Following December holidays, buyers flooded the real estate market in January. Unfortunately, they were met with low inventory levels and with that, limited homes to choose from in markets across the country. While many are hoping for relief from the seller’s market we experienced in 2021, high demand and low inventory will likely lead to another year of large increases in home value. Experts predict that interest rates will increase in 2022. As a result, the market may cool off slightly later this year. But we likely won’t return to a completely balanced market and sellers will continue to have the upper hand.
January proved a competitive start to 2022 for buyers. But ultimately, every market is different. No one has a crystal ball to perfectly predict the future. Our experts see the market likely remaining hot across the country, fueled by high buyer demand.
All stats below are based on End of Month in December vs January:
Phoenix Housing Market
Supply and Demand: In January, there were 4 weeks worth of housing inventory available, the same amount we saw in December.
Median days on the market – In January houses spent an average of 8 days on the market, the same number we saw in December.
New homes on the market – In January, there were 8,498 new homes on the market, an 21% increase from the 7,008 new homes we saw in December.
Homes sold – In January 6,693 homes sold, a 28% decrease from December’s 9,307 homes sold.
Despite cooler January temperatures, the Phoenix housing market is hotter than ever. Median list price is up 30.3% year over year, and prices are projected to continue increasing. This is largely due to investor demand in the Phoenix area, and traditional buyers largely outnumbering active listings. While inventory did increase slightly in January, it was not a large enough increase to keep up with buyer demand.
Tucson Housing Market
Like Phoenix, Tucson is a popular location for real estate investors. This means in many cases that traditional buyers are likely competing with an investor’s cash offer, making winning a home difficult. With that, median sales price increased 27.5% overall in 2021. This, coupled with the only 1 month’s worth of inventory in the market makes being a home buyer in Tucson very difficult.
No one can predict exactly what 2022 will look like for sellers in this real estate market. However, the current data shows spring of 2022 will see similar trends to 2021 as sellers continue to have the upper hand in this market. Home values will continue to rise as demand outpaces supply. But with that, keep in mind that buyers are becoming more selective in some cases. So, it’s important to ensure you don’t overprice your home initially, as this could ultimately hurt your bottom line. Home values will continue to increase, but interest rates will likely increase as well. At Trelora, our expert agents recommend selling now, before this increase takes place in order to get top dollar for your home. You can get started today with a free home valuation.
Here are a few blogs that might help you as a seller:
- How Real Commissions Impact Home Equity
- Assessed Value vs. Market Value: What’s the Difference?
- How to Sell Your House Fast
Many buyer’s paused their home search over the holidays, and reentered the market in January prepared with financing and ready to make competitive offers. As a result, January saw an influx of new buyers competing for a limited number of active listings. Thus, making this one of the most competitive months yet to win a home. As talk of a rise in interest rates increases, buyer’s are feeling the urgency to make a purchase as soon as possible. However, a rise in interest rates likely means a decrease in competition amongst buyers. This could be good news for buyers who choose to stay in the market despite an increase in rates. It remains essential that buyers are prepared with financing before making an offer on a home. With that, working with an agent who specializes in your local market can give you the competitive edge you need and help you understand how to make your offers more competitive.
Here are a few blogs that might help you as a buyer:
- Buying a House For Sale By Owner
- Contingent vs. Under Contract: What’s the Difference?
- What Does Escrow Mean in Real Estate & How Does it Work?
Please note, if you buy with us, we split our buyer’s agent commission with you and give you back up to $6,000, and if you sell with us, we give you comprehensive, expert service for only 1%. And keep in mind, especially if you’re moving or you have friends in other states, that Trelora can help you in Atlanta, Charleston, Charlotte, Denver, Los Angeles, Phoenix, Raleigh, Sacramento, Seattle and Tucson. In the meantime, please stay healthy and safe.
Brock Embree joined Trelora in 2017. In 2018, he was part of the founding team that opened Trelora’s Seattle, Washington office, their first expansion beyond Colorado. In 2020, he repeated the process, opening yet another new market for Trelora in Arizona. His team has closed over 200 deals in Phoenix and has expanded to serve Tucson in addition to their growing customer base in Phoenix.