By Holly Henbest, Realtor
If you read or listen to the news, you’ll hear a lot about how the real estate market is down, interest rates high, and a lot of drama regarding the status of the real estate market. While data and information regarding our nation can be interesting, it’s important to note that real estate news should really be analyzed by neighborhoods, as each neighborhood is different.
Along those lines, Arizona, in general, is also really different from most of our country. First and foremost, we are a destination state. Our weather and cost of living attracts buyers from several categories including our famous snowbirds. Beyond that, Arizona has universities, professional sports teams, hosts major events like The Phoenix Open, Superbowl, and upcoming NCAA Final Four in 2024, so we continuously have Arizona on televisions across the country, showcasing our sunny year-round lifestyle.
We’ve also seen a nice influx of corporations, which has brought tremendous relocation buyers. Arizona is known as the best state to house technical support, call centers, and IT because of our lack of natural disasters. Many corporations keep their IT back-up systems housed in Arizona.
While 2023 will likely be known as “The year of increased interest rates, low inventory, and decreased sales” – we should all feel confident about our decision to invest in real estate in Arizona because Arizona remains a strong overall real estate market.
Let’s look at some Maricopa County data:
On October 1, 2023, vs. October 1, 2022:
• Active Listings: 15,247 versus 20,582 last year – down 26%
• Under Contract Listings: 6,028 versus 6,578 last year – down 8.4%
October 2023 vs. October 2022
• There were 5,543 closed transactions, down 8% from 6,019 in October 2022
• There were 1,480 closed new homes, up 5% from 1,410 in October 2022
• There were 4,063 closed re-sale transactions, down 12% from 4,609 in October 2022
• The overall median sales price in October 2023 was $470,000, unchanged from October 2022
As you review this data, you’ll notice that the biggest change in real estate is the volume of transactions and pricing is basically flat. We’ve seen pricing go up in some places and down in others and that is why evaluating by neighborhood is important. In our area we’ve seen prices fluctuate between flat and increased.
Other examples include – Arizona City, Sun City West, Sun City, Tonopah, Queen Creek, Avondale, Florence, and Surprise have seen the largest declines in their average price per square foot, down more than 5%. However, Paradise Valley has moved in a positive price direction with a 12.7% increase over the past 12 months. Scottsdale has also moved slightly higher by 1.3%.
While interest rates have impacted buyers’ affordability, another bonus about Arizona is the volume of cash buyers. Personally, we’ve done more cash transactions this year than those with mortgage loans. We’ve been a cash rich real estate market. Overall, these cash buyers not only bring us qualified buyers, but they also build market stability since they have 100% equity in the homes they purchase.
As we get closer to the end of 2023, I wish I had a crystal ball to predict what the real estate landscape will look like in 2024. Although I can’t say anything for sure, there do seem to be indicators that interest rates will come down. Typically, they come down during an election year and reports indicate that inflation is under control, and we’ve already seen a little movement down. Whether it’s sooner or later, when interest rates get closer to 5%, I do predict a surge of buyer activity.
If you have questions about your neighborhood, please reach out and we’d be happy to supply you with current data regarding your area.
*Data From The Cromford Report
Holly has been a Desert Ridge resident since 2000 and has been a Realtor since 2006. She is the leader of The Henbest Team with Realty One Group. Holly is ranked in the top ½ of 1 percent of Realtors in Arizona and is a certified luxury marketing expert. She has been ranked #24 in the Top 50 Realtors by the “Phoenix Business Journal” for the past several years and recognized by “So Scottsdale!” magazine as a Real Estate Superstar for 2019, 2020 and 2021. She’s also been the #1 ranked realtor at Realty One Group/North Scottsdale for the past several years. Learn more at henbest.com.
