Arizona Real Estate Market: Will Sellers Dominate the Market in 2024? (2024)

Arizona homes continued to sell at eye-popping prices last month. The median home sale price rose 4.6% year-over-year from $433,100 to $434,700 in September. The number of homes sold also decreased by 1,348 homes to 7,339.

But homes sold above the list price up by 20% and there are only 2 months of supply left! Is Arizona still a seller’s market? Let’s look at the facts.

Phoenix homes sold for a median sale price of $440,000 in September, up 2.33% year-over-year. Homes in Flagstaff sold for a more than median sale price of $630,000, a 7.8% increase year-over-year. In fact, there were no markets in Arizona where prices declined year-over-year except Buckeye and Prescott.

Interest rates are at record highs, with few home buyers. But the inventory is so low that 20% of homes sold above the list price!

• If you are a home buyer: You can avoid bidding wars and avail seller concessions if you buy a home now. The 8.5% interest rate and mortgage payments are significant, but rates are unlikely to drop in the next few months. If they do, you can refi.
• If you are a home seller: You can lock in Arizona’s high home prices. Homes listed on MLS sell faster and for 17.5% more than off-MLS homes. That could be thousands of dollars in additional proceeds if you sell via Houzeo.

The current Arizona real estate market statistics does reflect the national trend of high demand and low supply.Home sales and property prices in Arizona increased despite 2023’s slow market.

So, How is the Real Estate Market in Arizona?

Sluggish! Home values in Arizona rose by56%in the last 5 years.

But, home sales decreased by 39% in September 2023 YoY. Maybe due to the mortgage rate climbing to a two-decade high of nearly 8%! And the number of houses for sale in AZ was29,635in the month, 39% less than in 2022. Arizona’s housing market isbearish.

The decrease in home sales can be attributed tonot having enough properties in Free State. The month of supply is 2 months, which makes AZ a seller’s market. So, if you want tosell an Arizona property, now is the right time to list it on MLS.

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ArizonaReal Estate Market Statistics

• Average Home Prices: The average median home price in Arizona is $434,700, up by 0.4% YoY. In 2024, experts predict the median sale price will increase due to the tight inventory. Currently, the sale-to-list price ratio is at 98.1%, with a decline of 0.6 pt YoY compared to September 2022.
• Home Sales: As per September 2023 data, home sales decreased by 39% YoY! In September 2023, 7,339 homes were sold, down from 8,687 in September 2022.
• Average Rent Prices: Rental costs vary statewide. An average tenant in Phoenix pays $1,558, while the one living in Flagstaff pays $1.968.
• Median Days on Market: The median days on the market for homes for sale was 41 days, up by 5 days YoY.
• Pending Sales: The number of homes for sale dropped by 39% YoY compared to 2022. Currently, there are 41K homes for sale in Arizona.
• Months of Supply: The average month of supply is 2 month. Arizona’s inventory won’t last long if interest rates drop. It is worse than the national housing market.

Arizona Housing Market Predictions 2024

Arizonans have survived the shockwaves of skyrocketing mortgage rates and rising home prices of 2023. Here’s what we predict for Arizona’s housing market:

1. Home Sellers Will Return to the Market in 2024: Sellers who chose the sidelines in 2023 will come back. Especially those who can’t avoid new jobs or want to move to a cheap place. Whitney, the analyst who predicted the 2008 financial crisis accurately, has forecasted that baby boomers looking to downsize will also add up to 30 million housing units. Yowaza!
2. Mortgage Interest Rates Will Stabilize by the 2nd Half of 2024: Mortgage rates hit 7.79% in October 2023, the highest level in 23 years. However, the rate dropped to 7.35% in November due to the softening labor market and slowing economy. Even the annual inflation rate went from 3.7% to 3.2%. We think the rates will remain above 6%, but they will stabilize in the second half.
3. The Number of Home Buyers Will Rise: The historically high interest rates averted buyers in 2023. But mortgage demand rose after the interest rates lowered to 7.35% in November. The easing inflation and stabilizing rates will bring back house hunters.
4. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across AZ YoY, reaching $408K in September 2023. Experts predict home prices will continue to rise until the low supply-high demand dynamic changes.
5. New Home Construction Sales Will Increase: New home construction sales in Arizona are expected to increase in 2024 by 3.5%, which is higher than the national average of 2.5%. Arizona’s housing market is in high demand owing to a growing population, and a shrunken housing inventory
6. iBuyers Will Continue to Make Lowball Offers: iBuyers offered 104.1% of market value in 2021. They offered 86% in 2022 and around 70% in 2023. Opendoor and Offerpad have lost billions of dollars in 2023. As they struggle to survive, they will make lowball offers.

Bonus Prediction: Buyer Broker Commissions Will Be Negotiable!

In a shocking turn of events, the jury in Missouri awarded more than $5 billion in damages to the Sitzer-Burnett plaintiffs. This motivated nationwide home sellers to file grievances against NAR’s Cooperative Compensation Rule.

NAR’s Cooperative Compensation Rule or Participation Rule states that listing brokers must offer competitive compensation to buyer agents if they want to list properties on an NAR-affiliated MLS.

Lawsuits like Moehrl, Gibson, Batton, Nosalek, and Batton 2 challenge the Participation Rule. They accuse NAR and other top real estate companies of colluding and conspiring to keep agent commissions high.

If the jury also finds the defendants guilty in these cases, buyer agent compensation may change. Buyer agents may become obsolete by 2025! Phew.

While buyer agents are unlikely to be obsolete in 2024, they may be open to negotiating commissions. That’s probably how they will still have some skin in the game.

When Will the Housing Market Crash in Arizona?

A housing market crash in Arizona is unlikely.

Arizona a Copper state has a thriving economy, with strong job growth in a sector, including technology, healthcare, and tourism. The state is also home to a number of Fortune 500 companies, including Freeport-McMoRan, UnitedHealth Group, and Bank of America.

Queen Creek, Arizona’s fastest-growing city, has experienced significant job growth driven by its proximity to major employers like Intel and Phoenix-Mesa Gateway Airport. This growth has been observed across diverse sectors, including technology, healthcare, and manufacturing.

Arizona’s job market remained strong in 2023, with an unemployment rate of 3.4% in October, slightly below the national average. Added over 20,000 new jobs in the healthcare, technology, and tourism sectors. Economists predict that the state will add over 25,000 new jobs in 2024, and the unemployment rate is expected to remain low.

Arizona is an affordable state to live in. The cost of living in Arizona is 10% below to the national average. This makes the state a great option for people who are looking for a place to live that is both beautiful and affordable., So it is unlikely that Arizona’s housing market would crash anytime soon.

2024: Is it a Buyer’s or Seller’s Market?

2024 will be a terrific market for sellers. (And buyers, too!)

Home prices in Arizona are rising and will continue to rise till the supply-demand dynamic changes. The number of houses for sale in AZ was 16,216 in September 2023. There is very limited inventory to satiate the demand from house hunters. This also makes it the best time to sell a house in Arizona.

In fact, after the mortgage rate plummeted from a two-decade-high rate of 8% to 7.35% in November, new listings rose. This shows that those who refused to sell due to mortgage rate lock are finally acclimatizing to 7% rates. Come Spring 2024, more homeowners will follow suit and list properties on Arizona MLS.

The increase in new home listings in Arizona has also brought back home shoppers who were hugging the sidelines. In fact, the recent uptick in mortgage applications shows that buyers are returning.

House hunters who could not find affordable homes in 2023 will also start shopping in 2024. The demand for Arizona houses will increase – and that’s why sellers may be able to dominate the market.

However, new builds will compete for attention from buyers. Home builders have persuaded buyers to buy new construction homes with mortgage buydowns worth $30K in 2023! Builders will continue offering concessions in 2024, and home sellers may have to wage wars against them.

Listings of new constructions, baby boomers looking to downsize, and desperate home sellers will flood the market in 2024. The properties for sale in Arizona will increase. So, whether you are looking for a condo in Phoenix or a single-family primary home in Flagstaff, you will find your dream home next spring.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

Frequently Asked Questions about Arizona Real Estate Market

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Arizona Real Estate Market