Buyers gain upper hand in Valley housing market

Axios

2 days ago

It's a homebuyer's market nationally — if you can afford it — and in few places is that truer than the Phoenix Valley.
The big picture: There are nearly 500,000 more sellers than buyers in the U.S. housing market, Redfin estimates.
Why it matters: That's the widest gap on record — and a big reversal from just a few years ago, when buyers were desperate to find a place to live, sending prices into the stratosphere, Axios' Emily Peck reports.
By the numbers: There are 33.7% more sellers than buyers now. At no other point since Redfin began tracking in 2013 have sellers outnumbered buyers by such a large percentage.
A year ago, sellers outnumbered buyers by 6.5%, and two years ago, buyers outnumbered sellers.
Context: Redfin counted sellers as the number of active listings in a given area and created a model to estimate the total buyers.
Zoom in: Sellers outnumber buyers in the Phoenix area more than almost anywhere in the U.S.
There are twice as many sellers (about 32,400) as buyers (nearly 16,200) in the Valley.
Where it stands: The one-two punch of still-soaring home prices and mortgage rates is making it hard for buyers, especially first-timers, to find a place they can afford.
Add to that the extreme economic uncertainty of 2025. Tariff news, layoff fears and, for many federal workers, layoff realities, are tamping down buyer demand.
Yes, but: For homesellers "the mortgage rate lock-in effect is easing," per Redfin. "For most people, it's not realistic to stay put forever; job changes, return-to-office mandates and divorce force people to move."
Elevated mortgage rates are becoming the norm. "The idea of taking on a higher mortgage rate also isn't as shocking as it was when rates first skyrocketed in 2022."
Between the lines: Buying a home remains out of reach for most Americans, as the National Association for Realtors pointed out in a recent report.
The median home price sold in the U.S. in the first three months of this year was $417,000, per federal data — 33% more than during the same period in 2019, before the housing market went haywire, outpacing inflation and incomes.
Tina Tamboer, senior housing analyst with The Cromford Report, told the Arizona Republic that home prices could drop 3%-5%, but people shouldn't expect "big, bold movements" anytime soon.
The other side: Mark Stapp, executive director of the Master of Real Estate Development program at Arizona State University, was skeptical that there are twice as many sellers as buyers in metro Phoenix.
He said there are about 26,000 houses currently for sale in the Valley, which doesn't count new homes.
"The market is still out of whack to some degree, and it hasn't corrected itself. We need five or six months of inventory for this to be a real buyer's market," Stapp told Axios, saying there's about 3.6 months of inventory now.
Home prices aren't falling, they're just getting more realistic compared to the high prices sellers had been seeking, he said, and we're likely to see modest increases of about 3% in the Phoenix area.
What to watch: Historically, when sellers outnumber buyers, prices drop. And in some markets, listings have already started falling.
Redfin believes prices will dip 1% by the end of the year (not exactly a huge discount, to be sure).