January 2020 Market Update
Each month, our brokerage dives into the Phoenix metro real estate data to help us tell the story of the state of the market. Based on this data, my three-key takeaways are:
- The resale home inventory is extremely low! In a given year, we usually have 28,000-30,000 resale homes on the market. This year we had 12,000 at the same time.
- The Phoenix area continues to be one of the fastest-growing in the country.
- While we are still sitting in a strong sellers market, low mortgage interest rates still make 2020 a great time to be a buyer!
Check out the full analysis below and as always, let us know if you have any real estate needs!
Resale home inventory in Greater Phoenix has been shrinking for many months now. Active listings stand at 12,141, down 30% year over year. January’s median sales price stands at $289,500, up 11.1% year over year. Given our falling inventory, home prices are expected to continue to rise, with no signs of slowing. There are plenty of active buyers with the means to buy, driven by Phoenix’s great economic environment. Job growth is strong, wages are up, and Phoenix continues to attract many relocating from other states. In fact, for 2019, Phoenix was the third fastest-growing city in America. (Forbes, 2019)
Interest rates continue to accommodate with 30-year loans at 3.64% with .7 points, and the PMMS (Primary Market Mortgage Survey) is predicting flat rates for the foreseeable future and no Federal Reserve actions on the horizon. Freddie Mac, January 2020
The impact of our very chronic inventory shortage can’t be overstated. The current units available, approximately 12,000 homes, is extremely low by historical standards. Historically, the active inventory for this time of year runs between approximately 28,000-30,000 homes. The last time Phoenix inventory was this low was 2005, when our inventory was about 9,000.
To summarize, sellers are firmly in the driver’s seat, and buyers will have to negotiate and compete very hard to find their dream home.