9 min read Feb 06, 2024

Arizona Real Estate Market: Predictions for 2024

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Edited By

Megha Mulchandani

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Editor
Edited By

Megha Mulchandani

Editor, Houzeo
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Megha M. is a content editor who loves to play with words. Apart from this, she is a theater artist and a public speaker who transforms into various personas on stage.

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Arizona homes continued to sell at eye-popping prices last month. The median home sale price rose 6.7%% year-over-year from $405,900 to $433,200 in January. The number of homes sold also increased by 5,693 homes to 5,780.

But homes sold above the list price up by 14% and there are only 4 months of supply left! Is Arizona still a seller’s market? Let’s look at the facts.

Phoenix homes sold for a median sale price of $430,000 in January, up 6.4% year-over-year. Homes in Flagstaff sold for a more than median sale price of $657,500, a 12.7% increase year-over-year. In fact, there were no markets in Arizona where prices declined year-over-year except Buckeye and Prescott.

Interest rates are at record highs, with few home buyers. But the inventory is so low that 14% of homes sold above the list price!

  • If You Are a Home Buyer: You can avoid bidding wars and avail seller concessions if you buy a home now. The 7.28% interest rate and mortgage payments are significant, but rates are unlikely to drop in the next few months. If they do, you can refi.
  • If You Are a Home Seller: You can lock in Arizona’s high home prices. Homes listed on MLS sell faster and for 17.5% more than off-MLS homes. That could be thousands of dollars in additional proceeds if you sell via Houzeo.

The current Arizona real estate market statistics don’t reflect the national trend of high demand and low supply. Home sales and property prices in Arizona increased despite 2023’s slow market.

So, How Is the Real Estate Market in Arizona?

Swell! Home values in Arizona rose by 56% in the last 5 years. Home sales increased by 1.5% in January 2024 YoY despite the mortgage rate climbing to 7.28%! So, Arizona’s housing market is strong, if not bullish.

Even if mortgage rates continue to increase alarmingly, home sales will not falter. So, if you want to sell your Arizona property, now is the right time to list it on MLS.

👉 List Your Arizona Home for Sale: Would-be buyers and buyer agents scour the MLS for turnkey properties. Start your listing for FREE!

Arizona Real Estate Market Statistics

  • Average Home Prices: The average median home price in Arizona is $433,200, up by 6.7% YoY. In 2024, experts predict the median sale price will increase due to the tight inventory. Currently, the sale-to-list price ratio is at 97.9%, with an increase of 0.7 pt YoY.
  • Home Sales: As per January 2024 data, home sales increased by 1.5% YoY! In January 2024, 5,780 homes were sold, up from 5,693 in January 2023.
  • Average Rent Prices: Rental costs vary statewide. An average tenant in Phoenix pays $1,534, while the one living in Flagstaff pays $1,996.
  • Median Days on Market: The median days on the market for homes for sale was 60 days, down by 11 days YoY.
  • Pending Sales: The number of homes for sale dropped by 4.9% YoY compared to 2022. Currently, there are 33K homes for sale in Arizona.
  • Months of Supply: The average month of supply is 4 month. Arizona’s inventory won’t last long if interest rates drop. It is worse than the national housing market.

Arizona Housing Market Predictions 2024

Arizonans have survived the shockwaves of skyrocketing mortgage rates and rising home prices of 2023. Here’s what we predict for Arizona’s housing market:

  1. Home Sellers Will Return to the Market in 2024: Sellers who chose the sidelines in 2023 will come back. Especially those who can’t avoid new jobs or want to move to a cheap place. Whitney, the analyst who predicted the 2008 financial crisis accurately, has forecasted that baby boomers looking to downsize will also add up to 30 million housing units. Yowaza!
  2. Mortgage Interest Rates Will Stabilize by the 2nd Half of 2024: Mortgage rates hit 7.79% in October 2023, the highest level in 23 years. However, the rate dropped to 7.35% in November due to the softening labor market and slowing economy. Even the annual inflation rate went from 3.7% to 3.2%. We think the rates will remain above 6%, but they will stabilize in the second half.
  3. The Number of Home Buyers Will Rise: The historically high interest rates averted buyers in 2023. But mortgage demand rose after the interest rates lowered to 7.35% in November. The easing inflation and stabilizing rates will bring back house hunters.
  4. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across AZ YoY, reaching $433K in January 2024. Experts predict home prices will continue to rise until the low supply-high demand dynamic changes.
  5. New Home Construction Sales Will Increase: New home construction sales in Arizona are expected to increase in 2024 by 3.5%, which is higher than the national average of 2.5%. Arizona’s housing market is in high demand owing to a growing population, and a shrunken housing inventory
  6. iBuyers Will Continue to Make Lowball Offers: iBuyers offered 104.1% of market value in 2021. They offered 86% in 2022 and around 70% in 2023. Opendoor and Offerpad have lost billions of dollars in 2023. As they struggle to survive, they will make lowball offers.
Bonus Prediction: Buyer Broker Commissions Will Be Negotiable!

In a shocking turn of events, the jury in Missouri awarded more than $5 billion in damages to the Sitzer-Burnett plaintiffs. This motivated nationwide home sellers to file grievances against NAR’s Cooperative Compensation Rule.

NAR’s Cooperative Compensation Rule or Participation Rule states that listing brokers must offer competitive compensation to buyer agents if they want to list properties on an NAR-affiliated MLS.

Sitzer/Burnett v. NAR

The Bombshell Lawsuit that Could End Buyer Agent Commissions

Start Your MLS Listing NOW!

Lawsuits like Moehrl, Gibson, Batton, Nosalek, and Batton 2 challenge the Participation Rule. They accuse NAR and other top real estate companies of colluding and conspiring to keep agent commissions high.

If the jury also finds the defendants guilty in these cases, buyer agent compensation may change. Buyer agents may become obsolete by 2025! Phew.

While buyer agents are unlikely to be obsolete in 2024, they may be open to negotiating commissions. That’s probably how they will still have some skin in the game.

When Will the Housing Market Crash in Arizona?

A housing market crash in Arizona is unlikely.

Arizona a Copper state has a thriving economy, with strong job growth in a sector, including technology, healthcare, and tourism. The state is also home to a number of Fortune 500 companies, including Freeport-McMoRan, UnitedHealth Group, and Bank of America.

Queen Creek, Arizona’s fastest-growing city, has experienced significant job growth driven by its proximity to major employers like Intel and Phoenix-Mesa Gateway Airport. This growth has been observed across diverse sectors, including technology, healthcare, and manufacturing.

Arizona’s job market remained strong in 2023, with an unemployment rate of 3.7% in January, slightly below the national average. Added over 20,000 new jobs in the healthcare, technology, and tourism sectors. Economists predict that the state will add over 25,000 new jobs in 2024, and the unemployment rate is expected to remain low.

Arizona is an affordable state to live in. The cost of living in Arizona is close to the national average. This makes the state a great option for people who are looking for a place to live that is both beautiful and affordable., So it is unlikely that Arizona’s housing market would crash anytime soon.

2024: Is it a Buyer’s or Seller’s Market?

2024 will be a terrific market for sellers. (And buyers, too!)

Home prices in Arizona are rising and will continue to rise till the supply-demand dynamic changes. The number of houses for sale in AZ was 32,604 in January 2024. There is very limited inventory to satiate the demand from house hunters. This also makes it the best time to sell a house in Arizona.

In fact, after the mortgage rate plummeted from a two-decade-high rate of 8% to 7.28% in November, new listings rose. This shows that those who refused to sell due to mortgage rate lock are finally acclimatizing to 7% rates. Come Spring 2024, more homeowners will follow suit and list properties on Arizona MLS.

The increase in new home listings in Arizona has also brought back home shoppers who were hugging the sidelines. In fact, the recent uptick in mortgage applications shows that buyers are returning.

House hunters who could not find affordable homes in 2023 will also start shopping in 2024. The demand for Arizona houses will increase – and that’s why sellers may be able to dominate the market.

However, new builds will compete for attention from buyers. Home builders have persuaded buyers to buy new construction homes with mortgage buydowns worth $30K in 2023! Builders will continue offering concessions in 2024, and home sellers may have to wage wars against them.

Listings of new constructions, baby boomers looking to downsize, and desperate home sellers will flood the market in 2024. The properties for sale in Arizona will increase. So, whether you are looking for a condo in Phoenix or a single-family primary home in Flagstaff, you will find your dream home next spring.

Find Your New Home With Houzeo

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

Frequently Asked Questions About Arizona Real Estate Market

Is the housing market going to crash in Arizona?

Not for the next few years. Arizona's housing market will not crash in 2024. Despite 2023's skyrocketing interest payments and soaring home prices, Arizonans have managed to keep the market afloat.

What are the real estate housing market 2024 predictions?

2024 will be a stellar market for Arizonans. Here's our 2024 forecast for Arizona housing market are: (1) Home sellers will return to the market come Spring 2024. (2) Number of houses for sale will increase (3) Property prices in Arizona will increase marginally (4) Mortgage rates will stabilize in the latter half of 2024 (5) iBuyers will buy homes for lower than their fair market value. (6) Buyer agent commissions will be negotiable!

Are home prices dropping in Arizona?

No, the property prices in Arizona were up by 6.7% YOY in January 2024. However, you can still find some of the cheapest places to live in Arizona. With a 56% rise in the past five years, exploring budget-friendly cities is crucial amid the current scarcity of available properties in AZ.

Is it a good time to buy a house in Arizona?

Yes! Currently, there are very few buyers in the market compared to the supply of homes in Arizona. The soaring interest rates has kept buyers at bay, so you can avoid bidding wars. As the mortgage rate stabilizes in 2024, more buyers will return, so we'd recommend you to buy a house now. If mortgage payments burn a hole in your pocket, you can always refinance.

» Best Time to Buy a House in Arizona: Find out the best time to buy a Arizona property & plan your finances accordingly.

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