Following a brief dip, the Phoenix housing market is once again showing signs of life, with experts predicting a price surge in the upcoming year. Data from the latest S&P CoreLogic Case-Shiller Indices, reported by the Business Journal, reflects a modest month-over-month home price decline of 0.3% in Phoenix, while still noting a 2.5% year-over-year increase in November. This shift marks a significant trend reversal after a series of previous declines.
"The streak of nine monthly gains ended in November, setting the index back to levels last seen over the summer months," Brian D. Luke, head of Commodities, Real & Digital Assets at S&P DJI, shared with ABC15, leaving Phoenix among the majority of markets witnessing the cooldown. Nevertheless, Selma Hepp, chief economist at CoreLogic, observed a second month of annual gains after a previous eight-month downturn.
Real estate professionals are witnessing a robust turnaround that seems to be outstripping initial expectations. Greg Hague, CEO of 72SOLD, told the Business Journal, "A sudden surge in pent-up homebuyer demand has caused the Phoenix housing market to rebound robustly since the first of the year." Last week's near 2,000 home sales starkly contrast with November's weekly average of 1,000 to 1,200.
Despite the current high 6% interest rates, multiple offers are starting to emerge for reasonably priced listings, indicating a solid buyer appetite. Highlighting an astounding 43% increase in homes under contract in just four weeks since January, Hague projects that "Phoenix metro home prices will rise by roughly 10% in 2024." Observers have also taken note of the rising inventory, yet it's the buyer demand that outpaces it dramatically, suggestive of a continued upward trend, especially in the first half of the year.
The greater Phoenix area's economic resilience, in light of the real estate memories of the 2008 crisis, is being tested. Andrew Turley, president of Phoenix Valuations, suggested to the Business Journal that potential buyers who were previously hesitant are now more confident. "As the market has not 'gone off a cliff,' people psychologically are thinking: 'OK, the fundamental underwriting is strong, values aren't rapidly depreciating, rates will likely not go back to 2%-3% in the near future, now might be a good time to buy," Turley explained, reinforcing the notion of incoming stability and possibly declining interest rates.
