By Mike Bodeen · 1 January 2024
Real Estate Market Ending on Positive Note
It’s New Year’s day 2024! May it be abundantly blessed for you and yours! (I didn’t intend for that to rhyme, but I like it)
It’s risky and often humbling to take a look back one year ago to see how our prognostications turned out. This last year is no different, but all in all, we did pretty good. Next week we’ll tell you how we did in those 2023 predictions, and then we’ll stick our necks out and look at what we believe 2024 holds for the residential Phoenix Metro Real Estate Market.
First of all, our economic year is ending on the upswing, albeit slight. That our national economy is seeing record stock market highs, lower inflation, and continued low unemployment is a real positive, though many of our citizenry are not feeling the love so much. Locally, our Phoenix Metro economy is strong and growing.
But let’s wrap up 2023.
“2023, though statistically bereft of sales and affordable homes, is nonetheless making a positive turn from the madness of 2021 and 2022.”
INVENTORY: Currently, our inventory of homes for sale is slightly less than last year (15,088 vs 17,076) or about 12% fewer listings. But if we compared it to December of 2021, (5,904) we were a whole lot better than that – a 156% listing increase over 2021. This was good news for some buyers.
DAYS OF INVENTORY (DOI): We currently have 76 DOI on the market. Last year at this time we were registering 72 DOI. But two years ago, inventory was so terribly low that our DOI was just 19. So glad those days are in the rear-view mirror – at least for now.
UNDER CONTRACT: Listings under contract currently total 5,356, compared with 5,922 last year – a 9% drop but a whopping 52% (10,023) drop from two years ago.
SALES: Overall, residential sales (72,661) decreased 16% in 2023 compared to 2022 but really tanked compared to 2021, which saw 110,675 sales at this point – a 34% nosedive. This is causing Realtor and Mortgage professionals (among others) to exit the industry in large numbers. This month and next will be the largest decline of Realtors we’ve seen in many years.
APPRECIATION: 4.8% measured by the Long Term Price Per Square Foot (PSF) per the Cromford Report. This is close to the long-term normal annual appreciation rate.
CROMFORD MARKET INDEX (CMI): 107.6 and Rising (Currently a Balanced Market)
Summing it up, 2023 continued to slow dramatically. Though statistically bereft of sales and affordable homes, our market is nonetheless making a positive turn from the madness of 2021 and 2022. Mortgage rates have dropped from the 8’s to the mid 6% range. Still high but it’s enticing some buyers to get off the bench. There are more homes for buyers to choose from compared to 2021. The Cromford Report shows our market in balance — currently.
And at this point, I’ll leave it at that – balanced for now.
Bring on ’24!!!
Market data referenced in this article comes from The Cromford Report.