Arizona Real Estate Market Update for September 2024: Trends, Insights, and Opportunities

Every month, I take the time to personally craft this update to bring you real, actionable insights. This is not just another generic newsletter filled with automation or outsourced content—it’s my way of keeping you informed and empowered with knowledge you can use. Let’s dive into what’s happening in Arizona's housing market for September 2024.

Housing Market Trends in Arizona – September 2024

We’re starting to see subtle yet significant signs of improvement in Arizona's housing market, primarily driven by lower mortgage rates. Listings under contract are up 2.5% from last year, a crucial change, considering the last year-over-year increase happened in January.

However, active listings are rising too, meaning many new buyers are also sellers, and the move-up market is where most activity occurs. While this is great news for those upgrading, the overall Arizona market index is still trending downward. So, while we’re seeing some progress, the housing market remains far from a full recovery.

How Falling Mortgage Rates Are Impacting Arizona's Market

When the Federal Reserve cut its benchmark rate by 50 basis points, many anticipated mortgage rates would follow suit. But instead, mortgage rates edged up slightly, mainly because they are influenced by the 10-year Treasury bond yield, not the Fed's rate.

This highlights how unpredictable mortgage rates can be. People often try to time the market, hoping for lower rates or political changes to impact their decisions. However, the reality is that the housing market is less affected by politics than many think. For example, while the rate cut made Arizona real estate more affordable for foreign buyers by weakening the dollar, this shift had more to do with economic fundamentals.

Buyers Are Gaining Leverage in Arizona

As buyers gain more leverage in negotiations—especially in lower and middle price ranges—the real estate market is slowly shifting. Though still moderate, buyers are starting to have the upper hand, especially in cities like Fountain Hills, which posted a 10% market index increase, and Paradise Valley, which surged ahead with an impressive 25% gain.

Other cities showing slight improvements include:

• Buckeye
• Scottsdale
• Cave Creek
• Surprise
• Glendale

However, cities like Phoenix and Mesa have seen market index declines, along with Avondale, Chandler, and Peoria.

Struggles in the Outer Edges of the Arizona Market

The outer edges of the Arizona market are seeing the most significant struggles. Cities like Coolidge, Arizona City, Tonopah, Eloy, and Florence are among the weakest performers. On the flip side, 55+ communities are seeing mixed results, with Sun City and Sun City West showing modest gains of 1.7%, while Sun Lakes held steady with a 4.6% rise.

Opportunities for Savvy Home Buyers in Arizona

Did you know that recessions often signal a housing market rebound? After more than two years of sluggish sales, both buyers and sellers are beginning to re-enter the market.

Historically, home prices have remained stable, and mortgage rates tend to decline during recessions. According to Arizona’s employment report, private sector earnings rose by 7.3% year-over-year, outpacing both inflation and home price growth. This presents an excellent opportunity for buyers as higher incomes, lower rates, and stable home prices create a favorable environment.

Buyers should take advantage of increased listings in cities like Phoenix, Scottsdale, and Peoria. With less competition and more homes available, the next few months could provide the perfect window to buy.

Why Now is the Time to List: Sellers Seize Opportunities

September and October are the last big months for home sales before the holiday season kicks in. Homes currently stay on the market for around 33 days before securing an offer. So, if you’re planning to sell, now is the time to list and ensure your home stands out from the competition.

For homes under $2 million, lower mortgage rates are expected to drive demand. However, the luxury real estate market—especially homes priced over $2M—may see slower sales as 55% of these transactions are cash deals, unaffected by mortgage rates. Nevertheless, September luxury listings are performing better than in previous years.

Debunking the Myth of Political Impact on Arizona Real Estate

As we approach the November elections, it’s natural for people to wonder if political outcomes will affect the housing market. However, the truth is that presidential elections have little impact on home sales.

Looking at historical data, we can see that home sales in election years tend to follow typical market patterns:

• 2004 and 2020 saw stronger sales than non-election years.
• 2012 and 2016 aligned with normal trends.
• 2000 and 2008 had weaker sales, though both coincided with recessions.

The reality is that home sales are driven more by life events—like family changes, job relocations, and estate matters—than by political decisions.

FAQ: Frequently Asked Questions about the Arizona Housing Market

Q: How is the Arizona housing market performing in September 2024?
A: The Arizona housing market is showing signs of improvement, with a 2.5% increase in listings under contract compared to last year. However, active listings are also rising, making this a buyer-friendly market.

Q: What are the best cities to buy a home in Arizona right now?A: Cities like Phoenix, Mesa, Avondale, Chandler, and Peoria are seeing market declines, making them ideal for buyers looking for better negotiating power and opportunities. While Fountain Hills and Paradise Valley are seeing positive market gains, which are more favorable for sellers, buyers may find good options in cities with downward trends in the market index.

Final Thoughts: Stay Focused on the Bigger Picture

As always, stay focused on the long-term picture. Real estate is a long-term game, and trying to time the market based on fleeting trends or political events often leads to missed opportunities. Focus on sound strategies and the fundamentals that drive long-term success in real estate.

If you’re looking to buy or sell in Arizona, don’t hesitate to reach out. The market may fluctuate, but a solid plan is always key to building and preserving wealth through real estate.