Is Metro Phoenix’s Housing Market Slowdown Over? Here’s why it could be Article originally posted on AZ Central on May 8, 2023 Metro Phoenix’s housing market slowdown could be over, at least for now. Home sales and prices both climbed in March, according to the latest data. And housing analysts aren’t expecting either to have fallen in April. The Valley’s median home price is still down from the high hit last June but ticked up $8,000 in March. Interest rates are still much higher than early last year, but a drop in listings is keeping the market from falling as it did during the second half of 2022. And buyers no longer have the upper hand in 14 of the biggest Phoenix-area cities tracked by the Phoenix-based Cromford Report. “Buyers are watching their homebuying choices drop,” said Tina Tamboer, Cromford senior housing analyst. “Listings are plummeting by like 50 a day now.” She said the drop in supply is stabilizing the market since sales are down from last year’s crazy pace. Valley housing market scorecard Listings across metro Phoenix dropped 7% in March to about 17,000, according to the Arizona Regional Multiple Listing Service. Phoenix-area home sales climbed 33% to 7,417 in March. The median Valley home price increased to $420,000 in March from $412,000 in February. It took an average of 77 days for a metro Phoenix house to sell in March, down five days from the month before. Three areas farther out — Buckeye, Maricopa and Queen Creek — are the only Valley cities to still be buyer’s markets, according to Cromford. Chandler, Glendale, Fountain Hills, Phoenix and Gilbert have the strongest seller’s markets. Metro Phoenix’s housing market quickly shifted to buyers late last summer, and these cities favored buyers then, too, with falling prices and rising supply. Interest rates turn market The market shift happened as mortgage interest rates hit 6% and then increased to 7% in the fall. The 30-year mortgage rate has been hovering around 6.3% this year but ticked up a bit to 6.43% at the end of April, according to Freddie Mac. That’s nearly double the rate from January 2022. Sellers buying down mortgage rates for buyers is keeping the market from slowing more. About 40% of all home sales in early April included seller concessions to buyers, according to Cromford. The average concession was $9,000, which is about what an interest rate buydown costs. Rebound from 2022 slowdown? Pending metro Phoenix home sales and listing trends are signaling the market could be slowly coming back from last year’s cooling. “The balance between supply and demand has been moving consistently in sellers’ favor since mid-November,” said Cromford founder Mike Orr. “This confirms we are in the rebound phase of the correction that dominated the second half of last year and created an atmosphere of fear throughout the market. “That fear can now be replaced with relief as one market signal after another turns positive,” he said. Sales are up but still below last spring’s near-record pace. “When April’s numbers are reported, we expect to see a drop in year-over-year sales volume with month-over-month home prices left unchanged,” said housing analyst Tom Ruff with The Information Market, an Arizona Regional Multiple Listing Service division. “If our models are correct, year-over-year sales volume will be about 20% lower.” Pending sales show the median home price for April should be flat at about $420,000. It hit a record $475,000 in May. Housing market sentiment in the Phoenix area has gone from “panic” last June to “despair” in November and December and then “skepticism” from January through March, according to Cromford. Tamboer said the market started to shift to “hope” in April. It’s not clear yet what the Federal Reserve’s 10th consecutive rate hike last week will do to the new market optimism or mortgage rates.