How Is the Real Estate Market Right Now?

By Rebecca Durfey

Rebecca Durfey brings over 20 years of experience in real estate transactions within Maricopa County. Despite managing multiple clients simultaneously, her primary focus is to provide a personalized experience that makes you feel like her sole priority. Rebecca and her team are dedicated to efficiently achieving the desired outcomes for each client they serve.

“How is the housing market right now?” It’s a question I am asked daily, and I understand why. The housing market in Arizona has been stubborn and difficult for sellers and for buyers over the past almost three years. May of 2022 was the last time we saw low interest rates for buyers and a high number of purchase contracts for sellers. Spring tends to be a time of year when people start to map out changes in locations, sometimes in state and sometimes out of state, which means, in many cases, a home needs to be sold and a home needs to be purchased. It is difficult to know what you should do when the housing market is not cooperating with expectation. Our market can be summed up in one word: Stable. While the red-hot market of the pandemic is behind us, the data is not saying that we are heading for a deep or “serious” correction, either. Instead, things are balancing out. Here are three things you need to know about our more stable housing market:

1. Competition is increasing. There are significantly more homes on the market than there have been in many years. Demand is not declining. Demand is not increasing significantly, either, but it has been consistent. However, having more inventory means more options for buyers. Buyers have been dealing with low inventory for years and now there are many options to choose from. A few years ago, I could only find a total of four or five homes that met clients’ criteria because there were so few homes on the market that were not snatched up immediately. Demand was high and inventory was low. The high inventory numbers today may be a good reason to start your home search. Interest rates are still higher than many home owners are used to, but your negotiating leverage has not been this good in a very long time. Meanwhile, our sellers are having to reset expectations about how long it will take to sell a home. I remember times where it was not uncommon to quote 90 to 120 days on market. Sellers got so used to the one-week or two weeks on the market prior to 2022, that it’s been very difficult for them to recalibrate the thought that even great homes don’t always sell in the first few months. We DO want homes to sell sooner than later, but 90 days is not at all uncommon anymore. I still believe it’s always worth selling if it makes sense for your circumstances, but important to plan out that the homes are not moving like they did a few years ago.

2. Prices are increasing slightly. In Maricopa County, the prices are going up slightly – and it depends on where you live and what price point you are in. Our luxury market missed the memo on how slow things have been. Luxury is still doing well – although the buyers are pretty bold on their offers being well below asking price – but our other more typical price points are only slightly increasing year over year. In some cases, it’s by a percent, but most often we are seeing a 2 and 3% increase year over year. You can get all kinds of headlines on who thinks prices will do what, but I will stick with Gary Keller, one of the smartest housing market predictors I know, and expect that the prices will continue to increase by the 3 or so percent in 2025 and possibly 2026, but making more of a rebound in 2027. If there is one state to buck the predictions and do better than expected, though, I do believe that is Arizona. We have strong infrastructure, employment and economy, so we will see if we can do better than predicted. In the meantime, sellers will want to be careful about not overpricing their properties. Prices are increasing, but buyers are savvy enough to know when a property isn’t worth what a seller is asking. Buyers also want to make sure they are going to be building equity as soon possible.

3. Condition matters. Right now, there is a large gap between homes that need a little work and homes that are in pristine condition. I use the quote of my favorite market analyst, Tina, when I say “You have to be the prettiest girl at the dance.” It doesn’t matter if there are a lot of “pretty girls,” you will want to be the best. We want homes to be clean, maintained, available, and at the “right” price. Even if it’s priced a little higher, we want to have the condition justify the price. That is the only way we are seeing homes get a top-dollar in comparison to comparable properties. Those homes that need work also stay on the market longer. Buyers are already dealing with high interest rates and higher home prices, so they are very cautious about having to put out any extra cost for repairs after closing. I hear it over and over from buyers that they are nervous about this market and the affordability. Buyers want to be sure they are not blindsided by additional costs of updates, upgrades or repairs.

These are general points based on what I am seeing in our housing market in Maricopa County. However, as you know, real estate is very specific to locations and price points. What is happening in one neighborhood might not be true or another. I would love for you to reach out and we can talk about your home and your specific location. I would be happy to answer any questions you have. My team and I will always offer our CANE Client Care, where I will COMMUNICATE, ADVOCATE, NAVIGATE, and EDUCATE in whatever market we are in, because you deserve our very best.

Thank you, as always, for your loyalty and your trust. I look forward to talking with you!