The market is made up of supply and demand. When supply is low and demand is high, prices increase. When supply is high and demand is low prices decrease. Then there is everything in between.As of today, supply in the Phoenix Metro Area is struggling to stay afloat. Economists disagree on the reasons why but this is my opinion:
Supply is remaining low because there's tons of money in the market right now. Investors are flocking to real estate as a safe bet because of the 20+% appreciation we have had the last couple of years.
Demand has decreased 5% in the last 30 days and 14% since January. This will show up in the late summer/fall timeframes.
We expect to see demand to continue to decrease because not only is appreciation currently raising home values by an average of $11,000 PER MONTH but the average mortgage interest rate has increased by 1.75% in just 3 months with the Federal Reserve indicating that they will most likely continue to raise the baseline interest rate through the rest of this year in response to rising inflation.As demand decreases due to buyers not able to qualify, supply will start to increase and prices will slow. How fast this all happens is a guess in anyones book. My guess is it will take over a year before prices stop increasing. Do they decrease? That's an unknown as of now.
In summary:
Demand is decreasing, supply is starting to increase. If you are thinking of selling, this may be the best market to do it in. If you are buying, be aware that this will most likely be a longer term hold...AND...
...We still encourage anyone that is renting, to buy. Even in this market. Why? Because you take control of your future instead of at the whim of increases in rent, or a landlord deciding to sell the home that you are in and reacting to someone else's decision on your life vs being proactive financially in your life. You can do it and our team can help!