May 2024 Market Update

May 2024 Market Update

  • Renee Merritt
  • 05/20/24

The Phoenix housing market has shown unusual trends recently. Supply has continued to grow over the last month, albeit modestly at 0.6%. Although this growth is seasonally abnormal, supply remains below normal levels. Buyers currently have 37% more homes to choose from compared to last year. However, demand is tempered by 30-year mortgage rates exceeding 7%.

Pending and Closed Sales

There are some encouraging signs. The number of pending listings has increased from the previous month, and the under-contract listings have surpassed 9,000, marking an 8.5% increase month-over-month. Despite this, they are still down 6.3% from the same time last year. April's closed sales count was higher than both the previous month and last year. However, this comparison is skewed as April 2024 had more working days (22) compared to April 2023 (20). When adjusted for working days, closed sales per day actually decreased by 4.7%, from 334 last year to 319 this year.



Pricing Trends

Pricing remains a strong point for sellers. The average square footage of homes sold increased from 1,975 sq. ft. in March to 1,996 sq. ft. in April. The price per square foot is up nearly 10% from last year, and the median sale price has risen by almost 6%. Despite high interest rates, these higher prices have kept demand in check, but the under-contract count has remained relatively resilient.

Buyer Preferences and Market Opportunities

Many buyers are now looking for move-in-ready homes, showing less interest in properties needing significant work. This preference is benefiting new home sales, which remain robust compared to re-sales. This trend presents opportunities for fix-and-flip investors, who might face less competition from iBuyers and institutional investors. They could achieve better gross margins between purchase and sale prices, though rising inflation is driving up renovation costs.

Market Stability and Outlook

Despite fluctuating mortgage rates, the market has held up better than expected. The Cromford® Market Index (CMI) remains just above the balanced zone (90-110), currently standing slightly over 110, indicating a stable market leaning towards sellers. Central areas of the valley maintain an advantage due to tight supply. However, some re-sale markets, particularly Maricopa, Buckeye, and San Tan Valley, favor buyers due to strong competition from new homes.

Looking Ahead

The outlook for May suggests a continuation of these trends. The market's sensitivity to changes in mortgage rates means any significant rate fluctuations could alter the current dynamics. Sellers in central areas can expect continued control due to tight supply, while buyers might find more favorable conditions in areas with higher new home competition.

Key Takeaways

  • Supply Growth: Up 0.6% month-over-month, 37% higher than last year.
  • Demand: Impacted by 30-year mortgage rates over 7%.
  • Pending Listings: Up 8.5% from last month but down 6.3% year-over-year.
  • Closed Sales: Higher than last year, but adjusted for working days, down 4.7%.
  • Prices: Average price per square foot up 10% year-over-year, median sale price up 6%.
  • Buyer Preferences: Increased demand for move-in-ready homes.
  • Market Stability: CMI above 110, indicating a slight seller advantage.
  • Outlook: Continued sensitivity to mortgage rate changes, stable market conditions expected in central areas.

For both buyers and sellers, staying informed about these trends can help navigate the current market more effectively.


We are here to help! If you want to find out how much your home is worth in this strong market, email me at [email protected]. We would be happy to help you determine if the time is right for you to sell your home or buy a new home.


Note: Data courtesy of Cromford Reports.

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