Are you wondering what's going to happen in the Metro Phoenix housing market? Everybody is! You hear everything, whether it's going to go up, it's going to go down, it's going to go sideways. Well, I'm here to give you a boot on the ground report of what's actually happening in the Metro Phoenix marketplace right now.
Let's get started, first of all, active listings; they plateaued this month. They went from 18,364 last month to 18,655 this month. Basically, no change. So that's good news. So, we have a strong inventory. Still lower than expected as normally we have about 23,000 to 25,000 homes on the market, but 18/19,000 homes are going to give buyers a good selection. Our pending homes have stayed steady too, we went from 8,378 last month to 8,428 pending this month, only about a difference of 50 homes. Again, basically, unchanged.
Between August and September, the market has pretty much stayed the same as far as active and pending listings, but while that's been happening, there has been a shift. The days on the market have increased from about 34 days to about 40 days. They're probably going to inch up to 45 days, maybe even 50 days as we move forward. The homes are selling a little bit slower than they used to. Actually, they're selling a lot slower than they used to. We used to be able to put a home on the market and within a week it was sold. Now as a seller, you can expect anywhere from 4-6 weeks and that could rise going into the future. The median price of homes during all this has gone from 500,000 last month down to 494,000 this month. Is that a big change? Eh, it's 1% roughly. There has been a little give back in terms of the price.
Is that the market crashing? By no means, it's absolutely not. What you need to know is the fast sales are gone. You're not going to sell your home as a seller in a week. You're probably not going to sell it in two weeks. You might but be prepared for a longer ride in a sales environment like we have right now. Number two, the rapid price increases are gone. You're not going to see home prices go up 20% in a year, 30% in a year, things like we saw in the years past. What you're going to see instead, is probably for a while, fairly steady prices, maybe going down a little bit then inching themselves back up. Experts are projecting that prices are going to go up an average of 9% for 2022, about 4% for 2023 and 3.5% in 2024. Prices are not projected to come down and in fact, in reality, they're just fluctuating up and down. So, what you will see though are over exuberant sellers pricing their home higher than they should. As a realtor, three, four months ago, we priced the home maybe 2%, 3% over what a similar home sold for but now what we have to do is we have to price it at the same or maybe 1% above. But if you go 2%-4% above you're going to end up having price reductions. In fact, 40% of the homes in the Metro Phoenix marketplace have seen their prices come down. Have they come down below what they had sold for in the last go around? Not necessarily. Don't confuse price reductions with price falling, they might be starting too high and just ratcheting it down to a more "normal" market price.
Sellers need to plan on it taking longer to sell, similar to 30-60 days. Though, we're starting to see multiple offers again. Does that surprise you? Not me so much and here's why. When the interest rates and home prices began rising people were shocked and needed to take a moment to absorb. Right now, they've seen what's going on. Interest rates haven't come down, home prices haven't come down, they've held steady or gradually gone up. As a result, buyers who were back on the sidelines are sitting here now thinking, we better get back into it, and that's exactly what's happening. I sold three homes this last week, 1 in Sun City, 1 in Sun City West and 1 in Chandler, and all 3 of them had multiple offers. I was representing the Chandler home and the buyers were competing against each other's offers. Does this mean every home is going to have that competition? Not necessarily. Though don't be surprised, buyers have come back into the market and they're more active, so there are plenty of buyers. There are about 210 people a day moving into Metro Phoenix. That's a lot of housing needed and with inventory below its normal level, that means these buyers are going to be sometimes backing up against one another. However, this is the new market that we're dealing with.
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