Driven mostly by a decrease in active shoppers, typically each year we see a summer-seasonal drop in home-buying activity across Phoenix. Listings take a little longer to sell mostly because of the decrease in active shoppers. This makes for our “for sale” inventory being a bit larger, which keeps Phoenix home prices a little more in check. The slowly rising interest rates are also contributing to the slowdown in activity.
This month’s data continues to suggest that this trend is occurring once again. Price per square foot is down modestly, and the inventory shortage has flattened slightly, both of which should continue to move us toward a more balanced buyer/seller market. This does not mean we are done with our seller’s market yet, just that the data supports we are slowly heading in that direction.
The general economy is doing well. One important sign of this is our luxury home market ($1.5 million and above). This market, which had been lagging the rest of the market, is seeing its lowest available inventory since mid-2012.
Rental prices per square foot, which had plateaued, have risen for 7 months in a row. People still need a place to live and for some, our rising prices and interest rates make renting their best option.
What should we expect for the rest of this year into 2019? Continuing moderation in rising home prices, and slowly rising interest rates, which will continue to squeeze rising home prices (slow, but not stop). For the next 18 months or so, this dynamic should continue to move the Greater Phoenix real estate market toward a more balanced buyer/seller market.