Navigating the Phoenix Housing Market: December 2024
As we close out 2024, the Phoenix housing market is showing a mix of stability and subtle shifts. While active listings are on the rise, demand is holding steady, and prices are showing slight fluctuations. Whether you're a homebuyer, seller, or investor, here's a breakdown of the current trends and what they mean for you.
Active Listings: More Choices for Buyers
Active listings in the Phoenix market are up significantly compared to last year, indicating that buyers have more options available. As of December 1, 2024, there were 21,593 active listings (excluding Under Contract and CCBS), a 35% increase from last year, and a modest 1.1% rise from last month. Including Under Contract and CCBS listings, the total is 24,178, up 34% from last year and slightly up by 0.2% compared to November.
This increase in available inventory is good news for buyers who have been experiencing a competitive market. However, this trend is expected to follow a seasonal pattern, with the number of listings typically decreasing in the coming weeks through January. From a seller's perspective, this uptick in inventory still represents an improvement compared to last year's market.
Pending and Under Contract Listings: Demand Shows Some Signs of Life
Pending listings, which represent homes that are under contract but not yet closed, remain relatively stable compared to last year, with 3,808 pending as of December 1, 2024, up 0.3% from 2023. However, pending listings have decreased by 8.8% from last month, which could signal some softening in demand as we move into the winter months.
Overall, the number of homes under contract (including pending, CCBS, and UCB listings) is up 9% from last year at 6,393, but it has dropped 7.8% from last month. Despite these drops, the fact that demand is still showing positive year-over-year growth is encouraging.
Monthly Sales: A Positive Sign for Buyers
In terms of monthly sales, there’s some good news. While sales are down 12% from November 2024, they are up 11% from last year. November 2024 saw 5,139 sales compared to 4,629 in November 2023. This increase in sales is a positive sign that demand is no longer declining, which has been a concern throughout the year. Additionally, the annual sales rate has started to creep up from the low of 69,527 homes sold at the end of September to around 71,000 in December. While this is still lower than normal, the upward trend is a good indicator of a slow recovery in demand.
Price Trends: Stability in a Challenging Market
As for pricing, the monthly average sales price per square foot has remained relatively stable at $289.69, up just 0.2% from last year. This marks a slight decrease of 0.3% from last month, indicating that there’s little upward pressure on prices in the overall market.
The median sales price in December is holding steady at $450,000, unchanged from last month and up 2.5% from $439,000 in December 2023. The stable pricing suggests that there’s not much competition driving up prices, though this could change depending on interest rates and economic conditions in the months ahead.
Market Conditions: More Choices, But Competition Remains
The overall market remains relatively balanced, with both the Cromford® Demand Index and Supply Index showing signs of life. The Demand Index has crept up from a low of 73.1 in September to 77, suggesting that demand is picking up slightly. On the other hand, the Supply Index has risen from 75 to 89, giving buyers more options to choose from but also increasing competition among sellers.
Despite a stable market overall, the luxury housing market remains more buoyant. The higher end of the market is seeing more activity, driven in part by the surge in stock and crypto market gains. These high-end properties are helping to support the $/SF numbers in the Phoenix area, especially for pending and under-contract listings.
Outlook for 2025: Looking Ahead
Looking into 2025, buyers are likely hoping for a dip in mortgage rates to make purchasing a home more affordable. While the market has shown signs of recovery, the mainstream housing sector remains cautious, with many waiting for more favorable mortgage conditions.
For sellers, it’s important to understand that competition is increasing, and pricing pressure is subdued for homes outside of the luxury market. Homes that are priced competitively and marketed well will likely see more success in this climate.
Conclusion: A Mixed Yet Stable Market
The Phoenix housing market is showing resilience as we close out 2024. While inventory is increasing, demand is holding steady, and prices are remaining stable. For buyers, there are more options available, though competition remains fierce. Sellers may face more competition but still have an opportunity to capitalize on the increased inventory.
As we look ahead to 2025, the Phoenix housing market will likely see more signs of life, but it will be important for buyers, sellers, and investors to stay attuned to fluctuations in interest rates and overall economic conditions.