Slight Slow Down for Arizonaâ€™s Housing Market; Lack of Inventory Easing Up 2023 Predictions from the Arizona Association of REALTORSÂ®
By Justin Liggin -
Monday Dec 19, 2022
Although Arizona has a better than national average for home values, median sales prices are decreasing slightly into the new year.
â€œArizonaâ€™s housing market has been one of the hottest in the country the past couple years. And with mortgage rates dropping slightly and more housing inventory becoming available, weâ€™re starting to see more buyers in the market,â€ said Eric Gibbs, 2023 Arizona Association of REALTORSÂ® president and designated broker of Realty One Group Integrity in Tucson.
Arizona has approximately a three-month supply of homes, compared to earlier this year when it was more like a three-day supply. In 2023, sellers will need to be more realistic on pricing and the condition of their home for sale. Making your home show-ready is important, especially as competition for buyers is decreasing.
According to Shelley Ostrowski, 2023 Arizona Association of REALTORSÂ® president-elect and designated broker for Realty One Group Gateway in Yuma, this means a more stable real estate market going into 2023. â€œI still see low inventory, but the market is shifting to a more even market, one that doesnâ€™t favor a seller or a buyer too heavily.â€
Economic developers across the state continue to attract new and expanding businesses to the state, which will continue to have a positive impact on the housing market. â€œI anticipate seeing an uptick in financing options available to buyers,â€ said Mandy Neat, 2023 Arizona Association of REALTORSÂ® treasurer and managing broker at Realty One Group in Phoenix. â€œI would expect that such things as down payment assistance programs and sellers offering creative financing to buyers as they consider their next home purchase.â€
There is still a shortage of homes in the market, primarily in the affordable to median price ranges, and
housing prices have made a slight correction, so from the buyersâ€™ perspective, there is a real opportunity to find a home you like and to negotiate on the price. â€œWith interest rates as they are right now, sellers may consider offering incentives to buy down the buyers' interest rate instead of a price reduction,â€ says Sindy Ready, 2023 Arizona Association of REALTORS first vice president and associate broker with Scottsdaleâ€™s RE/MAX Excalibur.
During a recent National Association REALTORSÂ® webinar, Lawrence Yun, PhD, the organizationâ€™s chief economist and senior vice president for research, believes mortgage rates will continue to decrease.
â€œI think the peak has already occurred and we are on a downward path, but we will not go back down to 3% mortgage rates - I think we will settle down around 5.5% by the end of next yearâ€¦we will be at 5.5% but that is clearly an improvement from the 7% we have experienced.â€
The impact of the pandemic was felt in a positive way by Hispanic and Black homebuyers, with an increase in home purchases of approximately 2.5% compared to White homebuyers, who saw a 1.2 % increase, according to Vanessa Perry, PhD, Nonresident Fellow, Urban Institute and a Professor of Marketing at George Washington University, during the NAR webinar.
About Arizona REALTORSÂ®
The Arizona Association of REALTORSÂ® (Arizona REALTORSÂ®) represents more than 50,000 members who hold active real estate licenses and subscribe to a strict Code of Ethics and Standards of Practice established by the National Association of REALTORSÂ®. In addition to providing a number of member benefits and services including risk management, education and a legislative voice, Arizona REALTORSÂ® is dedicated to the protection of private property rights for all Arizonans.