Here’s a quick update for the Phoenix area real estate market.
The Phoenix real estate market has started to cool, just like the temperature. This is still a good market for sellers, and it’s getting better for buyers. I’ll show you how the market from six months ago compares to today.
Inventory has increased by 92% from 3,600 homes to over 7,000 homes. In that same time period, the number of homes going under contract dropped by 9% from 12,000 to 11,000 homes. The median days on market increased from five days to 11 days. The sales-to-list price ratio dropped from 102% to 100.3%. The number of sales over asking price decreased from 60% to 47%, so we’re starting to see a shift. When prices are above list price, they have decreased from an average of $20,000 to about $11,000.
There are three types of buyers in Maricopa County. Traditional buyers include first-time and resale buyers. Over the last year, the number of traditional buyers in the market has decreased from 85% to 73% because of the influx of iBuyers and investors.
iBuyers like Zillow, Opendoor, and Offerpad focus on buying homes from sellers who don’t want to go through the traditional method, but that is starting to change. Zillow stopped buying homes across the U.S. last week because they were no longer seeing a good return on investment. I think this will have a big effect on the market and iBuyers may not be dominant in the market much longer.
The third type of buyer is the institutional buyer. These are companies that are buying thousands of homes and holding them for the long term as rentals.
Collectively, iBuyers bought 2,775 homes. That has led to the increasing supply of homes. About 10% of the homes in the MLS are owned by iBuyers. 22% of those iBuyer homes were purchased by institutional buyers. We should start seeing mellowing prices and market correction. In 2022, we’ll still have appreciation, but it won’t be as high as this year.
I hope this information is helpful. If you have any questions, please reach out to me at 602-430-5226. I am always willing to help.