Monthly home sales and prices are falling in the Phoenix metro, but a higher number of homes hitting the market could provide buyers with more choice in properties than in 2021.

In July, new home inventory in the Phoenix metro area fell 13% month-over-month to 10,588 listings, according to the most recent data from the Arizona Regional Multiple Listing Service (ARMLS). This rise marked a 7.2% increase in new properties compared to a year ago when 9,878 new homes were online in July 2021.

Total inventory in the Phoenix region grew 15% between June and July to 20,746 properties. The number of homes on the market has nearly doubled from July 2021, rising 92.2% annually to 10,793 listings.

ARMLS reported that 87% of July’s inventory was an active listing, representing 17,951 homes for sale. UCB (Under Contract Accepting Back-Up Offers) listings accounted for 11% of the market’s inventory, about 2,342 listings, while the remaining 2% of the market consisted of CCBS (Contract Contingent on Buyer Sale) listings.

In July, there was 3.48 months’ supply of inventory. This is an improvement from June, when 2.33 months of housing was available.

July home sales at the lowest level since 2007

The number of Phoenix metro homes bought declined in July to the lowest level seen in years.

On a yearly basis, home sales dropped 31.6% to 5,962 sales, a steeper decline than monthly transactions, which were down 22.8% in July. This drop marks the second-lowest sales total ever reported in July, with the lowest recorded in July 2007, when there were only 4,730 sales.

Meanwhile, properties are sitting on the market longer. In July, Phoenix homes spent an average of 33 days on the market, up five days from a year ago and a monthly increase of three days from June.

Compared to 2021, prices for new homes hitting the market have been rising. The average new list price for a Phoenix home was $592,900 in July, up 14.3% compared to the same month in 2021. Median new home list prices were also up 17.1% yearly to $480,000.

Homes sold in July reported a lower monthly average sales price but better annual results. The average sales price grew 9.7% year-over-year to $546,800, up from $498,600. Every month, average sales prices were down 7.4% compared to $590,800 in June.

Similarly, median home prices grew 12% annually in July to $453,500 but dropped 4.5% month-over-month.

Median sales price of $444,900 projected for August

When the next set of ARMLS data is released, we’ll likely see monthly prices and sales volume drop.

Tom Ruff, a data analyst with The Information Market, stated in the report that the ARMLS Pending Price Index is projecting median sales price of $444,900, which would result in a 9.85% year-over-year gain. However, median prices would drop monthly.

At the beginning of August, the number of “pending” contracts was 27.95% lower than last year. In August 2021, ARMLS recorded 8,614 sales.

“When August’s numbers are reported, we will see a drop in both sales volume and prices,” said Ruff. “If our models are correct, year-over-year sales volume will decline approximately 25% year-over-year, while the median sales price is projected to decline 1.9% month-over-month.”

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