2023 Phoenix Area Home Prices (Glendale: waterpark, appliances, house)
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Yeah the link you provided is a realtor site - not the cromford public site. Many realtors, including me, subscribe to Cromford to provide that info to their clients. It's not meant to be posted publicly without a subscription. They have June 2007 online -
What's needed is scary headlines. Rest assured, the media is good at overselling partial truths. IMO, inflation will continue until we get a recession. Until you see doom and gloom headlines (the media is an early indicator), I suspect inflation will remain high. I say, bring on the awful medicine sooner than later.
The "awful medicine" has already become reality in the form of the recent bank failures. There were many factors at play, and I'm pretty sure we're going to hear about bad management & criminal allegations, but one of the things which contributed to the collapse was the interest rate hikes. The Fed's reaction to inflation has been largely kneejerk (much like the government reaction to COVID). Inflation is obviously not going away with the higher interest rates. This is a credit nation, and people will continue to borrow money they don't have, but it's becoming more difficult to pay back. Interest rates needed to be raised, but now the Fed is overdoing it. Makes me wish we could return to the Gold Standard.
The "awful medicine" has already become reality in the form of the recent bank failures. There were many factors at play, and I'm pretty sure we're going to hear about bad management & criminal allegations, but one of the things which contributed to the collapse was the interest rate hikes. The Fed's reaction to inflation has been largely kneejerk (much like the government reaction to COVID). Inflation is obviously not going away with the higher interest rates. This is a credit nation, and people will continue to borrow money they don't have, but it's becoming more difficult to pay back. Interest rates needed to be raised, but now the Fed is overdoing it. Makes me wish we could return to the Gold Standard.
I've been listening to a lot of podcasts on the topic. Banks were warned with clarity a long time ago about what was going to happen to interest rates. Personal responsibility is dead in this country. And that includes the millionaires wanting ALL of their money back when they didn't bother paying attention to the insurance limit laws. And you are right, a lot of bad management & criminal allegations will come of this. Including (I predict) lazy regulators. That's what happened during the last crisis. I'd love to see some people locked up. But how top bankers went to prison last time? Answer: 2 https://www.nytimes.com/2014/05/04/m...al-crisis.html
Big picture, the FED's raised the rates again. Rising rates are factually slowing down inflation. With some bonus consequences. Powell is trying to kill the jobs and drag down demand so that businesses have to drop their record-high profit margins https://thehill.com/business/3756457...igh-inflation/
I've been listening to a lot of podcasts on the topic. Banks were warned with clarity a long time ago about what was going to happen to interest rates. Personal responsibility is dead in this country. And that includes the millionaires wanting ALL of their money back when they didn't bother paying attention to the insurance limit laws. And you are right, a lot of bad management & criminal allegations will come of this. Including (I predict) lazy regulators. That's what happened during the last crisis. I'd love to see some people locked up. But how top bankers went to prison last time? Answer: 2 https://www.nytimes.com/2014/05/04/m...al-crisis.html
Big picture, the FED's raised the rates again. Rising rates are factually slowing down inflation. With some bonus consequences. Powell is trying to kill the jobs and drag down demand so that businesses have to drop their record-high profit margins https://thehill.com/business/3756457...igh-inflation/
Most large businesses have way more then 250k in a bank account. SVB customers were mostly business's that is why they had a run most were over 250k. Roku was one of them had $487 million in SVB Bank of its 1.9 billion in cash. https://www.cnn.com/2023/03/10/busin...ash/index.html
The FDIC will pay back those uninsured over time as the FDIC sells assists of the bank. I'm sure most fortune 500 companies have millions of cash in banks that are uninsured. The 250k insurance is for the common man so it protects against a 1929 scenario that is why in 2008 congress had to bail the banks out.
I've been listening to a lot of podcasts on the topic. Banks were warned with clarity a long time ago about what was going to happen to interest rates. Personal responsibility is dead in this country. And that includes the millionaires wanting ALL of their money back when they didn't bother paying attention to the insurance limit laws. And you are right, a lot of bad management & criminal allegations will come of this. Including (I predict) lazy regulators. That's what happened during the last crisis. I'd love to see some people locked up. But how top bankers went to prison last time? Answer: 2 https://www.nytimes.com/2014/05/04/m...al-crisis.html
Big picture, the FED's raised the rates again. Rising rates are factually slowing down inflation. With some bonus consequences. Powell is trying to kill the jobs and drag down demand so that businesses have to drop their record-high profit margins https://thehill.com/business/3756457...igh-inflation/
If the government (and this crosses political lines) is going to make exceptions to the 250k rule this should be spelled out. Giving SVB a pass just pisses people off.
Are all uninsured deposits now covered by government guarantees?
No. The regulators said they were making an exception for SVB and Signature. The SVB action was taken in consultation not only with many regulators but also with President Biden—indicating the unusual nature of their move. Signature was similarly protected under a “systemic risk exception” to backstop its uninsured deposits.
That is a power that was used during the 2008 financial crisis. Measures such as this can be controversial, with some arguing that it creates what is known as a “moral hazard”—that by letting banks or their customers know the government will backstop them in a crisis, they will think less about risks.
So regulators might have to walk a fine political line: indicating strength and decisiveness to stem further bank runs, but not looking like they are granting a free pass to banks. https://www.wsj.com/articles/were-ba...nment-6b0a582f
An update from the Cromford report. For those of you who do not know, the Cromfort report isn't "sales speak". Rather, an accurate assessment of the state-of-the-state. So far, those who have been predicting a PHX metro crash were looking at the wrong crystal ball.
__________________________________________________ _______________________________ 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 buydowns 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."
__________________________________________________ _________________________________
From May 2022 (ultra peak times) to May of 2023, closings are down by 10% but a snapshot of the inventory is up 80%. Looking at all price points combined and all areas, we are still down by 9.6%. But as this article predicted, the upward trend will continue over the next 7 months. In my little pocket of the Valley, mine went UP from 2020 to May 2022 by 70%. I'm still down by around 12% from that ultra-hot market in the Spring of 2022. But I am still up several hundred thousand dollars.
As we all know, events in the country and the world can change what is going on fairly fast. Those in the doom-and-gloom camp have been categorically wrong with their PHX metro housing predictions. I'm not surprised.
I know two friends that intentionally sold their homes last spring at peak and are renting with the intention to re-buy "post-crash". Yea, they sold at peak all right. But they incurred selling fee expenses. plus they are renting, have storage fees, and are living out of partially packed boxes, etc. No thanks!
Last edited by MN-Born-n-Raised; 05-25-2023 at 05:32 AM..
An update from the Cromford report. For those of you who do not know, the Cromfort report isn't "sales speak". Rather, an accurate assessment of the state-of-the-state. So far, those who have been predicting a PHX metro crash were looking at the wrong crystal ball.
__________________________________________________ _______________________________ 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 buydowns 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."
__________________________________________________ _________________________________
From May 2022 (ultra peak times) to May of 2023, closings are down by 10% but a snapshot of the inventory is up 80%. Looking at all price points combined and all areas, we are still down by 9.6%. But as this article predicted, the upward trend will continue over the next 7 months. In my little pocket of the Valley, mine went UP from 2020 to May 2022 by 70%. I'm still down by around 12% from that ultra-hot market in the Spring of 2022. But I am still up several hundred thousand dollars.
As we all know, events in the country and the world can change what is going on fairly fast. Those in the doom-and-gloom camp have been categorically wrong with their PHX metro housing predictions. I'm not surprised.
I know two friends that intentionally sold their homes last spring at peak and are renting with the intention to re-buy "post-crash". Yea, they sold at peak all right. But they incurred selling fee expenses. plus they are renting, have storage fees, and are living out of partially packed boxes, etc. No thanks!
The price drop did not materialize because the recession did not materialize. (and maybe more importantly, the fact that homeowners can not economically justify selling their ultra low interest homes). Unemployment is still near 50 year lows and inflation is subsiding. Will it stay that way? Will the debt ceiling crash the economy? Will the interest rate increases result in a hard, soft, glide, landing? It ain't over yet.
And we still have the problem that if homeowners can't afford to move because of rates and first time buyers remain priced out, where does it go from here? Weak demand implies falling prices - ultimately.
The price drop did not materialize because the recession did not materialize. (and maybe more importantly, the fact that homeowners can not economically justify selling their ultra low interest homes). Unemployment is still near 50 year lows and inflation is subsiding. Will it stay that way? Will the debt ceiling crash the economy? Will the interest rate increases result in a hard, soft, glide, landing? It ain't over yet. .
Correct. It's not over yet. But it is NEVER over. Russia just needs to bomb the nuke plant in Ukraine or China invades Taiwan and the cards will be reshuffled. we always are a big even away from something. Still, the doom-and-gloom folks didn't calculate people refusing to list or that unemployment would remain so strong or ___________ or ____________ or and ____________. Hence, they were wrong (that was my point). I didn't see a "crash" like the guy screaming the loudest on the internet. But he is still selling the crash. lol
The Cromford's crystal ball for PHX real estate is suggesting that the 10% drop (May 22 to May 23) will be erased in the coming months. That's surprising to me as I assumed the summer would kick off another round of softening. But the lower rates are keeping it alive. This news is a shot in the kahunas for the people who sold their home in order to time a crash.
Quote:
Originally Posted by Ponderosa
And we still have the problem that if homeowners can't afford to move because of rates and first time buyers remain priced out, where does it go from here? Weak demand implies falling prices - ultimately.
As you suggested, the people hurt the worst are the price-sensitive, 1st time-home buyers. Both the buyers who paid top $$'s as well as the current people dreaming of a new place at high rates. As reported a couple of months ago, the starter home market is taking the biggest hit. I predict the people starting out and who are buying have parents gifting them $. In fact, a quick google shows the percentage of gifting for mortgages is around 28% https://www.bankrate.com/mortgages/g...0of%20Realtors..
Big picture, the demand is pretty darn high. That's why the prices are going UP again.
I don't see inflation softening at all IMO it's getting worse from the price increases I have seen in the last month. We buy same items grocery shopping, and recently several of the items gone up $1.5 to $2.5 just in the last 45 days.
The only way the FED is going to get it under control is to do what was done the early 1980's and raise rates well over 15% to trigger a recession. The FED policy so far has been ineffective.
People rather not sell in this kind of market with little supply prices climb higher and higher. The only way out of this is to increase unemployment.
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Powell is trying to kill the jobs and drag down demand so that businesses have to drop their record-high profit margins 
