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Market Update

Hey guys!

Welcome back to another edition of What’s Up Southeast Valley where we share the real estate news you need when you need it. Each month you’ll find lots of great updates on what’s happening in the real estate market and this month is no exception. 

As we head closer and closer to the holidays, we are starting to see a decline in inventory again. We had a short period of time where demand wained and new listings were coming to the market faster than expected and we thought we might be headed towards a balanced market and in some ways we got there - but at a much lower level of inventory that we had hoped. We are still sitting at about a third of the inventory we would need to be in a true balanced market and until we get there, prices will continue to rise. In fact, prices rose a staggering 4% just over the last month.

While active listing counts are still down by just over 9% year over year, and under contracts are down almost 9% year over year, we’re heading into the third week of November with less than 8,000 homes available on the market when we’d need 25,000-30,000 to hit balance. We know that its tough for our buyers to compete out there and we know that prices rising almost 26% year over year is difficult to swallow, and in many times makes buying simply unaffordable, but our thriving city and continues influx of people and population counts necessitates a reset as to what housing prices will be in Arizona for the long term. While we don’t expect another 26% gain in home prices in 2022, we are expecting them to sit somewhere between 7-10% which certainly isn’t a flat or declining market.

Our sellers are looking for what could change their selling conditions and while inventory is high, we are watching things like increasing interest rates, lack of affordability, potential for slower population growth or household formation but with lending practices opening up to a $625,000 loan limit for conventional financing, Arizona continuing to rank in the top 10 states for population growth due to domestic migration, and the Arizona Department of Economic Opportunity reporting in October that unemployment claims have dropped to a pre-pandemic level and W2 incomes are up 3.4% year over year and rising - it’s unlikely that any of these will create much of downward impact on our real estate market.

This time of year always brings on the speculation about what the housing market will look like in 2021. Numbers are in showing new home sales are down here in the Valley because of the inability of builders to complete home construction (not because of a lack of demand), Zillow has effectively pulled out of the ibuyer market but we likely won’t see much of their inventory come to market locally as much of it will be sold off to bulk buyers and investors looking to build or increase their rental portfolios, and with the average dollar per square foot chart chugging upwards, its clear that passing a peak in frenzy is not the same as hitting the market’s ceiling.

Conditions have certainly changed and whether you bought a home 9 months ago or 20 years ago, unless you are working with an agent who understands the market, knows how to win offers, how to explore all available options for sellers, and provide you with the level of service you deserve when making massive life changing decisions - you will feel challenged,stressed, and may even throw your hands up and miss this opportunity. This is where we shine. The Amy Jones Group is committed to our clients like our family and we will be here to serve through real estate and community for many years to come. C’mon - let’s get started!

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