Things are changing quickly in the real estate market.
Following a slump in the final quarter of 2022 after the Federal Reserve spent most of the year raising interest rates, which indirectly caused mortgage interest rates to jump from around 3% to 7% in November, the market has recovered in the past few months.
Things are heating up again. Those still looking for the market to bottom out might have missed their shot.
The average sales price in Maricopa dropped 16%, to $356,000 in December from $427,000 in June 2022. The average sales price fell 1% from December 2022 to March 2023 and that might be the last drop for the near future.
While some builders may have good incentives on completed homes, the base prices on “to be built” homes are rising.
In the Tortosa subdivision, Meritage increased its listing prices by $3,000 in February, and
DR Horton raised prices by an average of $10,000 during the same period. KB Homes hasn’t raised its prices yet but hasn’t lowered prices in six months, either.
Similarly, in the Lakes at Rancho El Dorado neighborhood, Meritage has raised prices about 3% since January, and Centex homes in Santa Rosa Crossing are up $2,000 since March.
Buyers were shell-shocked and hard to locate last fall, but that’s no longer true.
In October, there were 685 active listings on the Multiple Listing Service and by mid-April that number was down to 464, a decrease of 32%. This is not due to sellers pulling their homes off the market, but rather homes going under contract that were listed months ago.
In the first week of April, there were 237 listings with a “pending” status in MLS. This is close to the 253 pending homes in the same week in 2021, a year in which prices increased an average of 3% every month.
In April 2021, there were only 46 active listings, or 90% fewer than we have today. Regardless, inventory is decreasing and that means it’s unlikely that prices will be falling in the future.
Additionally, of the 464 active listings, 278 were new construction, a whopping 58%, meaning that only 186 resale homes were available as of mid-April for a city of roughly 70,000 residents.
The lack of resale homes will inevitably push the new-build prices higher, along with the market in general.
How high remains to be seen.
This story was previously published in InMaricopa Magazine.