By Mike Bodeen · 9 January 2023
With the 2022 Phoenix Metro Real Estate market now in the rear-view mirror, (good riddance) we begin 2023 anew. A clean slate. And statistically, that’s actually where we’re at. 2023 brings in a new baseline for us, and overall, it’s a good way to start the new year.
But first let’s finish out 2022. We offer the ARMLS numbers for December 2022 vs 2023:
Active Listings: 16,298 vs 5,776 last year – up 182% – but down 14.9% from 19,155 last month
Under Contract Listings: 5,456 vs 9,393 last year – down 41.9% – and down 14.1% from 6,352 last month
Monthly Sales: 5,132 vs 9,265 last year – down 44.6% – but up 4.1% from 4,931 last month
Monthly Average Sales Price per Sq. Ft.: $266 versus $268 last year – down 0.9% – and down 2.5% from $272.30 last month
Monthly Median Sales Price: $410,000 versus $425,000 last year – down 3.5% – and down 2.4% from $420,000 last month
We ended 2022 with sales activity being slow, way down. January and February may provide us with some direction in the new year, but so much is predicated on mortgage rates, which have remained in the mid 6% range for a number of weeks now. Continuing to stay in the 6% range will begin to build some confidence in the market.
As some of you may recall, last week I indicated that the 5% to 6% range could be the new normal, and to be honest, going forward, it’s probably healthiest to be in that range. Why? Because the ultra-low 3%-4% range will re-ignite buyer frenzy. Unwelcome back, multiple offers, bidding wars, spiking prices. “Yea,” you say, “but the higher mortgage rates hurt the first-time and lower income borrower-buyers.” True, but it will be far worse to see our values soar again, eliminating them from the market altogether. A slower and consistent annual appreciation rate of 4-5% with mortgage rates in the 5% to 6% range will stabilize us in a healthy way.
As another indicator of our new baseline, as reported last week, our market, per the Cromford Market Index (CMI), has risen to a statistical balance – “100.” This means that there is an equal amount of buyers and sellers. The issue of why the market is so stone-cold dead is because demand is so low. Monthly sales are down almost 45% from one year ago. Sales under-contract are down 42% from last year. We’re currently lacking buyers and sellers.
The correct word to use for our overall market is correction, not crashing. And we may have finished correcting. In fact, the monthly average sales price is down less than 1% from one year ago.
As we said last week, 2022 started as a continuation of 2021, a barn-burner in heated prices. Halfway into the year, the market reversed itself and came back down to earth to make 2022 a wash.
So here we are. A fresh start to a new year. In the immortal words of Dickens’ Tiny Tim in the classic A Christmas Carol, “God bless us, every one.”
2023 Home Design Trends
Sintered Stone Countertops – Better than Quartz?
On the lighter side, we bring you the latest and greatest in 2023 home design trends from the National Association of Realtors (NAR) recent magazine. My interest was piqued with the new type of countertops that have been hitting the market:
Every few years, a new countertop surface takes center stage as the best in terms of durability, sustainability, color or novelty. The latest “it” surfaces are newer “sintered” stones, a combination of minerals that form a solid surface that can’t be etched, scratched, burned or stained. Dekton and Neolith appeal because they resemble marble and other high-end surfaces and are resistant to fading, says Boston designer Jodi Swartz of KitchenVisions. Milwaukee designer Suzan Wemlinger adds that because the slabs are large, there’s less need for seams, and they can be used in outdoor kitchens without cracking in extreme temperatures.
Prices quoted 6 months ago range from $60 to $100 per square foot. To read the full article, Click Here.
Market data referenced in this article comes from The Cromford Report.