Skip to main content

Metro Phoenix Home Prices Rising Again; Market Crash Forecast Debunked

By March 3, 2023No Comments

By Catherine Reagor | Arizona Republic

Metro Phoenix home prices are expected to climb after sliding since late summer.

Already, most cities in the Valley have shifted back toward seller’s markets.

The median home price in the Phoenix area is projected to climb to $415,000 in February based on pending sales, according to the Arizona Regional Multiple Listing Service. That’s up from $410,000 in January.

An uptick in home prices was expected because big events, including the Super Bowl and Phoenix Open, drew visitors and potential homebuyers to the area in February.

But interest rates are ticking back up. Higher mortgage costs have hit some potential homebuyers hard since they started climbing in May.

A repeat of the last crash isn’t expected, and Arizona-based housing analysts are critical of a report from a Wall Street firm saying that’s going to happen in metro Phoenix.

“If mortgage rates were to spike upwards beyond 7%, I would expect further price declines,” said Tom Ruff with The Information Market, a division of ARMLS. “But nothing even remotely close to 2008.”

Sales contracts are picking up; few buyer’s markets

Metro Phoenix’s median sales price has fallen 13.68% from May 2022’s record of $475,000, according to ARMLS.

The Valley’s home prices plummeted by more than half between 2008 and 2011.

Phoenix area home sales fell about 14% to 4,265 in January from 4,985 in December, but houses under contract to sell started picking back up in February.

The number of homes listed for sale was down 1.6% in January to 18,688 from December, which helps the market since home sales are down. The combo keeps the market from becoming oversupplied.

It took an average of 80 days to sell a house in January, more than double the time it took during the red-hot housing market of January 2022.

Of metro Phoenix’s 17 biggest cities, only four — Goodyear, Queen Creek, Buckeye and Maricopa — are still buyer’s markets, according to the Cromford Report, which tracks the region’s housing market. But they are shifting to more balanced markets than in December.

The average rate for a 30-year mortgage is 6.32%. That’s almost double the interest rate from a year ago but down from the 7.1% rates hit last November.

Read more (subscriber content)
Some stories may only appear as partial reprints because of publisher restrictions.