Greater Phoenix Housing Market Update from Shawn with Coldwell Banker Realty

Good evening,

As I stated in my mid-September update, I was seeing buyer traffic pick up, and wow, the September numbers certainly reflect that! What an improvement in under-contract/pending sales, best seen in the last five months! Read below for more info…..

Market Summary for the Beginning of October

Here are the basics – the ARMLS numbers for October 1, 2024 compared with October 1, 2023 for all areas & types:

Active Listings: 19,643 versus 13,404 last year – up 47% – and up 6.6% from 18,430 last month
Under Contract Listings: 7,261 versus 6,499 last year – up 11.7% – and up 9.1% from 6,658 last month
Monthly Sales: 5,447 versus 5,573 last year – down 2.3% – and down 4.9% from 5,730 last month
Monthly Average Sales Price per Sq. Ft.: $284.46 versus $285.28 last year – down 0.3% – and down 2.1% from $290.53 last month
Monthly Median Sales Price: $442,000 versus $432,000 last year – up 2.3% – and up 0.5%from $440,000 last month

At last we can see some signs of life in the re-sale housing market after an extended period in limbo. Reaction to the lower mortgage rates that have emerged since July has been slow in coming but is now detectable. Under contract listings went up over 9% during the course of September and are almost 12% higher than this time last year.

Sales volumes during September remained painfully low, but the housing market does not turn on a dime. We should start to see better closing numbers during October as long as the under contract counts keep improving.

Pricing fell back again after a short term increase during August. In fact the average $/SF is very slightly lower than it was a year ago. However the median sales price is up 2.3% from last year, so there is no need for despair. Pricing is very stable.

Re-sale supply is increasing, as it usually does between August and November, so the extra demand is being exceeded by extra supply. This means we can expect the CMI to drift lower for another month and buyers will continue to have favorable negotiating power. If supply starts to fall sometime in November, which we would normally expect. then we can reasonably expect the CMI trend to reverse and move higher again by the end of 2024, which would indicate balance.

The contract ratio has edged up very slightly from 36.1 to 37 over the course of September. Both figures represent a balanced market, but edging up is better than drifting down. If we are going to see significantly more favorable conditions for sellers, then look for this number to reach 45. This is where we stood last June. This will likely happen into next year the spring season, which starts in March. Now, until January, it is a good time for buyers to get a better deal before the competition begins. Demand will outdo supply by spring into summer, especially if interest rates are at 6%.