Your May 2023 Housing Market Update: What Does the Future Hold?

By Jason Penrose

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

What’s going on in our housing market as of May 2023? Let’s take a look at the latest numbers and find out.

Currently, there are 15,346 homes on the market, compared to 12,983 available last year, representing an 18.2% increase. Additionally, there are 6,107 homes under contract, a 15.2% reduction from last year’s 7,212. The number of homes sold this May is 7,298, showing an 8% decrease compared to 7,928 last year. The month’s supply of inventory is 1.6 months this year, up from 1.2 months last year, indicating a 33% increase.

Overall, we have approximately 20% more homes for sale, 15% fewer homes under contract, and an 8% decrease in homes sold compared to the same month last year. Despite this, inventory remains low with only a 1.6 months supply, indicating that it is still a seller’s market from a supply standpoint.

<div class="pullquote">“You might want to make a move soon; we don’t know what the future holds.”</div>

Buyer demand is currently at around 85% of normal, as interest rates hover around 7%, making it challenging for some buyers to qualify or purchase their desired properties. Moreover, sellers who have locked in low interest rates on their homes are reluctant to sell unless necessary. Unfortunately, some homeowners who purchased homes within the last 12 to 24 months with minimal down payments, such as FHA or VA loans, find themselves upside down on their mortgages, hindering their ability to move.

In many cases, these homeowners opt to rent out their properties and wait for the market to improve. Consequently, the limited inventory available for sale is influenced by both hesitant buyers and sellers holding onto lower interest rates or dealing with negative equity.

To address this situation, lower interest rates could stimulate more buyers to qualify and potentially lead to higher housing prices, benefiting sellers who are underwater. However, unforeseen factors such as increased unemployment could also impact the supply and demand dynamics in the next six to 12 months.

Overall, the current real estate market remains robust, with approximately 15,000 homes for sale and nearly 7,000 homes under contract. If your home is not selling, it may be worth considering adjusting the price or evaluating other factors. Feel free to contact me at (602) 738-9943 or send me an email to discuss further. Have a fantastic day!