That title bears some responsibility when it comes to making predictions on such a large moving target, but the goal here is to give some guidance for what we *think* will happen.
Let’s take a look at the year that was in Phoenix Real Estate… a year of highs and lows. Many thought we would see a crash with prices plummeting, but prices actually declined more in the 4th quarter of 2022 and then increased in 2023 overall. We have seen pricing remain fairly flat over the past couple of months with sellers holding out hope for the spring time push. Mortgage Interest Rates reached 20-year highs later in the year, touching 8% which kept would be buyers on the sidelines. For the lows, it was transactional activity… the number of closings (home sales) throughout the valley was the lowest on record since 2008 when the whole economy fell off a cliff. Compared to 2022, we were down 16% and over 36% from 2021, when we had the highest number of sales reported.
Average Days on Market rose to 64 from 36 the year prior and average sales price barely dropped to $580,508
The rental market saw a large increase in inventory with 4,037 Active rentals (year or longer) with another 2,250 short-term/vacation rentals on top. Pricing for rentals dropped 8-10% in many parts of town.
There is optimism heading into the new year. Mortgage Interest Rates have been on the decline for nearly 2 months and most conventional under 7% again with the FHA/VA even better. Many speculate rates will continue their downward trend and be another percent lower by end of summer. We shall see.
I expect decent activity this first half of the year with buyers understanding that as rates decrease, the competition increases, which means less opportunities to negotiate for seller concessions or repairs being made.
Drive around almost anywhere and you will see plenty of new construction coming out of the ground… bungalow rentals, apartment complexes, new homes, industrial warehouses, you name it. We need the housing stock and there can be some great incentives; HOWEVER, please let us get you properly registered BEFORE you visit the community in person. It’s very important to have outside representation when buying new (and the Builder pays us).
Election years tend to bring some uncertainty with them, especially toward the end of summer and I would expect no different this time around. Some will choose to not make any major purchases until after November, but that can backfire also.
Bold predictions claim as much as a 30% reduction in Realtors this year. I don’t believe the figure will be that high, but there are too many Realtors here. In fact, we have more per capita than anywhere else in the country. Think about it this way, there were a little over 62,000 closed sales last year for 41,000 Realtors locally. You can do that math and when knowing some sell far more than average (like us), it’s hard to make a living.
As I scrolled social media feeds around the holidays, I noticed so many people wanting to focus more on helping others, personal health targets and reviving their spirituality. That’s a good thing. For me, I am working to find true happiness & inner peace on a daily basis. The accolades don’t matter so much any more… it’s the time spent, relationships cultivated and conversation had.
Whatever is in your sights, I hope 2024 turns into a phenomenal year! If you’re in need of some real estate advice, that’s what we do.