From significant gains to an anticipated tempering, a lot has happened in the residential real estate market over the course of 2022.
That’s according to a report based on the most recent ARMLS data released by Phoenix REALTORS that outlines the state of the market and where it’s anticipated to go in 2023, a press release stated.
“When we look at where we began — mortgage rates near historic lows, fierce buyer competition, homes selling seemingly faster than it takes to put a sign in the ground — it’s fair to say that the tides have definitely turned, but it may not be as horrible as people think,” said Butch Leiber, recently appointed president of Phoenix REALTORS.
According to the release, the report examined an area that includes Maricopa County and other surrounding communities in Arizona, showing that those conditions with pent-up demand and a shortage of housing supply resulted in soaring sales prices. But as mortgage rates started to rise, there was low housing affordability not seen in decades.
Compared to 2021, home prices were up 15% to $460,000 in 2022, single-family home prices were up 14.3% and townhouse/condo home prices were up 19.6%. But pending sales were down 27% to about 76,500 in 2022, and closed sales were down 23% to about 81,000.
When considering sales price, the number of homes sold in the $500,000+ price range rose 5.5% to about 34,000 units. Comparatively speaking, homes priced in the range of $299,000 or less declined 60% to about 8,600 units.
“Even though there was fluctuation across the board, one area where we saw consistency was how much of the list price was received by sellers,” Leiber said in the release. “On average, 100% asking price was delivered upon sale, which is a year-over-year decline of only 1.3%. This still indicates a pretty strong market despite the fluctuation. Of course, if demand shrinks in 2023, list price received at sale could drop as well.”
In terms of inventory year-over-year, the number of homes available for sale was up 134.9% from 2021 to 22. There were about 17,000 active listings at the end of 2022 compared to 7,258 listings at the end of 2021. However, new listings were down 4.9% to finish the year at 109,915.
“After two years of record-breaking growth, pricing and overall activity, the market ended the year much cooler than it began,” Leiber said in the release. “But that’s not to say the trends we’re seeing nationally will have the same resounding impact locally.”
Looking to what the future may hold for this year, economic headwinds, including inflation, mortgage interest rates and the broader state of the economy, will determine the state of the residential real estate market in 2023.
“Home sales may soften, price growth will moderate and inventory will remain tight. But given Phoenix’s comfortable position as a market still seeing significant economic growth, it’s anticipated that the larger price declines and stresses seen nationally may not have as significant an impact locally.
“Yet in spite of some of the obstacles we’re seeing, sellers and buyers are resilient. To help offset rising costs, some buyers moved from bigger, more expensive cities to smaller, more affordable areas. Others turned to the rental market, where competition and rental prices surged,” Leiber said in the release.