WalletHub's latest "Best Cities for Jobs" study places Scottsdale at number one in the U.S. and shows the Greater Phoenix area with several strong performers, including Chandler (No. 14), Gilbert (No. 28), Tempe (No. 30), Peoria (No. 33), Mesa (No. 55), Phoenix (No. 72), and Glendale (No. 80). The big takeaway is simple. The Valley is not driven by one job center. Job growth and hiring are happening across multiple Valley cities.

Why this matters for Phoenix area homebuyers and sellers

Jobs support housing demand. When an area attracts employers and workers, it often brings new residents, strengthens household formation, and helps sustain buyer activity. The rankings also reinforce what locals already know. Demand varies by submarket, even within short drives across Greater Phoenix.

For buyers, this can affect competition, pricing, and how quickly homes sell in specific areas. For sellers, it can influence buyer traffic and the amount of leverage you have when your home is priced correctly and shows well.

What Scottsdale's top ranking can signal for the local housing market

WalletHub points to Scottsdale's strength across job market measures and income considerations adjusted for cost of living. It also notes that Scottsdale and Gilbert are tied, along with a few other U.S. cities, for the highest median household income in the country when adjusted for cost of living.

In real estate terms, areas tied to higher wages and strong employer bases often see more consistent demand, especially for well-located homes near major work centers and amenities.

How WalletHub ranked the cities

WalletHub compared 182 cities and weighted the score mostly toward job market factors, with a smaller portion tied to things like affordability and commuting.

What it means if you are relocating to Phoenix

If you are moving here, a practical approach is to choose an area that fits your day-to-day lifestyle and gives you access to more than one job corridor. Many relocations go smoother when you prioritize commute options, schools, and nearby conveniences instead of focusing on one city alone.

If you want help narrowing it down

If you are relocating or making a move within Greater Phoenix, I am happy to share a short list of neighborhoods that fit your commute to work, budget, and lifestyle.

Source: WalletHub, "Best Cities for Jobs."

Cindy Nelson is an Arizona native and REALTOR® with Realty One Group serving Greater Phoenix, including Scottsdale, Chandler, Gilbert, Tempe, Mesa, and Peoria. Her local expertise and strong real estate knowledge have helped buyers, sellers, and investors succeed with strategies tailored to their goals. Outside of real estate, she supports local small businesses, stays involved in the community, and enjoys exploring Arizona.

There is no online shortage of armchair quarterbacks when it comes to prognostications on the future of home values and affordability. However, there are narratives that some people, and journalists, stubbornly hold to that are simply outdated or incorrect. Many of them were true a few years ago but are no longer true today. Here are just a few:

Myth #1 - Buyer demand is declining.
This was true in 2022 and 2023, but is no longer true today. While mortgage rates have knocked many buyers out of the game, buyer demand is now stable and following last year's trend with little reaction to rate fluctuations.

Myth #2 - There is very little to buy under $300K.
This was definitely true a few years ago, but not today. In February 2022, there were only 90 single family listings active for sale under $300,000 in Maricopa and Pinal County. Today there are 534, mostly in Pinal  County. Condo and townhome inventory is even more abundant by comparison. In March 2022, there were only 156 active condo/townhome listings while today there are more than 1,200, all of which are in Maricopa County.

Myth #3 - My income is too high to qualify for any homebuyer assistance programs.
Some grant and downpayment assistance programs correlate to an area, not income. Many have income limits as high as $150,000/year and some don't have income limits at all. Putting in the research and finding a qualified loan officer to explain these programs could save thousands of dollars.

Myth #4 - I need to be a first-time homebuyer or renter to qualify for homebuyer assistance programs.
In most cases, this is not true. They may *say* first-time home buyer, but if you haven't owned a home in 3 years or more, you're a first-time home buyer once again according to HUD's definition. Also, if you've only ever owned a home with a spouse, have a child, and are now divorced, you are also a first-time home buyer. Or, if you've only ever owned a mobile home. These are just 3 of the 5 HUD definitions for first-time homebuyers.

Myth #5 - Mortgage rates are too high, there's nothing to be done about it.
57% of January sales between $200,000-$600,000 involved seller-paid incentives, most went towards a temporary buydown of the mortgage rate, and many home builders are providing permanent rate buydowns. Other sellers have FHA or VA loans that are assumable with rates below 5%. In fact, about 10% of all active listings fit this criteria. Some buyer assistance programs even allow grant money to buy down mortgage rates. Again, a little research goes a long way in hacking the affordability issues caused by mortgage rates.

Myth #6 - Housing is in a bubble and home prices are on the precipice of a crash.
One could argue that Greater Phoenix already had a bubble and price crash in 2022 when prices rose to their peak by May and declined a whopping 12.3% from May to December that year, with short-term flip investors taking the brunt of the pain. Since then, prices bounced and stabilized with most price ranges seeing less than 2% appreciation year over year today. That is less than the current rate of inflation, and what is expected  after nearly a year in a buyer-leaning market. While Greater Phoenix is officially in a buyer's market, it's very mild. Under these conditions, sale price measures are showing most non-luxury buyer negotiations at approximately 1.9% below the last list price.  That's a huge improvement over 2022 where sales prices were averaging 2.4% OVER list price. Prices are declining in some areas, but not all, and not by leaps and bounds. Current supply and demand indexes do not support massive declines in sales prices, but shaving 1-2% off lower list prices during negotiations is not out of the question. Sellers are not pushing the market with outrageous list prices. In fact, most are in line or even below last year in some price ranges.

Myth #7 - I'll sell my home "as-is" and price it aggressively with buyer incentives.
This worked in the mild seller's market of 2023 and first part of 2024, but not now. In a buyer's market, it's okay to sell your home "as-is" so long as it "is" in excellent condition. The hierarchy of importance isn't price first, then buyer incentives, then condition. It's condition AND price, the importance of additional incentives depends on your area and price range. When everyone is offering low prices and buyer incentives, properties in good condition rise to the top.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2025 Cromford Associates LLC and Tamboer Consulting LLC

For Buyers:

The buyer's market in Greater Phoenix is still young at just over 5 weeks old but isn't getting worse thanks to supply stabilizing over the past two weeks. For some, this scenario brings anticipation of a decline in sales prices, however there's more to this buyer's market than meets the eye. There have only been 3 other buyer's markets in Greater Phoenix over the last 25 years, and they are all unique in their circumstances and thus give us little to compare with our current market.

What can we expect in terms of price trends today with our new baby buyer's market? That depends on how long the market stays friendly towards buyers. Sales price is the last measure to respond to a shift from a seller advantage to a buyers advantage. The first measure to crack is the seller's asking price. When that doesn't improve buyer interest, then buyer incentives increase. If that doesn't improve sales, then negotiations begin to shave more off of the seller's asking price. The whole process for sales prices to respond can take 3-6 months; so if the buyer's market is brief there may be little effect on sales price trends.

Currently, price measures are flat and buyer incentives are high at 53% of November MLS closings with a median cost to sellers of $10,000. The last 6 months have the highest percentage of concessions ever recorded in Greater Phoenix and double the long term normal concession range of $4,000-$5,000.

The moral of this story is don't rely on price measures to reflect the best time to buy. By the time prices hit a bottom the party is already over. Additionally, measures don't reflect the plethora of "shadow" benefits that happen outside of price during buyer's markets; like rate buy-downs, loan assumptions, seller acceptance of contingent sales, and major property improvements performed prior to close.

Will prices drop? Currently, December sales price measures are trending up over November, not down. If we attempt to correlate to the last buyer's market of 2022 that lasted 4 weeks between November and December, price measures dropped just 2.7% during that time before immediately bouncing up again in January and February when mortgage rates declined to 6%. Buyers who bought at that time have the most appreciation accumulated within the last 3 years.

For Sellers:

It continues to be a frigid market for most zip codes in Greater Phoenix with the lowest contract ratio* we've seen since January 2015, 10 years ago. Mortgage rates have improved slightly from 7.1% in November to 6.8% as of December 12th, and most national lending experts believe they'll stagnate for the rest of December. In order to see a notable improvement in demand, these same experts agree that mortgage rates need to drop below 6.5%. Sellers struggling the most are those who have owned for less than 3 years, and especially those who purchased in mid-2022 at the height of market price. Those sellers may need to hold on for another year or so to see enough appreciation to recoup their selling costs and down payment. However, those who have owned for 3.5 years or more still have significant equity to manage the expenses of selling in today's market.

Sellers who purchased in 2021 have a possible advantage over those who purchased after them, and that's a much lower mortgage rate which may be assumable by a buyer. Both VA and FHA mortgages are automatically assumable for a qualified buyer and this option could save the seller thousands of dollars in costly buyer incentives in addition to saving the buyer hundreds per month in their payment.

After 2.5 years of a challenging housing market, there is one thing sellers can look forward to right now; the Spring buying season that kicks off in mid-January and continues through May every year. The Spring of 2024 saw contracts increase 83% from January through May, and the bounce was 85% in Spring 2023. Pre-Covid 2019, the Spring bounce was 105%. If mortgage rates decline as expected in 2025, this Spring could see similar improvements for sellers.

*listings under contract divided by active listings

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2024 Cromford Associates LLC and Tamboer Consulting LLC

It may be hard to believe, but recessions are historically the beginning of a turnaround for the housing market. After enduring more than 2 years of declining sales, sellers and buyers may start moving and transacting again. While recessions are negative for the economy (as they coincide with higher unemployment), two things typically occur that turn the housing market positive.

The first is home value stabilization. In every recession since 1970 (except for one infamous recession in 2008) home values had minimal fluctuation and appreciation year-over-year. The second is mortgage rates. Every recession since 1970 saw mortgage rates decline while at least 90% of the labor force remained employed. According to the August employment report from the Arizona Dept of Economic Opportunity, private sector earnings rose 7.3% annually in June, and 5.3% in July. Both rates are higher than the rate of inflation, and higher than the rate of home price appreciation. The combination creates an environment for increased home sales as affordability improves due to higher incomes, lower rates, and flat home appreciation.

Unfortunately, Mortgage News Daily showed zero improvement in purchase mortgage applications in August. The housing market simply doesn't move as fast as the stock market, and it takes time for buyers to warm their engines and apply for mortgages after rates begin their decline. Partly because they wait to see if rates continue down or stabilize, but also because they don't have an acceptable home in sight for motivation. As a result, application data often picks up after showings increase.

Future buyers may have one other obstacle to overcome, and that's selling their existing home. This is what Greater Phoenix is experiencing now. As expectations of sustained rate declines increase, it's sellers who are getting off the fence first. Weekly new listings are up 11% since rates began their decline on August 1st. These sellers will most likely become buyers within 1-3 months. This creates a good opportunity for buyers who are ready today. An early boost in supply without an offsetting boost in competing buyers means the buying environment will remain relaxed and accommodating over the next few months until the new year begins.

For Sellers:

September and October are the last hurrahs for home sale activity as 2024 enters its last stretch. New listings activated during this time should be well priced and in competitive condition to the listings around them. The median marketing time before contract is currently 33 days, so most properties listed in September should expect a contract in October. However, sellers who wait to list until late October will run into holiday speed-bumps that could tack on an extra 1-2 weeks before an acceptable contract.

While lower mortgage rates are expected to boost demand in price ranges under $2M, they don't have much effect on the high-end luxury market where 55% of sales over $2M are cash. Recessions are not good for luxury because they coincide with poor stock market performance and stagnate corporate profits, which are the primary drivers for demand in this segment. So far, multiple headlines warning of an approaching recession are not tanking the stock market, and luxury listings under contract for September are higher than any other year. Other good news for luxury sellers, high cancellation rates from May-July dropped supply counts and launched Paradise Valley back into a seller's market. In fact, all luxury sellers in the Northeast Valley saw market improvements from lower supply counts.

However, uncertainty can still stall luxury sales in the 4th quarter. If unemployment rates continue to rise and uncertainty grows over a recession and the November election, the hope of an October rally could fade and contract activity stagnate until the election and holiday seasons have run their course. Hope and optimism will return at the kickoff of 2025 along with perfect weather, tourism, and an increasing flow of contracts.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2024 Cromford Associates LLC and Tamboer Consulting LLC

Don't forget to subscribe to my channel to stay on top of the Greater Phoenix area real estate market.

Cindy Nelson is an Arizona native and REALTOR with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. In her spare time, you'll find her volunteering in her community, supporting local small businesses, and enjoying all Arizona has to offer.

For Buyers:
Well the balanced market didn't last long, 7 weeks to be exact. Last month the Federal Reserve gave the housing industry a much needed gift. Not only did they not raise the Federal Funds Rate, they also announced their intention to drop it three times in 2024. Conventional mortgage rates responded by dropping from 7.1% to 6.62% within 2 days. Mortgage rates have now dropped 1.4% since they peaked at 8% in October 2023, saving a borrower nearly $380 per month on a $400,000 loan, a payment decline of 13%. For perspective, each time the rate drops by 1%, the mortgage payment can drop between 9-10% depending on where it started, in many cases saving at least $200/month*. This rate drop was enough to give December's mortgage applications a boost, which could be a precursor to January's accepted contract counts.

In addition to the savings from declining mortgage rates, December ended with 49% of sales involving a seller-paid concession to the buyer at close of escrow, at a median cost to the seller of $10,000. Coolidge had the highest percentage of sales with concessions at 81%, followed by Laveen at 79%. Coolidge has a median sales price of $305,000 with the majority of sales being new construction. Laveen has a median sales price of $436,000, also with a majority of new construction. You've probably already picked up on the trend here. Over 76% of all newly constructed home sales that closed through the Arizona Regional MLS noted some form of builder-paid concession. If they were sold for under $500,000, that percentage rises to 82%. The majority of concessions go towards further buying down the buyers' mortgage rate, temporarily or permanently.

So what can Greater Phoenix expect for 2024? It's reasonable to expect some relief, not in the form of declining prices but in declining mortgage payments. Combine this with rising family incomes and we can expect affordability measures to improve along with demand. It's not reasonable to expect another insane market with skyrocketing prices like 2020-2021, or another 12.5% drop in values like 2022. It could be quite boring in terms of price for the first quarter, but uplifting with more traditional home buyers getting back in the game. Things could get more exciting after the Federal Reserve meets again at the end of January and further reveals their plan for the Federal Funds rate in 2024. Stay tuned.

For Sellers:
While Greater Phoenix is out of a balanced market and continually improving, the seller's market is still very weak so a combination of good condition and price remains key to facilitating an offer within a reasonable time frame, along with an open mind regarding concessions to the buyer. New listings so far in the first week of January are higher than last year, but not high, and while inventory is beginning to rise moderately it's still 37% below normal for this time of year.

Not all cities are in a seller's market, the distribution is as follows from strongest-to-weakest:

Seller's Markets: Tolleson, Apache Junction, Fountain Hills, Chandler, Gilbert, Laveen, El Mirage, Anthem, Glendale, Sun Lakes, Phoenix, Scottsdale, Mesa, Avondale

Balanced Markets: Tempe, Litchfield Park, Sun City West, Peoria, Goodyear, Surprise, Paradise Valley, Arizona City

Buyer's Markets: Cave Creek, Gold Canyon, Queen Creek, Sun City, Casa Grande, Buckeye, Maricopa

Most cities are either gradually improving or holding steady in their market measures. Sale price measures in January will reflect December negotiations, but with this turn in the market fueled by lower mortgage rates and seller concessions we can expect sales price measures to be sustained in the first quarter. The second quarter could get exciting if rates continue down.

*Talk to a qualified lender to determine your specific circumstance.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report

I don't know how I missed this place all these years, but I just discovered the most incredible boutique filled with unique goodies, homegrown treats, and the most amazing Christmas shopping experience. Orange Patch Too is located on McKellips Rd, just east of Val Vista Dr in Mesa. Their roots date back to 1962 when the Freeman family first started their business as a roadside citrus stand.  The Freeman's have since expanded their business, and over the years have become 'Arizona's Favorite Local Market & Boutique'.

What makes the Orange Patch Too so special is the Freeman family's knack for finding treasures all over the country. There's something new to discover with every visit making it the perfect place to find a one-of-a-kind something. Whether you're treating yourself or hunting for the perfect gift, they have it all - home décor, jewelry, skincare items, candles, clothing, clocks, puzzles, trinkets, and toys are just a few of the treasures you will find here. Seriously, there's something for everyone.

What I also love about Orange Patch Too is their love for promoting local businesses and artisans. The food selection is like a trip to the local farmer's market, packed with top-notch local goodies. When you smell fresh baked goods, you'll know you're at the right place. Trust me, the aroma of freshly baked bread, cookies, and sweet rolls will get you every single time. Plus, they have a great selection of Arizona-specific products from delicious treats to handcrafted items that showcase our great state. You'll find everything from home accessories and gift items to fresh tortilla chips, salsa, local honey, nuts, jellies & jams, candies, and of course, locally grown citrus.  

During the Christmas season, you will walk into a shopping experience filled with holiday cheer. Everywhere you look is a festive display of unique Christmas merchandise. You'll find ornaments, nativity sets, indoor and outdoor decor, snow globes, kitchen accessories, decorative accents, lots of sparkles and so much more. And the way they set it all up makes the whole shopping spree feel like a Christmas adventure. It's so festive and fun!

I had a blast shopping here, and I'm sure you will too. It's uniquely Arizona, making it a wonderful small business to support. So, if you're ready for a shopping excursion that combines the local vibe with unique finds, then Orange Patch Too is where it's at.

Location: 3825 E McKellips Rd, Mesa, AZ 85215 

Follow them on Instagram:  www.instagram.com/orangepatchtoo 

Cindy Nelson is an Arizona native and REALTOR with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. In her spare time, you'll find her volunteering in her community, supporting local small businesses, and enjoying all Arizona has to offer.

Cindy Nelson is an Arizona native and REALTOR with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. In her spare time, you'll find her volunteering in her community, supporting local small businesses, and enjoying all Arizona has to offer.

For Buyers:
Buyers who felt they lost out on the buyer's market last year will be getting another chance this year. The Greater Phoenix housing market, on the whole, only has a few days left before it enters a balanced market. However, as 18 cities are still in seller's markets, there are 11 that are either already in balance or in buyer's markets.

What does a buyer's market mean for buyers? Most buyers assume it means that sales prices will come down, but by the time sales price measures show a decline the buyer's market could be 2 months old, or already over like it was last year. The first thing to move isn't a sales price, but a list price combined with higher seller incentives for buyers.

Over the past 2 months, as mortgage rates peaked at 8%, weekly price reductions increased in number by 33%. Meanwhile, the median seller incentive to buyers increased from $8,000 to a new high of $9,900 so far this November, the previous high was recorded last January at $9,700. Increases in the dollar amount and percentage of sales with incentives were most noticeable in the first-time homebuyer price range of $300K-$400K and also in cities with a significant number of competing new home communities.

How long this trend will last is unclear as conventional mortgage rates fell sharply this month to 7.3% and FHA/VA fell to 6.7%. The higher mortgage rates are, the higher the cost to the seller to buy them down. Mortgage rates have been near impossible for experts to predict over the past 18 months, however, there are strong feelings that the end is near for rate hikes by the Federal Reserve. If mortgage rates decline in response, then the current market decline will be short lived.

In short, it's a good idea for buyers to stay engaged and vigilant in identifying opportunities in November and December. Once 2024 begins, the peak homebuying season is back in swing with more buyer competition.

For Sellers:
This is not a good time to test a price higher than market value for your home. As the seller's market weakens on a daily basis, it's the outskirts of town that are affected first as the interior cities follow quickly. As of November 9th, the following cities are in buyer's markets: Surprise, Litchfield Park, Goodyear, Buckeye, Maricopa, Casa Grande, Gold Canyon, and Queen Creek. Balanced markets are Cave Creek, Peoria, and Sun City. All others are still seller's markets, but weakening fast.

Seasonally, the best time to list your home is not in the 4th quarter. However, sellers always want to be selling in a seller's market. While it's not a bad idea to wait until the 1st quarter typically, under these circumstances the benefit could be offset by a weaker buyer's market. That means more competition from new listings, more days on market, and more price reductions. The determining factor that could change the course of the current market trend is mortgage rates, which have been unpredictable and volatile this year.

For those who are in need of selling, you may get your asking price, but at a higher expense as long as rates are elevated. As a result, sales price measures will not show a decline, but the sellers' net proceeds will be squeezed. It may not be the market we love, but it's the market we're with.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

Volunteering is more than just a pathway to giving back. In Greater Phoenix, volunteering becomes a unique way to contribute to worthy causes while also making meaningful connections with the area and its people. Here are six opportunities where you can lend a helping hand, make a difference, and genuinely get to know the Greater Phoenix area.

Midwest Food Bank (Gilbert, AZ)
Dedicated to alleviating hunger and poverty, Midwest Food Bank distributes food to about 30 nonprofit agency partners in the greater Phoenix area and beyond. By volunteering here, individuals can actively participate in sorting, packing, and distributing food to local nonprofits, contributing directly to the fight against food insecurity. The sense of community and shared purpose at Midwest Food Bank makes it an excellent choice for those seeking hands-on involvement in addressing local challenges. https://www.midwestfoodbank.org/locations/gilbert-az 

Feed My Starving Children (Mesa, AZ)
With a global mission to combat hunger, Feed My Starving Children relies heavily on volunteers to pack nutritious meals for children in need. In Phoenix, volunteers can engage in meal-packing sessions, converting their time and energy into tangible resources that benefit malnourished children worldwide. This hands-on experience provides a direct and impactful way to contribute to a global cause from the heart of Phoenix.  https://www.fmsc.org/ 

JustServe.org (Valleywide) 
For those looking for a one-stop-shop to discover a wide array of volunteer opportunities in the Phoenix area, JustServe.org is a valuable resource. This online platform connects volunteers with local projects and organizations, making it easy to find opportunities that match individual interests and skills. From community clean-ups to educational initiatives, JustServe.org offers a diverse range of options for those eager to make a difference.  https://www.justserve.org/ 

Valley of the Sun United Way (Valleywide)
Addressing critical issues in education, financial stability, and health, Valley of the Sun United Way is a local force for positive change. Volunteer opportunities with this organization cover a broad spectrum, including mentoring programs for at-risk youth and initiatives promoting financial literacy. By contributing time and skills to Valley of the Sun United Way, volunteers actively participate in building a stronger and more resilient community.  https://vsuw.org/ 

St. Mary's Food Bank (Phoenix)
As one of the largest food banks in the country, St. Mary's Food Bank has been a beacon of hope for those facing hunger in Arizona. Volunteering here involves various tasks, such as sorting and packing food or assisting with special events. By actively engaging with St. Mary's Food Bank, volunteers play a direct role in addressing food insecurity and supporting the organization's mission of ending hunger in the local community.  https://www.firstfoodbank.org/ 

HandsOn Greater Phoenix (Valleywide)
For a diverse range of volunteer opportunities, HandsOn Greater Phoenix stands out. This organization collaborates with local nonprofits and community groups to offer flexible volunteer projects, addressing everything from environmental initiatives to educational programs. Volunteers can explore and choose projects that align with their passions and skills, making HandsOn Greater Phoenix a versatile platform for those eager to contribute to various causes. https://www.handsonphoenix.org/ 

Whether you're sorting food, packing meals, or diving into various projects, each effort leaves a lasting impact. So, are you ready to add your chapter to the volunteer story? Dive in, make a commitment, and if you decide to lend a hand, I'd love to hear all about your experience in making Greater Phoenix even more amazing!

Cindy Nelson is an Arizona native and REALTOR with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. In her spare time, you'll find her volunteering in her community, supporting local small businesses, and enjoying all Arizona has to offer.

For Buyers:
The 4th quarter is here, and this is the best time of year to be a buyer in Greater Phoenix! Inventory continues to rise, up 22% in 10 weeks to be exact, and price reductions typically peak in October and November. Most sellers listing in October are motivated to close on their homes before the end of the year, but few are more motivated than builders. New homes make up 22% of active MLS listings and 29% of Maricopa and Pinal County August sales. Builder incentives are including not only closing cost assistance, but select upgrades and significant permanent and temporary rate buy downs. For perspective, let's use a $350,000 loan. If a buyer uses the seller's or builder's closing cost assistance to buy down the mortgage rate by 3% it would save more than $650/month on their payment. Buying the rate down by 2% saves $450/month.

Builders are not the only ones with incentives, however. Last month, 45% of all closings through the Arizona Regional MLS involved sellers paying buyers' closing costs with a median of $8,500, about the cost of a 2/1 temporary buy down on a  365,000 loan. Buyers would be smart to consider areas with heavy competition between builders. The cities of Coolidge, Maricopa, Tolleson, and Laveen collectively saw 70% of sellers agree to closing cost assistance with 50% of them paying out $10,000 or more.

First-time home buyers may feel like the difficulties they're facing in today's housing market are unique and unprecedented. However, high rates like today bring out tools and opportunities for buyers that only emerge when the market is stressed, and they disappear when the market recovers. Baby Boomers, considered to be the wealthiest generation today, didn't have it so great when they were in their 20's and 30's. In the midst of building their careers, growing their families, and purchasing homes, the economy experienced 4 recessions, 4 rounds of high unemployment, and mortgage rates that soared over 10 years from a low of 7% to 18%; it took another 10 years to get back down to 7%. During that time, home sales were low but home values did not decline, similar to today. Here are some stories about how a few of our Baby Boomers and Gen-Xers purchased their first home:

• Mike, 72yo - first home in 1976 for $9,600 at 8.25%, gifted down payment from family and rent-to-own appliances. Sold it 3 years later for $19,000.
• Tom, 68yo - bought his first home in the 70's together with 3 friends at 9% as tenants in common.
• Chris, 58yo - first home 1989, paid a distressed seller $4,000 and took over their FHA mortgage payment
• Thomas, over 59yo - first home was a distressed HUD foreclosure he bought for $55K and fixed it up himself
• Michael, 66yo - sold his boat and car to purchase his first home at 8.5%
• Raejean, 57yo - purchased her first home in 1985 at 16.5%
• Kathleen - purchased in 1979 with gifted down payment and 3-2-1 rate buydown
• Kathryn - first home in 1981, interest rates were 18%, but she assumed the seller's VA loan at 6%
• Nick - bought first home in 1988 with his brother, assumed the seller's VA loan with $4,500 down and got a roommate to help make the payment, didn't care about the rate
• Jon - first home in 1981, assumed a VA loan at 10%, seller financed the rest at 10%. Existing rates were 18%

Each one said their decision to buy their first home was a good one in hindsight, even though money was tight and rates were high. Especially today, it's highly recommended to consult with a REALTOR® and a lender who is fully aware of available loan programs, FHA and VA loan assumptions, seller incentives, down payment assistance, and other tools designed to help you on your way to home ownership and building wealth. 

For Sellers:
The seller market is weakening in the wake of rising mortgage rates as we head into the 4th quarter. Greater Phoenix is still in a seller's market, but at the current rate of decline it could see a balanced market by year end. This means that sellers should allow for longer marketing times, improving the condition of their homes prior to listing if necessary, and staying open to funding rate buy downs. Prices are holding tight and are not expected to decline significantly for now.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

In this issue: Phoenix Area Market Update PLUS Safest Cities for Trick or Treating, AZ Inflation Slows, Chili Recipe, and more!

You're invited to the 2nd Annual Realty ONE Group Trunk or Treat!

I'm going to decorate my trunk along with several other agents in my office and I hope to see you there! Admission is free. Just bring your treat buckets.

Cindy Nelson is an Arizona native and REALTOR® with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. She subscribes to the Cromford Market Report and is an active Trusted Advisor University member. 

For Buyers:

When first-time home buyers talk to their parents or grandparents about today's mortgage rates, they may get a response similar to, "I purchased my first home in the 80's at [insert range of 10%-18% interest here]." In fact, some carry their high mortgage rate like a badge of honor because it turned out to be a great decision, despite the uncertainties of their time. In their 20s and early 30s, Baby Boomers endured 4 recessions, 4 rounds of high unemployment, and erratic mortgage rates that started from a low of 7% and rose to a peak of 18%. However, those who got in the game where they could, with a long term mindset, were rewarded and are looked upon as "lucky" to have gotten in when they did.

Flash forward to 2023. While admittedly there is a large swath of buyers priced out of purchasing a home due to mortgage rates between 6.8%-7.5%, there are a number of them who have the means to enter the market but are waiting for mortgage rates to decline. Their mindset is not unlike those buyers who waited for prices to come down when rates were below 3% 2 years ago, and now regret it. Waiting for the perfect home, at the perfect time, at the perfect price and the perfect mortgage rate is an exhausting and futile endeavor. The reason being that when all the perfect boxes are checked off, there is a line of competing buyers that make the experience… well ...less perfect.

Jump to September. As Greater Phoenix moves into the last few months of 2023, seasonally this is the best time to be a buyer. Active listings are rising as they typically do in the Arizona Regional MLS, providing more selection. The median sales price is $40,000 below the highest peak of June 2022, and prices are stable for now. These months are typically slower than the Spring, but competing demand for homes is further suppressed by mortgage rates. Thus 41% of sales involve seller-paid closing costs that often include a rate buy-down. Closing cost assistance is one of the first things to go when rates decline and/or buyer competition increases in relation to supply. Since January, the percentage of sales with assistance has dropped from 51% to 41% and the median paid by sellers has dropped from $9,700 to $7,500.

Things aren't perfect, but 3 out of 4 isn't bad.

For Sellers:

Currently, the median number of days prior to a seller obtaining an accepted offer is 21 days. However, going into the last few months of the year, sellers should allow for an extra week or two as the calendar approaches year-end holidays. Historically, properties that are listed in October are on the market for a median of 2-4 days longer than those listed in September. However, properties listed in late October or early November are typically 10-14 days longer.

Real estate professionals often advise their clients that the first week of active status is the most important in terms of gauging whether a listing is priced appropriately to attract a full price offer. Analyzing the last 30 days of sales, this advice proves to be true. Properties that accepted contracts within 1 week of list showed 68% of sellers received their original list price or more at closing. At 2 weeks on the market, that measure declines to 53% but is still a majority. By week 3, however, 59% of sellers accepted offers less than their original price, and after 4 weeks on the market 81% accepted less.

As sellers approach longer marketing times in October, it's common to see both active listings and price reductions increase. This year is following that expectation and weekly price reductions are on the rise, up 34% since the beginning of July, but still down a whopping 63% from this time last year. Weekly price reductions are expected to continue rising gradually from now until they peak in early November, so sellers planning to list within the next few weeks may want to budget for at least one in their strategy.

Make no mistake though, the market still favors sellers. So far this year, sales prices have appreciated 6-7% over the past 8 months, with 12 fewer days on market compared to last year, and tighter negotiations within just 2% of the last list price on average. Sale prices are expected to continue rising mildly for the next 3 months.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

For Buyers:

Not a lot of changes are happening in the housing market right now. It's as if both buyers and sellers are in a holding pattern awaiting a sign before making a move. Conventional mortgage rates have held steady in the high 6% and low 7% range for nearly 3 months now with little signs of a decline yet, keeping contract activity restricted since the 4th of July and overall demand 22% below normal for this time of year.

The continuous drop in supply we've been experiencing since October has slowed and flattened out over the past 6 weeks as well, but still 52% below normal for the past month and 39% below last year's supply count. The ratio between supply and demand is keeping Greater Phoenix in a seller's market, but it's mild compared to the last 3 years. This indicates an upward pressure on price, but more subdued. Between September and December, the annual appreciation rate is expected to turn positive and may return to a pre-pandemic level similar to 2018 and 2019, which had annual appreciation rates between 5-8% on average.

This is good news for buyers for two reasons. First, the latter half of the year is typically the best time to be a buyer in Greater Phoenix as the highest months for closings are March through June. After June, buyer competition declines until the end of the year and gives buyers a little breathing room to tour homes and make decisions. Second, most buyers like to see their home's value sustain or increase after they purchase.

There is also an expectation that the uncertainty surrounding mortgage rates may be lifted towards the end of the year and hopefully after the Federal Reserve concludes their meeting on September 20th. While mortgage rate predictions continue to be all over the board, and mostly wrong, if they do indeed decline over the next 3 months then we expect both buyers and sellers to break their holding patterns and housing may begin to move once again.

For Sellers:

While the Greater Phoenix market is experiencing its typical "summer slowdown", marketing times prior to contract have held steady for the past 2 months at a reasonable 21 days. Also holding steady, 41% of closings involving seller-assisted closing costs, with the median cost to the seller at $8,000. Offsetting this statistic is a growing number of sales closing over asking price. June saw 21%, July 22%, and August is pushing 23% so far. In a normal seller's market, this statistic doesn't exceed 18% and typically peaks in June or July. The median amount over asking price for July closings was $6,000, and the majority of sales last month with both seller concessions and a prices over list occurred on properties listed below $600,000.

New home construction is roughly a third of available inventory in the Arizona Regional MLS. While permit activity dropped significantly last year, this year it has bounced back, but not to the same level as 2022. Instead, new single family permits year-to-date are at a level Greater Phoenix hasn't seen since 2017. For existing homeowners, this means the value of their single family home will be sustained as fewer new homes will be added to competing supply. Multi-family permits have outpaced single family and continues to hit new highs. The majority of these units are intended to be rentals, however, and will be adding little competition for existing owners of townhouses and condominiums.

The latest employment report for Arizona showed our state's labor force continued to grow 2.5% year-over-year, faster than the U.S. growth rate of 1.8%. Non-farm employment grew by nearly 72,000 jobs and private sector earnings are up 2.4%. The unemployment rate is just 3.5%, well below the pre-pandemic measure of 4.9% and the lowest unemployment rate for Arizona since 2007. Economic measures for Greater Phoenix continue to support a good housing market for buyers and sellers through this period of restricted demand, and increased activity for the housing industry as a whole if mortgage rates should decline at any time in the near future.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report© 2023 Cromford Associates LLC and Tamboer Consulting LLC

Cindy Nelson is an Arizona native and REALTOR® with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. Cindy is a subscriber to the Cromford Market Report and an active Trusted Advisor University member. 

#azhousingmarket #azrealestate

Cindy Nelson is an Arizona native and REALTOR® with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. Cindy is a subscriber to the Cromford Market Report and an active Trusted Advisor University member. 

For Buyers:

The sharp decline in supply for Greater Phoenix is a good reason for buyers to have a sense of urgency about purchasing a home. Since the beginning of 2023, supply counts have been declining at an average rate of 246 listings per week and since the peak in October, total supply is down 42%. At this rate, the effects of the massive supply surge last year will be erased and the year-over-year change will be negative within 6 weeks. In fact, the Valley could see extremely low supply similar to 2021 and 2022 within 7-8 months if a significant source of supply doesn't emerge.

While permits for new single-family homes dropped by 74% over the last half of last year, they have doubled since December. While that sounds encouraging, the build time for a new home is estimated at about one year. So, as the builders move through their permits and inventory from the first part of last year, there are fewer permits from the latter half to significantly boost new supply for sale going forward this year.

That being said, while prices are rising and recovering from the 2022 decline, they're not spiking right now. This is good news. The appreciation rate since December is considerably more modest than what the market saw from 2020-2022. For perspective, the first part of 2022 saw the median price in Greater Phoenix rise from $425K in December to $470K by May, an average of 2% per month. This year, after declining to $418K in December, the median sales price has risen to just $425K as of this month, which is significantly more sustainable.

Mortgage rate predictions, meanwhile, are trending down. This month, organizations such as the Mortgage Banker's Association, Freddie Mac, Compass Bank and the National Association of Realtors all declared expectations that rates may drop into the mid– to low– 5% range by the end of the year. The last time rates were that low was August 2022, but with the dominance of seller-paid buy-downs today that drop the going rate by 1-3%, and FHA rates that typically run well below conventional rates, a decline in conventional rate to the 5% range could spur a surge in both supply and demand.

For Sellers:

Unaffected by mortgage rates, the market over $1M has seen its 2nd best year in Greater Phoenix so far. May is typically the peak of the market for buyer activity in the top tier price ranges, and after local temperatures top 100 degrees, we tend to see a noticeable slowdown as they flee to cooler climates. Expect to see a spike in luxury homes cancelling or expiring their listings temporarily in June and then re-activate them in the Fall.

If your home is under $600K, you will want to keep an open mind about FHA buyers. Effective January 2023, the loan limit for FHA was raised to $530K and effective March 2023, FHA announced they were reducing the mortgage insurance premiums on their loans from 0.85% of the loan amount to 0.55%. On a $400,000-$500,000 loan, the monthly savings is about $100 off a buyer's payment. Combine that with a 30-year fixed rate that runs from a quarter to a half point below the conventional rate, and that can knock off another $100 from the payment. With a possible $200 savings every month, more well-qualified buyers are choosing FHA over conventional financing. Closings in March under $600K saw 21% of closings involving an FHA loan compared to only 9.5% last May, and that was just the first month the new policy was in effect. Conversely, cash sales dropped from 31% of sales last May under $600K to just 18% in March.

Meanwhile, demand picked up over the last month as supply continued to decline. This means continued upward pressure on price, but at a more moderate pace. The last big cities in Buyer's Markets, Maricopa and Buckeye, are quickly moving towards balance. Average sales price per square foot has stabilized in these two areas and most cities have seen prices turn back up this year. While year-over-year price comparisons have been negative since December, by July or August they could turn back to positive if the current rate of appreciation is sustained.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

Cindy Nelson is an Arizona native and REALTOR® with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. Cindy is a subscriber to the Cromford Market Report and an active Trusted Advisor University member. 

Sale Prices Up 3.5% Since December

For Buyers:

Rates defied industry predictions once again and rose over a point from 5.99% to 7.1% between February 2nd and March 2nd. For the past 4 weeks, rates have hovered in the upper 6% range, figuratively "pinching the hose" on demand during the popular Spring season for buyers. At 9,001, contracts are at their 4th lowest count since 2005, the lowest counts were in 2006-2008 and normal range is 11,000-13,000. Buyers are not the only ones holding back due to higher mortgage rates, sellers are too. New listings added to the Arizona Regional MLS are the lowest ever recorded going back at least 23 years. This may be shocking to some as there has been a 200% increase in supply year-over-year, but last year at this time supply was merely 4,820 active listings. The reality is that ARMLS active supply spiked over 300% last year between March and October, peaking around 20,000 listings. But since then it has declined 27% to 14,772, which is the 4th lowest supply count since 2005 for this time of year. Typically, active listings should be between 20,000-24,000 to be considered normal. In a nutshell, while higher rates have stunted demand for now, they are not expected to stay high forever. If and when they come down, expect demand to increase again. Meanwhile, FHA announced a reduction in the mandatory mortgage insurance premium (MIP), effective this month. FHA mortgage rates typically run about a half-point lower than conventional rates and this further reduction in the MIP could equate to an additional $100 off the monthly payment for borrowers. Combine that with the higher FHA loan limit of $530,150 for 2023, and many first-time home buyers may still find ownership within their reach. The best advice for buyers is to become educated on all the incentives available, from seller-paid rate buy-downs to down payment assistance, while the sellers remain open-minded.
 
For Sellers:

Low-level demand combined with even lower-level supply equals a seller's market for Greater Phoenix. Not a crazy one like the last 2 years, but since coming out of a buyer's market last December sale price measures have stopped dropping and have risen a modest 3.5% so far. Sellers continued to pay for buyers' closing costs on 48% of MLS closings in March, with half paying $9,000 or more. Fewer new listings hitting the market has meant less pressure on sellers to reduce their list price. As a result, weekly price reductions are actually falling instead of rising as they typically would at this time of year. Only 13-14% of inventory issued a price reduction last week compared to 25% of inventory last October. The average negotiation is 97.4% of the last list price this month, an improvement from 96.5% in January and in line with the pre-pandemic market of 2019. Current median days on market prior to an accepted contract is 32 days. Most seasonally-adjusted housing measures are reflective of a weak seller's market similar to 2015 where properties appreciated an average of 4.6% annually. The majority of cities in Greater Phoenix are now in seller's markets. Only 5 cities remain in buyer's markets at this stage. They are Queen Creek, Maricopa, Buckeye, Casa Grande, and Sun City West. The outskirts of town tend to be the first to enter buyer's markets and the last to come out. While these cities are lagging the rest of the valley, their measures have all improved 8-14% over the past month.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

For Buyers:
Last year, traditional buyers took a back seat to an influx of cash investors and speculators who outbid them. Then mortgage rates increased and suppressed their power even more. This was especially prominent in the market under $500K where owner occupant buyers made up just 56.8% of sales in June (normally 70-75%), and investors took 31% (normally 11-17%). As of November, traditional buyers have once again returned to 71% market share under $500K, and investors have retreated under 20%. Investors make up the majority of losses associated with recent price declines. This is great news, especially for first-time home buyers, as prices have come down significantly for starter homes. The median sales price for a 1,400-1,600 sq. ft. single family home has declined from $435K in May to $370K so far in January; a decline of $65,000, or 15%. At today's mortgage rate of 6%, that's a savings of at least $352 per month in payment. This is in line with the overall median sales price, which also declined $65,000 from $475K to $410K. To sweeten the pot, both FHA and conventional loan limits increased for 2023. FHA increased from $441,600 to $530,150, and many lenders began honoring the 2023 loan limit before 2022 ended. As a result, the market share of sales with FHA financing under $500K increased from a low of 11% in March to 20% by November. Many first-time home buyers take advantage of FHA financing as they have softer requirements for approval and their rates are typically lower than conventional loans. Some buyers believe that prices will continue to drop dramatically in 2023 and continue to wait. However, after a brief 4-week Buyer Market from November to December, the ratios of supply to demand are showing Greater Phoenix moving back into a Balanced Market. This means less downward pressure on prices going forward and, if inflation and mortgage rates continue to decline, the worst may be behind us.

For Sellers:
Happening right now is a shift out of the shortest Buyer Market ever recorded by the Cromford Report. The shift is a direct result of the fewest number of listings added to supply in the 4th quarter of the year going back to 2000. Fewer listings mean fewer competitors for sellers. Demand is still very low, but when it's met with low supply there is less downward pressure on price. In November, every region in Greater Phoenix was in a Buyer Market except for the Northeast Valley. By mid-January, Phoenix, Glendale, Mesa, Tempe, Avondale, Gilbert, and Chandler had all come out of Buyer Markets and into Balance, except for Chandler which leapt into a Seller Market. Not far behind are Peoria and Surprise.  The only large cities left in strong Buyer Markets are Goodyear, Queen Creek (including San Tan Valley), Maricopa, and Buckeye. This does not mean that sellers can expect 2021 and 2022 scenarios to come back. Price drops, negotiations, concessions, and rate buy-downs will continue to be the key to keeping buyers in the game this quarter. Currently, 51% of all January sales have involved some form of concession from the seller, with a median cost of $9,854; in line with the cost of a temporary rate buy-down. While Avondale is in a Balanced market, 85392 over the last 30 days showed 14 out of 15 sales with concessions and a median of $12,000 to buyers. In addition to concessions, final sale prices are showing sellers getting an average of 96.7% of their last list price. This is not unusual for a Balanced Market. The luxury market over $1.5M sees fewer concessions, but more price negotiation. January sales so far show sellers closing at an average of 94.5% of their last list price in this segment. Under $500K, sellers are closing at 97.4% of the list price. All in all, the majority of sellers are coming out ahead at closing. 65% of active resale listings have been owned for at least 2 years. The long-term appreciation rates for homes in Greater Phoenix are as follows using January sales to date:  25% for 2yrs., 50% for 3yrs., 63% for 4yrs., 70% for 5yrs., and 86%+ for 6yrs or more.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2023 Cromford Associates LLC and Tamboer Consulting LLC

For Buyers:
­The price reductions keep coming. Last week when mortgage rates hit 7.0%, the Greater Phoenix housing market responded with 4,427 price reductions, 24% of all active properties in the MLS. At least 50% of those dropped their price by $12,000 or more.

September saw 1,372 closings involving seller closing cost assistance to the buyer, equating to 23% of MLS sales, with a median concession of $7,000. This is a 334% increase from last June's count of just 316 sales involving concessions. New home sales through the MLS showed 33% with concessions, and 50% at $10,000 or more. OpenDoor, as a seller, paid concessions on 355 transactions, 77% of their sales through MLS, with 50% costing $6,000 or more.

Closing cost assistance is expected to continue to rise into the 4th quarter as mortgage rates continue to stay high and stifle demand for the time being. Aside from paying the buyer's costs for title insurance, pre-paid taxes, insurance, lending fees, and other closing costs, seller-paid concessions can also be used to buy down a buyer's mortgage rate, if applicable, and ease the pressure on their monthly payment.

For Sellers:
The 4th quarter is expected to be a test for sellers as mortgage rate hikes have reduced contract activity to levels not seen since 2008. Frankly, it's not the best time to sell if you have a choice in the matter. Unlike 2008 however, most sellers today do have a choice and those without an immediate need to sell have chosen to wait. This is reflected in some of the lowest counts of new listings coming on the market recorded at this time of year going back to 2001.

Fewer new listings is a ray of hope for existing properties on the market. If new listings are trickling in and new buyer contracts are trickling out, then overall supply does not spike and cause further downward pressure on price. Thus keeping the market in a delicate balance for now.

Prices hit their peak in May, shortly after mortgage rates hit 5% and before they peaked over 6% in June. Once that happened, buyer demand dropped dramatically and the reflection in prices started to show a trend downward. Now rates are near 7% and sale price per square foot is down 9.6% over the course of 4 months, currently measuring less than 1% higher than January 2022 and representing the elimination of appreciation achieved from January through May.

While this is disappointing to those who purchased this year, 66% of active sellers in the MLS (new homes excluded) have owned their home for 2 years or longer. This means that even with the most recent downturn in price, the 2-year appreciation rate from September 2020 to September 2022 is still 40.3% based on per square foot measures, and the median sale price is $112,000 higher, indicating most sellers have enough equity to shoulder the added costs to sell in this marketplace if they must.

Finally heading into the 4th quarter, expect marketing times to increase as they typically do this time of year. Median days on market prior to contract was 31 days last week. From October through December, active days prior to contract is known to rise anywhere from 44 to 56 days historically, with 50% of listings going longer.

The key words for sellers in this "new" market are condition, price, concessions, and patience.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

This chart shows you the Cromford Market Index (CMI). 

CMI > 110 = Favors Sellers

CMI of 90-110 = Balanced Market

CMI < 90 = Favors Buyers

As you can see, Gilbert is on the cusp of a buyer's market and Surprise and Tempe could follow within days.  This week, just 6 of the 17 largest cities in the Phoenix Metro area are statistically in a seller's market.  Two of those cities, Goodyear and Avondale, could move into a balanced market shortly. 

Overall, the demand for the entire Phoenix Metro area is currently at 81%. Supply is at 65.6%. Supply has increased significantly during the past 3+ months. In late April 2022, supply was at 24% and demand was at 108%.  Higher interest rates are the primary reason demand has fallen. With fewer sales, supply has been able to accumulate.

Bottom Line: Emotions are crashing, not the real estate market. The market is cooling quicker than anticipated partly due to an overreaction to higher interest rates.

For buyers, you finally have more homes to choose from and less competition. Explore your financing options. Ask about loan programs such as a 2/1 Buydown to obtain a lower interest rate. The 2/1 Buydown allows you to take 2% off the current interest rate for the 1^st year, followed by 1% off during the 2^nd year, then the original interest rate resumes thereafter. If interest rates drop, buyers can refinance to lock in a lower permanent interest rate. And the BEST part is many sellers are currently contributing towards the buydown fee. 

For sellers, gone are the days when homes sold over a weekend. Now you can expect to wait about 21 days before you have an executed contract. Of course, it depends on your location and price point among other factors. A conservative pricing strategy typically results in more showings and shorter days on the market. Decluttering and first impressions go a long way. Be prepared to make repairs but don't jump the gun until you confirm which ones will give you the results you're looking for. If you also need to buy a home, there's a great possibility you can purchase a home with a contingency to sell your home first. 

Cindy Nelson is an Arizona native and Realtor with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. Cindy is a subscriber to the Cromford Market Report and an active Trusted Advisor University member. 

CMI of 90-110 = balanced market

CMI > 110 = favors sellers

CMI < 90 = favors buyers

The drop from May 2022 to June 2022 decreased from 385.2 to 272.2 during that time. That's the fastest decline in the history of the Cromford Market Index. This decline was impacted by rising interest rates and increasing supply. 

As you can see, sellers are losing their leverage quickly. This means sellers need to be prepared for longer days on the market, fewer offers, the possibility of having to make buyer-requested repairs and/or offering a credit, and maybe even offering a home warranty.

Buyers, don't be fooled by this weakening Seller's market. While we are presently seeing more list price reductions, this hasn't impacted the purchase price at this time. The gap between supply and demand is still great, so home prices are presently still rising. Now is a great time to take advantage of a loan program with the option to lock in an interest rate prior to finding a home. Also keep in mind, before we reach the point where home prices start decreasing, we must reach a balanced market first. 

While it's not possible to predict where the market will be a year from now, these two reports provide great indicators for what lies ahead in the coming months. 

Cindy Nelson is an Arizona native and Realtor with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. Cindy is a subscriber to the Cromford Market Report and an active Trusted Advisor University member. 

For Buyers:
It's the moment you've been waiting for, less competition and more supply in Greater Phoenix! Active supply is up 40% from this time last year, but all that gain has been achieved over the last 6 weeks with an increase of 45%. This is an enormous change from April's report where supply was only up 16% over last year and still below the count reported on January 1st. As of this report, the supply count is 7,157, still 72% below normal for this time of year but rising quickly.

The annual change in inventory is impressive, but it's the short-term growth that is sending shock waves throughout the market. Inventory listed between $400K-$500K is up 35% in just 3 weeks. Counts in all segments between $500K-$1M are up 99% in 6 weeks and the count from $1M-$1.5M is up 54%, also within 6 weeks. Not all price ranges are rising in inventory. Properties listed below $400K are still flying off the shelves and declining in supply.

The increase in inventory may seem like an early Christmas miracle, but it's not coming from a massive flood of new listings hitting the market. Visualize supply counts as the level of water in a bathtub, with new listings coming through the faucet and accepted contracts going down the drain. The water level can rise if there are more new listings coming through the faucet, or if there are fewer accepted contracts flowing down the drain. In this case, new listings are at normal levels and not excessive, but fast rising mortgage rates have reduced the number of accepted contracts and closed the drain. This is what is causing inventory in the "bathtub" to increase dramatically.

While recent interest rates are disappointing for many buyers, causing some to drop out and wait, history has shown us that they rarely stay high, or low, forever. While it's near impossible to predict when interest rates may begin to decline, if we look over the last decade when interest rates have risen by 1% or more within a year, it has taken anywhere from 1 to 3 years for them to return to their original starting point. Even when rates increased by a whopping 5% over 14 months from 1980-1981, it only took 1.5yrs to drop back to where they started. Future expected interest rate drops over the next few years along with moderate home price appreciation and monthly principal reductions may provide today's buyers the opportunity to lower their payments by hundreds of dollars down the road.

For Sellers:
The market is in the early stage of shifting out of an insane seller market and into a mere frenzy seller market. Before we know it, it could be a regular old hot seller market where properties still appreciate but take multiple weeks to sell, buyers don't waive their appraisal contingency, and sellers happily pay for home warranties. But before all of that happens, it starts with one simple act from a seller, a list price reduction.

As inventory has risen at a fast pace over the past 6 weeks, so have the number of weekly price reductions as sellers compete for fewer buyers. Listings between $400K-$500K have seen a 103% increase, with the median price drop at $13,000. Price drops in $500K-$800K range increased 157%, with median drops between $16,000 and $20,000. Drops in the $800K-1.5M range increased 125%, with a median drop between $25,000 to $50,000.

So far, price reductions have proven effective in keeping the median days prior to contract around 7 days. However, as inventory continues to rise in the coming weeks, price reductions may not be enough to keep some properties from lingering longer in active status, creating more choice for buyers and strengthening their bargaining power.

While the market is still strongly in favor of sellers, it is changing rapidly. For those sellers waiting to sell close the peak of price, this may be the time to list. Prices are still projected to continue rising, but at a slower pace over the next few months.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

Cindy Nelson is an Arizona native and Realtor with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. This includes Phoenix, Gilbert, Mesa, Chandler, Tempe, Apache Junction, Queen Creek, Gold Canyon, Maricopa, Scottsdale, Phoenix, Glendale, Buckeye, Peoria, Surprise, Tolleson, Laveen, Sun City, Sun City Grand, Fountain Hills, Sun Lakes, Goodyear, Litchfield Park, San Tan Valley, Pinetop, Lakeside and Show Low.

For Buyers: 
Does anyone know what a normal, or balanced, housing market looks like anymore?  In Greater Phoenix, the supply and demand indices have only come together twice in the past 21 years to form a balanced market.  First from 2000-2003, then again from 2014-2015.  There have only been two buyer markets recorded during that same time frame, from 2006-2009 (extreme) and a brief 3 months in 2010 (mild).  Seller markets were recorded from 2003-2005, 2011-2013, and 2015-2021. The last 18 months have been extreme to say the least.

Over the past 21 years, Greater Phoenix has been in a buyer market for a combined total of 43 months (3.6 years), a balanced market for 55 months (4.6 years) and a seller market for 155 months (12.9 years).  This is important to discuss because the longer seller markets last, the more human beings change their definition of what "normal" looks and feels like. 

"Normal" for Greater Phoenix is not a balanced market, it's a seller market. The years from 2015-2019 got us used to 2-3 months to sell a home, 15-19% of sales closing over list price, $2,500 over list considered an amazing offer, 25-28% of sales with closing cost assistance and 5-9% annual appreciation.

The last 18 months have shifted our expectations to 1 month to sell a home start-to-finish, 40-60% of sales closing over list price, $10,000 over asking price to start the bid, only 2-3% of sales with closing cost assistance and 27-39% annual appreciation.

So when national analysts suggest the housing market will cool off in 2022, many (if not most) local housing analysts believe it will remain a seller market, but a weaker one.  Prices don't decline in seller markets, but listings may stay active for a few more days before accepting a contract. A full price offer may be enough to win a home. Buyers may have less pressure to waive appraisal and repairs.

However, after the last 18 months of extreme seller market conditions, anything less than sheer lunacy could feel like the sky is falling.

For Sellers:
With all the talk of 2022 predictions and uncertainty, it's important for sellers to stay in the moment and lean into what is known.  The reality of the Greater Phoenix housing market is that supply is 67% below normal and dropping.  Demand is 23% above normal and stable for now.  Until these two indicators start moving towards each other, the housing market will not see prices stabilize. If anything were to negatively affect Wall-Street-financed corporate iBuyers and institutional landlords, then that would cause a shift downward in demand.  That could happen someday, but it isn't happening today.

Even if demand were to decline tomorrow, sale price measures are the last to change in a shifting market. The first thing to go up would be the cost of the sale for the seller.  For example, days on market will increase, list price reductions will increase and then eventually seller concessions will increase before anything is reflected in the final sales price.  The pattern goes like this; homes are on the market longer than expected as sellers push the boundaries on price. If the market resists in the form of zero offers, a price reduction is recorded in response.  If demand dwindles to where only one offer is received instead of multiple offers, more pressure is placed on sellers to offer home warranties, do repairs, or consent to closing cost assistance in order to secure closing at their desired price. None of these indicators appear to be shifting at the moment, but that could change.  The key for sellers in 2022 is to stay on top of current market trends, listen to your REALTOR®, and be the first to shift expectations if buyer demand drops.  A wise REALTOR® once said, "If you can't be with the buyer you love, love the one you're with."

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2021 Cromford Associates LLC and Tamboer Consulting LLC

Watch out Valley drivers! The Interstate-10 Broadway Curve construction project is underway.  The expected completion date is late 2024. The project is intense, so I recommend you check the project website often and sign up for traffic and construction alerts. 

Here are the improvements ADOT is making:

• Widening Interstate 10 to six general purpose lanes and two high-occupancy vehicle (HOV) lanes in each direction between US 60 (Superstition Freeway) and Interstate 17, and adding a fourth general purpose lane in each direction between Ray Road and US 60
•  Adding Collector-Distributor roads parallel to I-10 between Baseline Road and 40th Street to separate through-traffic on I-10 from local traffic entering or exiting the highway
• Rebuilding the I-10 interchange with State Route 143 to improve traffic flow and create direct connections to and from SR 143 for drivers in the I-10 high-occupancy vehicle (HOV) lanes
• Replacing the Broadway Road bridge over I-10
• Replacing the 48th Street bridges over I-10
• Widening the I-10 bridges over the Salt River
• Building two bridges for pedestrians and bicyclists over I-10 between Baseline and Broadway roads (at Alameda Drive and the Western Canal) and improving the Sun Circle Trail crossing at Guadalupe Road
• Building sound and retaining walls where warranted

Source: Arizona Department of Transportation

For project details and to sign up for traffic and construction alerts, visit https://i10broadwaycurve.com/ . 

Good News for Buyers. What's Ahead for Sellers as Demand Weakens.
Median Sales Price Up 29%, Fewer Contracts

For Buyers:
Buyers with budgets over $300,000 may be noticing that they have more listings to choose from compared to a few months ago. This is especially true in the price points between $400,000 and $800,000 where inventory has grown 92% since February. When a buyer has, for example, 4 or 5 homes available that meet their criteria instead of just one, they are less inclined to throw all of their ammunition into one home in order to win it. They may still offer full price or more, but may not be under as much pressure to waive contingencies and
shorten inspection periods.

As this subtle change proliferates with more inventory, the buyer experience will become less stressful. As the median sale price continues to rise, affordability is something to pay attention to. Not what's affordable to you necessarily, especially if you're out of state, but what percentage of the local population can afford your home if you need to sell right away or sometime in the future. A family making the median income in Greater Phoenix could afford 63% of what sold in the 1st quarter of 2021. That was within the normal range of 60-75%, indicating a good time to buy or sell. While we wait until August for the 2nd quarter measures to be released, we expect the new measure to land around 57%, slightly below normal. This does not indicate that the market will plunge into a buyer market causing prices to decline, but it does indicate a reason to expect prices to rise much slower going forward.

For Sellers:
The Greater Phoenix AZ housing market continues to shift from an extreme seller market into a less extreme seller market. As prices continue to rise, more new sellers are motivated to put their home on the market and fewer buyers are able or willing to pay the higher price. Over the next 5 months, give or take, the market is expected to move into a weaker seller market, driven in part by dwindling affordability and buyer fatigue.

The first half of 2021 has been so insane with contingency waivers and exorbitant offers over asking price that many sellers may not know what a normal seller market looks like. Here are a few things to expect: 

• Sales price appreciation will not average 3.1% per month. April 2021 saw prices appreciate 5.1% within 4 weeks. May was 2.3%. June was 1.1%. From 2015-2019, a long-term seller market but much weaker than today, prices appreciated at an average of 0.5% per month with a range between 0.3% and 0.8%.

• There will be more list price reductions. It's important to remember that the sales price is the LAST thing to respond in a shifting market. One of the first things to respond is a list price, in the form of a price reduction. When a seller overshoots what the market can bear, they will get the silent treatment in the form of zero offers. That triggers a price reduction by the seller. Weekly price reductions have risen 112% since mid-February from 317 in a week to 672. In a weaker seller market, expect between 1,500-2,000 price reductions every week.

• Sellers will get their price, but pay more in concessions. If a seller prices their home high in anticipation of excess demand but only gets one offer instead of multiple offers, they are more likely to accept home warranties, do repairs and offer concessions. Currently, the percentage of sales involving concessions is very low at 4%, up from 2.7% the week prior. In 2019, a good seller market, 25% of closed sales involved seller concessions.

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2021 Cromford Associates LLC and Tamboer Consulting LLC

Remember, knowledge is power.  There is a report available that will show you what the median amount paid over list price is (current as of the last 30 days). This is helpful when competing with multiple offers. This is free for the asking - no strings attached. 

As a Trusted Advisor University member and a subscriber to the Cromford Report and MLS, I can provide you with all the data you need to help you understand the current market in the Phoenix area, whether you're buying or selling. Here's how you can reach me ... Cell: 480-535-0060 or E-mail cindy@myeasyhomesearch.com .

Cindy Nelson is an Arizona native and Realtor with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region.

Whether you're in the market for a new home or simply intrigued by the allure of the latest and greatest home decor, there are a few essential considerations to keep in mind before stepping into any model home. I understand that you might be thinking, "Why bother? I have no intention of buying anything." However, it's worth noting that I've encountered several individuals who shared that exact sentiment, opting to take a casual glance. To their surprise, they experienced an instant connection when they stumbled upon their dream home.

So, why not grant yourself the benefit of the doubt and take steps to safeguard your own interests? Whether you're actively house hunting or just satisfying your curiosity, being well-prepared can make all the difference in ensuring you make informed decisions and, who knows, possibly uncovering that perfect home you never knew you were searching for.

Don't be fooled.

First, you need to think about who is representing you before you walk through the door of any model home.  Without your own agent, the builder's agent will assist you, but remember who they are representing. The builder's agents are hired to look out in the best interest of the builder, not yours.  Despite how friendly a builder's agent may be, that won't make any difference. They will always only represent the builder's interests.

Your first visit to a model home is an important one.

When you enter a model home, the builder will require you to register first.  If your agent is not with you at this initial visit, then you waive your right to bring one later. Your agent does not have to be with you on every visit, just the first one.

Does it really matter?

You may be wondering what is the benefit of having your own agent. A dedicated real estate agent has a fiduciary duty to exclusively protect your interests. As your real estate agent, I would advise you throughout the process as well as provide data and resources to help you with your decisions. It's essential to keep in mind that your decisions now may impact the future resale value of your home. This is especially important when selecting your lot and choosing upgrades. Lastly, I'll be by your side for the final walkthrough, offering my assistance when you need it most.

How to handle a spontaneous visit.

Imagine you're out for a leisurely drive, and you decide to stop by a few model homes for a casual look. You may feel that you don't want to "bother" an agent especially if you're just exploring your options or perhaps just curious. However, welcoming your inquiries and explorations is precisely what real estate agents are here for. We genuinely appreciate the opportunity even if it turns out you have no desire other than just dreaming about "the one". At the very least, here's a suggestion I would like to offer.  Give me a call before you step through their doors.  If I am not available to meet you there, there is a possibility I can pre-register you prior to your arrival, even if it's not a planned visit. I will let them know that you have representation.  I will also text you a copy of my business card in case they ask for one. And, of course, I will make plans to meet you there later should your visit become something more than just curiosity.

Bottom Line

When it comes to making what is likely the biggest purchase of your life, always ensure you have a real estate agent accompanying you when you explore any model home. I invite you to reach out to me as your dedicated real estate agent and trusted advisor. Together, we can navigate the journey of finding your dream home, ensuring that your interests are protected every step of the way.

"Hmmm, I wonder what that house sells for?"   "I wish I knew what the inside of this home looks like?"  "Is this a 4 bedroom home?"

The easiest way to retrieve the listing details is by using a FREE phone app available through Realty ONE Group.  This free app pulls the data directly from the MLS listing. It also uses the GPS on your phone, so it's very handy if you're driving around a neighborhood looking for homes for sale.  With this app you can view:

• Photos
• List price
• Square footage
• Home details (# of bedrooms, bathrooms, etc.)
• Property description
• Interior and exterior features
• Property tax information
• Utility information
• And more!

Use the filter to fine-tune your search and save your favorite listings.  It's a great way to track the market and learn about new and reduced-priced listings, too.  You can also find a list of available open houses.  To access this FREE app:

Text ONECINDYNELSON to 855-602-1700 to add this app to your phone.

Cindy Nelson is an Arizona native and Realtor with Realty ONE Group and serves Phoenix Metro and the White Mountain region.