PHOENIX — All over the Valley, a growing number of "for sale" signs signal a change in the housing market.
According to data from the Cromford Report, there is a 156% increase in the number of homes on the market compared to last year.
According to RE/MAX, Phoenix saw the largest increase in the number of homes for sale this year.
"That is something we have not seen in a very long time," said Tina Tamboer, a senior housing analyst with the Cromford Report.
The increase in available homes is the most the Valley has seen since before the Great Recession.
"We are in a market that seems to be balancing out," Jeremy Fierstein, a real estate agent with West USA Realty, said.
Fierstein said the changes seemed to happen suddenly after the Federal Reserve began to raise interest rates.
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Earlier this year, multiple offers and bidding wars over available homes were relatively common. Fierstein indicated that is changing as more homes have rushed onto the market.
"Everyone is trying to get in and cash in on the end of the seller's market," Fierstein said.
“Once interest rates got over five percent, that’s when we saw a very rapid increase in supply,” Tamboer said. “It’s so unusual. I have not seen it in my career. And I've been following the market since 1993.”
According to Tamboer, most of the homes on the market do not belong to your traditional family. Instead, the majority are either new construction or owned by companies like Opendoor and Offerpad.
"I would say most of the inventory we are seeing is coming from an investor base," Tamboer said.
WHAT DOES IT MEAN FOR HOUSING PRICES?
Housing prices will likely flatten or see a slight decline in the near future.
According to the Cromford Report, the median home price dropped from $480,000 in May to $460,000. However, Tamboer said median price drops are normal during the summer in Arizona because of a slow down in the luxury market.
The days of the average home getting multiple offers over list price are likely gone for now. Instead, experts say it will be more of a return to the pre-pandemic housing market.
"It’s really important for buyers to understand that the market has changed so quickly they need to shift their mindset as well."
Tamboer said. "The people who realize the market has shifted first will be the ones who win."
ARE WE IN A BUYER'S MARKET?
No, we still have a long way to go.
While the inventory has increased rapidly, Tamboer said we are not back to what is considered a "balanced" market supply.
According to MLS, Arizona has just over 16,000 homes listed. Tamboer said "balanced" is somewhere over 20,000. For comparison, during the height of the great recession, Tamboer said there were around 57,000 homes listed on MLS.
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