Market Update July 2023

Last summer, our market shifted dramatically when interest rates rose steeply and removed demand from institutional buyers and ordinary buyers. A year later, we are still seeing interest rates around 7%, but the market has been steadily recovering. The median sales price has been rising for the past 5 months in a row and is now at $443,000. That’s an increase of 7.1% from the low point of January 2023. 

Keep in mind, those are the closed sales prices, which do not take into account any credits that the seller pays towards buyer’s loan costs or repairs negotiations. Looking at the chart below, you can see the percent of closings that have had seller-paid closing costs in the past 30 days. In the lower price ranges, there are fewer listings and more buyers, reducing the need for concessions. As you get into the median price range, you’ll see about 50% of the sales include concessions. In the price range, it’s typical to see $8,500-$10,000 in closing costs paid by the seller.  

The story of 2023 continues to be low demand, with even lower supply. In Phoenix, there are currently 1,562 active listings, compared to last year’s high count of 3,812 active listings in October. Homeowners with low, fixed-rates mortgages are hesitant to sell, knowing that a new home typically comes with a new mortgage at today’s rates. With fewer homeowners opting to sell, new construction homes are the strongest sector in our housing market right now. However if interest rates were to fall to 6% or below, we could see a sharp increase in demand and an improvement in supply too. 

One final note… If you have heard headlines about an upcoming foreclosure crisis, take a look at this chart. Pending foreclosures have been in decline for about 3 months and are back to the level of last summer, with just under 1,000 foreclosures pending. For comparison, the second chart includes the height of our foreclosure crisis in 2009, where we had over 50,000 foreclosures pending. 

Regardless of the overall market stats, we take a personalized approach to your home. The best way to know your current value is to schedule an in-home consultation. There’s no pressure or obligation, so if you are considering selling now or anytime in the next year, call Locality Homes to discuss your options, specific comps for your property, and what you should focus on to get your home sold for top-dollar. 

All data (and some commentary) provided by The Cromford Report.