Phoenix housing market destined for slowdown, experts say
Staff Reports | Digital Free Press
Although Arizona has a better than national average for home values, median sales prices are decreasing slightly into the new year — that’s according to the latest 2023 housing prediction at the Arizona Association of Realtors.
“Arizona’s housing market has been one of the hottest in the country the past couple years. And with mortgage rates dropping slightly and more housing inventory becoming available, we’re starting to see more buyers in the market,” said Eric Gibbs, 2023 Arizona Association of Realtors president and designated broker of Realty One Group Integrity in Tucson.
Phoenix housing market destined for slowdown, experts say
Arizona has approximately a three-month supply of homes, compared to earlier this year when it was more like a three-day supply. In 2023, sellers will need to be more realistic on pricing and the condition of their home for sale.
“I still see low inventory, but the market is shifting to a more even market, one that doesn’t favor a seller or a buyer too heavily,” said Shelley Ostrowski, 2023 Arizona Association of Realtors president-elect and designated broker for Realty One Group Gateway in Yuma.
Economic developers across Arizona continue to attract new and expanding businesses, which will continue to have a positive impact on the housing market, housing experts say.
“I anticipate seeing an uptick in financing options available to buyers,” said Mandy Neat, 2023 Arizona Association of Realtors treasurer and managing broker at Realty One Group in Phoenix. “I would expect that such things as down payment assistance programs and sellers offering creative financing to buyers as they consider their next home purchase.”
There is still a shortage of homes in the market, primarily in the affordable to median price ranges, and housing prices have made a slight correction, so from the buyers’ perspective, there is a real opportunity to find a home you like and to negotiate on the price.
“With interest rates as they are right now, sellers may consider offering incentives to buy down the buyers’ interest rate instead of a price reduction,” says Sindy Ready, 2023 Arizona Association of Realtors first vice president and associate broker with Scottsdale’s RE/MAX Excalibur.
During a recent National Association Realtors webinar, Lawrence Yun, PhD, the organization’s chief economist and senior vice president for research, believes mortgage rates will continue to decrease.
“I think the peak has already occurred and we are on a downward path, but we will not go back down to 3% mortgage rates — I think we will settle down around 5.5% by the end of next year … we will be at 5.5%, but that is clearly an improvement from the 7% we have experienced.”
The impact of the pandemic was felt in a positive way by Hispanic and Black homebuyers, with an increase in home purchases of approximately 2.5% compared to White homebuyers, who saw a 1.2 % increase, according to Vanessa Perry, PhD, Nonresident Fellow, Urban Institute and a Professor of Marketing at George Washington University, during the NAR webinar.
