What we are seeing that indicates the market is slowing or becoming more “balanced”: Sellers are starting to offer concessions to buyers, median days on market have moved up, months of supply has increased to the level of May 2020, and price reductions are up 254% in the last 10 weeks.
Buydowns are becoming more common where the seller may offer to pay the buyer points costs to get a lower rate. This could become part of a strategy for a seller instead of a price reduction to get a stale property sold.
The average consumer today will be in the high-5%’s to mid-6%’s on a 30 Year Fixed Mortgage before any interest rate buydown.
Cromford is reporting that over the last 10 weeks, there has been a surge of new listings in every price point over $400K, pushing the supply level up 113% over this time last year. The surge in new listings is not happening under $400K, however rising interest rates have caused demand in this price range to decline. As a result, supply is rising on the low-end due to buyers pulling back, not excessive new listings.
According to The Cromford Report, the cities with most expensive price per square foot are:
• $549.71 – Paradise Valley
• $372.07 – Scottsdale
• $337.12 – Carefree
• $298.31 – Rio Verde
• $295.03 – Fountain Hills
The current range of price per square foot is typically between $225 to $500 per square foot in the Phoenix metropolitan area. Nowadays, it is impossible to buy or build a home for $100 or less per square foot in the Valley.
One city that has outstanding growth and is projected to continue to see a substantial rise in pricing is Queen Creek. Despite being on the more affordable side with an average of about $200 per square foot, this booming city has seen an over 30 percent increase in price in comparison to last year.
According to The Cromford Report, Arizona cities that are on the affordable end of the spectrum include:
• $180.66 – Sun City
• $179.34 – Avondale
• $178.97 – Tonopah
CoreLogic’s Single-family Rent Index showed that rents experienced their thirteenth consecutive month of record-breaking annual gains in April. Single-family rent prices were up by 14% year over year, with pricing pressure coming from a shortage of rental properties on the market. April’s rent price growth was more than double the increase that was reported in April 2021 and more than six times higher than the growth seen in April 2020.