November 2022 Phoenix Real Estate Recap

November 2022 Phoenix Real Estate Recap

To make the right choices for your investments, you need to know where the market is heading. A lot can change in a month in a fast-moving real estate market, which is why we have collected the top news you need for your real estate investments.

From Home Sales, New Builds, and Rentals, here is the top information you need to make your next real estate investment in our November 2022 Phoenix Real Estate Recap.

Home Sales Dip Across the Nation

The latest S&P / Case-Shiller® Home Price Index® numbers were published, and they cover home sales during the period July to September 2022. This means they now fully reflect the weakening in the market during the third quarter.

Compared with the previous month’s series we see the following changes:

  1. Chicago -0.59%
  2. Cleveland -0.69%
  3. New York -0.71%
  4. Atlanta -0.75%
  5. Washington -0.87%
  6. Tampa -0.91%
  7. Minneapolis -0.96%
  8. Miami -1.01%
  9. Charlotte -1.13%
  10. Detroit -1.20%
  11. Portland -1.25%
  12. Boston -1.57%
  13. Los Angeles -1.82%
  14. Denver -2.00%
  15. Dallas -2.06%
  16. San Diego -2.11%
  17. Phoenix -2.16%
  18. Las Vegas -2.44%
  19. San Francisco -2.90%
  20. Seattle -2.93%

Phoenix has dropped from 15th to 17th place and remains below the national average, which was -1.01%. All 20 cities are in negative territory month to month and the Southeast has started to decline faster.

Comparing year over year, we see the following changes:

  1. Miami +24.6%
  2. Tampa +23.8%
  3. Charlotte +17.8%
  4. Atlanta +17.1%
  5. Dallas +16.3%
  6. Las Vegas +12.9%
  7. Phoenix +12.6%
  8. Cleveland +10.6%
  9. New York +10.6%
  10. Chicago +10.0%
  11. San Diego +9.5%
  12. Denver +9.3%
  13. Boston +8.8%
  14. Los Angeles +8.8%
  15. Detroit +8.0%
  16. Portland +6.7%
  17. Minneapolis +6.5%
  18. Washington +6.5%
  19. Seattle +6.2%
  20. San Francisco +2.3%

San Francisco and Seattle are at the bottom of this table too, and it looks as though San Francisco could be the first of the 20 to go negative on a year-over-year basis.

Permit Counts

Single-Family Building Permits dropped in October for Maricopa and Pinal to record lows. This is the lowest monthly total since February 2015. It is also down 53% from October 2021. The single-family permit count year-to-date is 24,442 which is lower than all years from 1996 to 2006.

Despite the dip in single-family building permits, multi-family permits in Maricopa and Pinal have increased. The construction of multi-family units is at 15,925 units a year to date as of October 2022. This is up more than 30% over this time last year. 2022 will be by far the strongest year ever for multi-family unit permits.

Rental Growth Streak Ends

As the real estate market becomes more balanced, so has the rental market across the nation. Rentals remain in high demand, despite growth streaks coming to an end, but still earmarked positive growth for rental sectors.

Asking rents across the U.S. finally ended a non-stop growth streak in October, falling 0.1% month-over-month and marking the first monthly decline in two years. In Phoenix, the average rent dropped to $1,938, a 0.53% month-over-month decrease, according to a study by Redfin.

In Year-Over-Year Growth We See The Following For Phoenix:

  • The average rental property, in real dollars, was $1,034 in 2017. Today it’s $1,537 — and that’s expected to rise to $2,475 in five years if demand continues to outpace supply.
  • The median sale price for a Phoenix home rose from $325,000 in January 2021 to $404,300 by October 2021, a 24.4% increase.

Phoenix Becomes A Buyer Market

From October to November 2022, the supply-demand index dipped further into the buyer’s market range of the Cromford Market Index. With the latest Cromford Market rank of 88.8, Phoenix has dipped into a buyer’s market. (Cromford market index ranks under 90 representing a buyer’s market, with 90-110 representing a balanced market, and ranks over 110 showing a seller’s market).

This market change can be seen in the supply and the overall demand decrease across the nation. The latest S&P / Case-Shiller® Home Price Index® numbers were published today, covering home sales during the period July to September 2022.

Summary

While the market currently favors buyers, we have seen the mortgage rate dip back down, making it easier for buyers to purchase homes, if they can find a  home. Despite slower activity for home sales, new single-family builds, and rental activity, the market remains active for those with multi-family investments, and other rental options

Real estate investors now need to be vigilant for their next investment, and make sure they play their cards right to have a successful flip or rental.

November 2022 Phoenix Real Estate Recap

  • Home Sales Dip Across the Nation
  • Permit Counts
  • Rental Growth Streak Ends
  • Phoenix Becomes A Buyer Market

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