference, monthly home sales averaged 9,260 in the 12-months before interest rates started increasing in March of 2022.
Month | Home Sales |
|---|---|
August '24 | 5,730 |
July '24 | 6,201 |
June '24 | 6,330 |
May '24 | 7,599 |
April '24 | 7,048 |
March '24 | 6,756 |
August's sales are:
- 471 less than July's
- 483 less than August 2023
77% of the 3 year average of 7,456
Price-Per Square Foot (PPSF)
Price-per square foot is an ideal measure of home value because it takes into consideration the size of sold homes. Median price does not.
PPSF across the entire Arizona Regional MLS reached a high of $303.46 in May '22. Increasing interest rates drove buyers out of the market. Subsequently, prices dropped $38.76 to a low of $264.70 in December of '22.
Prices started to rise again in January of '23 despite interest rates continuing to increase through the end of July '23. Unexpectedly and briefly, prices jumped to a new high of $306.66 in April '24 before settling back to $290.57 in August. Click here for a longer-term Price History.
Month | Price-Per Square Foot |
|---|---|
August '24 | $290.57 |
July '24 | $284.45 |
June '24 | $295.29 |
May '24 | $296.71 |
April '24 | $306.66 |
March '24 | $294.19 |
August's PPSF is:
+$6.12 more than July
+$7.73 more than August 2023
103% of the 2023 average of $282.15
List vs Sales Price
This is an interesting category of price 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 were selling for +$10,100 more than list price in April '22 when we were still in a seller's market.
This table also shows the price range of $300K - $600K because it generally accounts for 60% of all sales. It's a contrast to all sales within the Greater Phoenix Area.
+/- Difference Between List & Sales Price
Month | $300K - $600K | All Sales |
|---|---|---|
Aug '24 | -$5,906 | -$13,109 |
Jul '24 | -$4,988 | -$13,856 |
Jun '24 | -$5,585 | -$13,745 |
May '24 | -$5,336 | -$12,982 |
Apr '24 | -$5,163 | -$13,350 |
Mar '24 | -$5,486 | -$12,359 |
Feb '24 | -$6,163 | -$12,136 |
Jan '24 | -$7,174 | -$14,844 |
Inventory
This category details the number of active listings to begin each month. A greater number of listings provides buyers more choices and generally keeps prices from rising too fast. A lower number of listings leaves buyer's with less choices and greater competition for homes. This leads to faster rises in home prices. View our longer-term chart for Days on Market.
Interest rate hikes began in March '22 and started affecting inventory by April '22
Time Period | AVG Monthly Listings |
|---|---|
Apr '21 - Mar '22 (prior to hikes) | 5,832 |
Apr '22 - Mar '23 | 15,017 |
Apr '23 - Mar '24 | 13,593 |
Apr '24 - current | 17,700 |
Here are the listings to begin the last 6-months:
Month | Active Listings |
|---|---|
September | 18,491 |
August '24 | 17,704 |
July '24 | 18,044 |
June '24 | 17,568 |
May '24 | 17,368 |
April '24 | 17,205 |
Federal Reserve Interest Rate Changes
The dramatic change from a seller's market to a buyer's market began when the Federal Reserve (The Fed) increased interest rates to combat inflation. To date there have been 11 rate increases. They stopped raising rates after the July 26, 2023 increase.
.25% in March '22
.50% in May '22(which was the largest since 2000)
.75% on June '22 (the largest increase since 1994)
.75% on July '22
.75% on September '22
.75% on November '22
.50% on December '22
.25% on February '23
.25% on March '23
.25% on May '23
.25% on July '23
That’s 5.25% over 11 increases in about 20-months. The Fed is expected to reduce rates between .50% and 1.00% to finish 2024 because inflation is under control and they want to avoid a full recession. We should also consider that this is an election year.
Days on Market
This is another indicator of where the market stands. Low time to sale generally happens in a seller's market and higher days generally happen in a buyer's market. Before the interest rate increases we were in a seller's market, and it took about 30-days from listing a home to when it sold. Access our longer term chart for Days on Market.
Month | Days to Sale |
|---|---|
August '24 | 68 |
July '24 | 63 |
June '24 | 63 |
May '24 | 62 |
April '24 | 62 |
March '24 | 63 |
Distressed Properties
Distressed properties are bank owned homes and short sales. They disappear when mortgage companies maintain strict lending policies, they don't provide borrowers with risky loans, and homeowners make enough money to pay their mortgages.
Distressed properties have been a non-factor for a long time. Click here for our longer-term chart on Distressed Sales. Here are a couple quick facts:
they peaked in March of 2009 at 75.9% of total sales
went under 50% of total sales in March 2012
went under 25% of total sales in April 2013
went under 10% in February 2015
stayed under 1% since February 2020
Month | Distressed Property Sales |
|---|---|
August '24 | 22 |
July '24 | 26 |
June '24 | 18 |
May '24 | 23 |
April '24 | 24 |
March '24 | 31 |
Ron Wilczek has been tracking and writing about 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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