2023 Housing Market Analysis & 2024 Predictions

By Jason Penrose

Jason has been licensed since 1999, and is currently one of the top 20 agents in Arizona for homes sold.

As we bid farewell to 2023, let’s take a look at the key highlights of the real estate market as of January 3. The year has seen some interesting trends in housing, and it’s essential to stay informed. Here’s a snapshot of the market:

1. Decrease in active inventory. As of January 3, there are 16,577 homes on the market, compared to 18,222 during the same period last year. This represents a notable 9% decrease in active inventory, indicating a lower number of homes available for sale.

2. Fewer pending homes. There are 5,279 pending homes this year, down from 5,594 last year. This marks a 6% decrease in pending homes, suggesting a slower pace of new transactions in the market.

3. Increased home sales. Despite the decrease in inventory and pending homes, the number of homes sold has gone up. In December, 4,798 homes were sold this year, compared to 4,664 in the previous year, indicating a 2.8% increase in home sales.

4. Reduced months supply of inventory. The supply of inventory stands at 3.1 months, down from 3.5 at the same time last year. This is an 11% decrease in the month’s supply of inventory, highlighting the competitive nature of the market.

What’s driving the market? ** ** One significant factor affecting the market has been interest rates. Rates peaked at 8% in October but have since eased to the high sixes. Lower interest rates have attracted new buyers into the market, but inventory remains historically low. To see a significant change in the market, we would likely need either lower rates or a substantial economic shift, such as a recession leading to more home listings.

Unless there are significant changes, like lower interest rates or an economic downturn, we can expect low inventory to persist in the foreseeable future. If you’re contemplating buying or selling a home, it’s crucial to evaluate your unique situation and market conditions.

If you have questions or need guidance on whether it’s the right time to make a move in the real estate market, please don’t hesitate to call or text us. We’re here to help you navigate the ever-changing landscape of the housing market.