Analyst calls Phoenix area’s home sales ‘dismal’ and predicts prices will continue to ‘wobble’

Oct 31, 2023, 7:30 AM

A sale balloon is shown next to a property for sale. The Valley’s median home prices fell to $431...

The Valley’s median home prices fell to $431,000 in September from $435,000 in August. (AP File Photo/Jeff Chiu)

(AP File Photo/Jeff Chiu)

PHOENIX — According to data recently released by the Arizona Regional Multiple Listing Service, interest rates have continued to erode the Valley’s median home prices, which fell to $431,000 in September from $435,000 in August.

“As our market trudges through rising mortgage rates and scarce housing supply, September, as well as third quarter closing numbers, report more of the same: dismal transaction volume,” analyst Tom Ruff said in the ARMLS October report.

On Oct. 6, mortgage rates were at 7.81%, the highest rate in 23 years. One year ago, the 30-year mortgage rates were 7.04%, and rates two years ago were at 3.13%.

June’s median sales price of $443,000 is the highest of the year so far and Ruff said he anticipates it will likely be the high-water mark for the year.

“With September’s reported median price and October’s PPI now available, the anticipated ‘wobble’ we referenced is now readily apparent,” Ruff said.

The predicted median home price for October is expected to be $435,000.

The highest monthly median sales price for the Valley was $475,000 in June 2022.

According to Ruff, if his projections are correct, the median sales price will be 0.68% lower year-over-year and down 8.42% from the record high.

Why Valley foreclosure data is misleading

Foreclosures are up 24% year-over-year, but Ruff said it was a statistical exaggeration.

“There were six more foreclosures this September compared to last September, but I have to admit, it’s much more dramatic to say residential foreclosures shot up 24% year-over-year than to say six more,” he said.

He said the myth of a looming foreclosure wave in metro Phoenix is not based in reality.

“Whenever you read these reports, it always appears that foreclosure activity is rising and rising quickly, but this is just not the case,” he said.

Total metro Phoenix home sales take a hit

Sales are also down. In 2021, 79,078 sales were recorded in the first nine months of the year.

In 2022, 67,046 were recorded and in 2023, 56,248 were recorded.

Ruff said sales for the first three quarters ranked 19th out of the 21 years ARMLS has been reporting data.

At the beginning of October there were 6,397 residential listings practically under contract compared to 6,990 year-over-year.

The highest sales volume ever in October occurred in 2020 with 9,690.

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Analyst calls Phoenix area’s home sales ‘dismal’ and predicts prices will continue to ‘wobble’