The official start of fall is upon us, thus concluding Phoenix’s summer real estate market. Although temperatures are dropping and leaves are starting to fall, by contrast, monthly home sales and yearly prices were rising during the final weeks of the summer season in the Phoenix metro area.
The number of homes sold in the Phoenix housing market rose 2.9% month-over-month in August, according to the latest market report from the Arizona Regional Multiple Listing Service (ARMLS). A total of 6,136 properties changed hands last month, a noticeable 28.8% drop from the 8,614 homes that were sold in August 2021.
According to ARMLS, newly built home sales were up 7.7% yearly in August, accounting for just over one in every five home sales in Maricopa County.
In August, homes listed for sale spent an average of 42 days on the market, a nine-day increase from July and a 13-day jump from the same period in 2021.
Average and median sale prices rise for Phoenix homes
Homes that were listed and sold during the August market recorded an uptick in prices compared to the same month last year.
Average new list prices for properties in the Phoenix metro rose 13.5% yearly in August, increasing from $512,200 to $581,400 over the span of a year. The median new list price also changed in the same month, growing 10.7% from $420,000 to $465,000 between August 2021 and August 2022.
Homes sold in August went for a slightly higher price compared to a year ago. The average sale price for a Phoenix home rose to $549,300 while the median sale price increased to $445,000, up 11.9% and 9.9% year-over-year, respectively.
Total home inventory sees improvement in August
The number of homes hitting the Phoenix market saw some growth in August, giving prospective buyers more choice.
Total inventory of all Phoenix homes listed for sale jumped 5.2% between July and August. By comparison, this same metric was 37.5% in May according to ARMLS, marking a slowdown in the rate of supply growth.
On a yearly basis, the growth in total home inventory was significant as the supply of housing soared 88.8% annually in August, rising from 11,562 to 21,832 listings in the span of a year. As of August, there is 3.56 months’ worth of supply, up from 3.48 in July.
However, new inventory hitting the Phoenix market has been trending downward. In August, new inventory dropped 9.1% month-to-month and 2.8% yearly.
Active listings accounted for 87% of the total market inventory, followed by 11% UCB (Under Contract Accepting Back-Up Offers) listings and 2.2% CCBS (Contract Contingent on Buyer Sale) properties.
Drop in home prices forecasted for September
By the end of September, ARMLS estimates that Phoenix home prices will see a decline.
A slight decrease is predicted for both the average and median home price in the metro, which are expected to fall to $544,500 and $440,000, respectively.
Tom Ruff, a data analyst with The Information Market, noted in the August ARMLS report that if September’s median sales price projection is correct, then the Phoenix metro will see a month-over-month price decline of 1.1%. The median sales price would be up 7.32% annually but down 7.37% from May’s record of $475,000.
“When September’s numbers are reported, we will see a drop in both sales volume and prices. If our models are correct, year-over-year sales volume will decline approximately 30% year over year,” Ruff stated.