The Arizona housing market is hot, with high demand and low inventory driving up home prices. In this blog post, we'll explore the latest data and trends from Redfin's housing market update, and what they mean for realtors and homebuyers in Arizona. We'll cover topics such as the impact of COVID-19 pandemic and mortgage rates, remote work driving people to more affordable areas like Arizona, new home construction slowdown due to shortage of construction materials, and the importance of staying informed about market conditions.
Facts and Figures:
*The past week showed a decline in mortgage rates for the fourth consecutive week with the average 30-year fixed rate dropping to 6.28%. However, mortgage-purchase applications for the week ending March 31st declined by 4% from the previous week, while being up by 8% from a month earlier and down by 35% from a year earlier. In contrast, Redfin's Homebuyer Demand Index, which measures requests for home tours and other home-buying services from Redfin agents, reached its highest level since September for the week ending April 2, up by 6% from a month earlier but down by 23% from a year earlier. While Google searches for "homes for sale" were up by 44% from the trough they hit in December during the week ending April 1, they were down by about 20% from a year earlier. As of April 1, touring activity was up by 20% compared to the start of the year, whereas last year it had increased by 25% at the same time according to home tour technology company, ShowingTime.
*In recent data from Redfin’s monthly dataset, home prices have decreased annually for seven consecutive weeks, with the median home sale price at $361,796, down 2.1% from a year earlier. Pending home sales and new listings have also dropped significantly year over year, with declines of 18.9% and 21.8%, respectively. Active listings increased by 12.3% from a year earlier, the smallest increase in five months, and months of supply decreased to 2.8 months. However, 47% of homes that went under contract had an accepted offer within the first two weeks, and 27% of homes sold above their final list price. Despite this, the median time homes spent on the market increased to 39 days, up from 23 days a year earlier.
Impact of COVID-19 Pandemic and Mortgage Rates:
The COVID-19 pandemic has had a significant impact on the housing market, with more people looking for bigger homes and more space to accommodate remote work and distance learning. This has led to a surge in demand for single-family homes, particularly in suburban and rural areas. Low mortgage rates early on in the pandemic served to drive demand even further upward.
Remote Work Driving People to Arizona:
One of the biggest trends in the Arizona housing market is the influx of people from other states, particularly California, looking for more affordable areas to live and work. The rise of remote work has made it possible for people to move to Arizona while still working for companies based in other states. This has led to a surge in demand for homes in cities like Phoenix, Tucson, and Flagstaff, as well as rural areas with lower home prices.
Low Inventory and Fast Market:
Despite the surge in demand, the Arizona housing market is facing a shortage of inventory, particularly for single-family homes. According to Redfin's data, new listings of homes for sale in Arizona decreased by 12.3% in March 2023 compared to March 2022, while the number of homes sold increased by 2.7%. This has led to a fast market, with homes selling quickly and often for more than the asking price.
New Home Construction Slowdown:
Another factor contributing to the low inventory in the Arizona housing market is the slowdown in new home construction. The shortage of construction materials and labor has led to delays and higher costs for builders, making it harder to build new homes. This has created a situation where demand for new homes is high, but supply is limited, driving up prices even further.
Staying Informed and Working with Trusted Realtors:
Given the fast-paced and competitive nature of the Arizona housing market, it's crucial for realtors and homebuyers to stay informed about market conditions and work with trusted and experienced realtors. Realtors can provide valuable insights and guidance to their clients, including information on property taxes, school districts, and local amenities. Leveraging technology and expertise can help realtors find the best properties for their clients, navigate the buying process with confidence, and negotiate the best possible deal for homebuyers.
Conclusion:
The Arizona housing market is experiencing high demand, low inventory, and a fast market, driven by factors such as the COVID-19 pandemic, rising mortgage rates, remote work, and new home construction slowdown. Staying informed and working with trusted realtors is essential for navigating this competitive market and finding the best possible home for your needs. By staying on top of the latest trends and leveraging technology and expertise, you can make the most of the opportunities available in the Arizona housing market.
*Redfin. (n.d.). Arizona Housing Market. Retrieved April 4, 2023, from https://www.redfin.com/news/housing-market-update-scarce-new-listings-fast-market/