Phoenix Metro Area Market Update – June 2019

June 13, 2019

Phoenix Metro Area Market Update – June 2019

Residential real estate in the greater Phoenix metro area continues to see price appreciation! This is driven by modest personal pay increases and falling interest rates, which have declined throughout 2019 since peaking in early November of last year at 4.94% (Freddie Mac). Current 30-year conventional loans are 3.82% with .5 points. (Fannie Mae, June 2019). Further, the Federal Reserve is now forecasting a drop in rates through next year with many Wall Street analysts predicting three reductions of ¼ point each over the next 12 months.

Why the Change in Rate Forecast?

Late last year, signs of a significant slowing in the U.S. (and global) economies began to emerge. The Gross Domestic Product (GDP) had slowed, and forecasts were predicting continued slowing over the next several months.  Also, the U.S. found itself in a significant trade dispute with China (and for a brief time, Mexico), and trade disputes are almost never good for global economic growth.  With the economy significantly slowing, the Fed announced its intent to change its forecast of approximately three interest rate increases to taking a “wait and see” position.

Today, analysts are predicting rates in 2020 to be flat to slightly down: (Reuters) – The U.S. Federal Reserve is done raising interest rates until at least the end of next year (2020), according to economists in a Reuters poll who gave a 40 percent chance of at least one rate cut by end-2020.

So What Have These Lower Rates Done to Our Housing Market?

In the Phoenix Metro Area, the average sale price per sq. ft. is currently $172.11, which is up 4.8% from last year. The June median home price is $278,000, up 4.9% from last year. Active listing are up 5.3%, and closed sales are up 3.6%, which tells us that the supply of homes for sale is greater right now than it was this time last year!

Price Appreciation…

On a final note, whether buying or selling, please keep in mind that our market is not monolithic.  Price ranges and neighborhood locations will vary in performance, often significantly.

For the $150,000 to $225,000 range, expect annual appreciation rates to be between 6%-10%.  For homes that sell for $225,000-$500,000, appreciation is expected to be between 3%-5% and those selling over $500,000 appreciation is expected to be between 1%-3%. (Cromford Report, June 2019).

The above chart highlights the current appreciation rates and compares to what it was last year. As you can see, Phoenix is ranked #9, with a 7.1% appreciation rate; and our beloved Queen Creek is ranked #1, with 10.7%. As always, if you have any questions at all about current market trends, please feel free to give us a call! To view the Phoenix Metro Area Market Update for last month, click HERE.

We are full-time, experienced Realtors working in Queen Creek and the surrounding areas.  With decades of East Valley real estate experience under our belts,  we are here to answer any questions you may have.  Please do not hesitate to reach out to Karen Berg at 602.919.2375 or April Anderson at 480.272.1977.
We’re looking forward to hearing from you soon!

–Karen Berg and April Anderson

United Brokers Group
21321 E Ocotillo Rd F113
Queen Creek, AZ 85142

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