Home Sale Prices In Phoenix, Arizona Are Trending Down For The First Time In 5 Years
Despite not being considered one of the biggest cities in the world, Phoenix, Arizona, still houses a vast amount of residents. According to World Population Review, the number of citizens, as of 2020, is over 1.6 million, making it the 5th largest city in the United States and the biggest city overall in the state of Arizona. In addition to its sizable community, Phoenix has a costly real estate market. The median house value sits at around $250K while rent costs around $1K per month.
Fortunately for those looking to buy a house in this area, now may be the best time to do so. According to data collected by Redfin exclusively for House Digest, home sale prices have started to fall for the first time in five years. Of course, this will prove to be problematic for those looking to sell their home. But what is the cause for the sudden decline? What exactly does it mean? And are more houses being listed? Let's break down the statistics and figure out exactly why this is happening.
Why are prices declining now?
As you can see from the graph, there has been a slight steady increase in house sales dating back to at least January 2018. Of course, there were moments when there was a slight decline, such as in April 2020. Yet, just two years later in April 2022, things began to change drastically. January saw a high in median home sale prices at close to $500K. Six months later, July saw a median sale price of just $450K. That's almost $10K less a month. So why is there such a drop?
According to Nicole Bachaud, who interviewed with KTAR News, the real estate market is starting to level itself out from the previous few years. Yet, she states it's important to remember that homes in this area are still selling for 70% more compared to nearly three years ago. Now, however, things have shifted. She explains, "There's more options. There's more availability of homes. It's easier to negotiate prices. You have less competition from other buyers."
Bachaud goes on to state that, overall, even with more choices, there is still a limited number of homes on the market. The reason why these homes were not selling before is that prices were too high for homebuyers. "Once those prices get to a point they can afford, all of a sudden you're going to get people buying and you're going to have the prices kind of going back up and having that pressure again," she adds.