Slight Slow Down for Arizona’s Housing Market; Lack of Inventory Easing Up 2023 Predictions from the Arizona Association of REALTORS®
(PHOENIX – Dec. 19, 2022) – Although Arizona has a better than national average for home values, median sales prices are decreasing slightly into the new year.
“Arizona’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, we’re starting to see more buyers in the market,” said Eric Gibbs, 2023 Arizona Association of REALTORS® 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 REALTORS® president-elect and designated broker for Realty One Group Gateway in Yuma, this means a more stable real estate market going into 2023. “I still see low inventory, but the market is shifting to a more even market, one that doesn’t favor a seller or a buyer too heavily.”
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. “I anticipate seeing an uptick in financing options available to buyers,” said Mandy Neat, 2023 Arizona Association of REALTORS® treasurer and managing broker at Realty One Group in Phoenix. “I would expect that such things as down payment assistance programs and sellers offering creative financing to buyers as they consider their next home purchase.”
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 buyers’ perspective, there is a real opportunity to find a home you like and to negotiate on the price. “With interest rates as they are right now, sellers may consider offering incentives to buy down the buyers’ interest rate instead of a price reduction,” says Sindy Ready, 2023 Arizona Association of REALTORS first vice president and associate broker with Scottsdale’s RE/MAX Excalibur.
During a recent National Association REALTORS® webinar, Lawrence Yun, PhD, the organization’s chief economist and senior vice president for research, believes mortgage rates will continue to decrease.
“I 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 year…we will be at 5.5% but that is clearly an improvement from the 7% we have experienced.”
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 REALTORS®
The Arizona Association of REALTORS® (Arizona REALTORS®) 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 REALTORS®. In addition to providing a number of member benefits and services including risk management, education and a legislative voice, Arizona REALTORS® is dedicated to the protection of private property rights for all Arizonans.
