Greater Phoenix Residential Market

FLETCHER R. WILCOX
REALTOR®
Launch Real Estate
4222 N. Marshall Way Ste A
Scottsdale, AZ 85251
602.648.1230
winston8415@outlook.com

Maricopa County #1 for Largest Numeric Population Gain 
Pinal County’s Population Increase Greater than that of 26 States
Revised BINSR and Contract Writing Trends  
Overall Purchase Price Increases   

Maricopa County #1 for Largest Population Gain  

The U.S. Census Bureau released their county population estimates. The period for the estimates is from July 1, 2021 to July 1, 2022. Yes, once again Maricopa County led all 3,144 counties in the U.S. in numeric population increase! According to the Census Bureau Maricopa County’s numeric population increase was 56,831 or 156 people per day. This increase in Maricopa County’s population was greater than that of 41 states for the same time period. See Table One for the top ten counties in the U.S. for numeric population increase.  

Pinal County’s Population Increase Greater than that of 26 States 

Worth noting, is that Pinal County’s numeric population increased by 16,010 from July 1, 2021 to July 1, 2022. This increase was greater than that of 26 states for this period of time!  

Revised BINSR and Contract Writing Trends   

The demand to buy and the supply of homes for sale influences contract language. When rates were very low, demand to purchase was very high. And at the same time supply was low. It was a seller’s market. This led to a multitude of contracts that contained language that had some or all of the following: no inspection period, buyer to not ask seller for repairs, waiver of appraisal contingency, appraisal shortfall, waiver of loan contingency, escalation causes and a few even had the buyer offering the seller a cruise! Now that mortgage rates have doubled, the demand to own has not only decreased, but greatly reduced the aforementioned contract language. In contrast, what has greatly increased are the number of contracts asking for a seller concession or monetary credit. In March 2022, only 14% of sales of single-family resale homes had a seller monetary credit compared to 48% in March of this year. (This is down from 50% in February and 53% in January). 

To negotiate a monetary seller credit, buyers often on the AAR Residential Buyer’s Inspection Notice and Seller’s Response (BINSR) will ask for a seller credit in lieu of repairs. This is not an appropriate use of the BINSR. The BINSR is a notice document. Its purpose is to give notice to the seller of items that the buyer disapproves of, ask for repairs, but not to amend the Contract by asking for a credit or price reduction. To address this misuse, the revised BINSR now includes the following language, Buyer elects to provide Seller an opportunity to correct or address the disapproved items listed below. (Attach an addendum, if applicable.) So, if the buyer is going to ask for a seller credit in lieu of repairs and/or a reduction in purchase price they should execute an addendum and follow the contractual timelines provided for in section 6j of the AAR Residential Resale Real Estate Purchase Contract. The language on the addendum may look like this, “Seller to credit Buyer $9,500 in closing costs or Purchase Price is $500,000.” 

What if the buyer asks for repairs, and not a seller credit, but the seller does not want to make the repairs? The revised BINSR under the SELLER’S RESPONSE section now has this language, Seller’s response to Buyer’s Notice is as follows (Attach an addendum, if applicable). In this case, the Seller would initiate an addendum offering the buyer a monetary seller credit.    

There is something the buyer should be aware of when negotiating a monetary seller credit. If the seller agrees to give a credit, the buyer may be limited in the amount of the credit they can use due to lending guidelines. (See my article published in the previous edition of the Arizona Journal of Real Estate for a chart showing the maximum allowed seller credits for conventional conforming loans, FHA loans and VA loans.) For example, if a buyer puts a down payment of less than ten percent on a conventional conforming loan, the maximum seller credit allowed for their use is three percent of the purchase price. To make the buyer aware of the possibility that the entire monetary credit may not be allowed, the revised BINSR now says, Buyer further acknowledges that if Seller agrees to address the items disapproved by monetary credit or change in Purchase Price, an addendum must be submitted to Buyer’s lender, who may limit or restrict total contractual credits. It is important for the buyer, the lender and real estate agent to understand what is the maximum allowed seller concession that the buyer may use when preparing a contract that involves financing. 

(This article incorporated parts of an article published by the Arizona Association of REALTORS titled REVISED PURCHASE CONTRACT AND BINSR. See this article for more information on the revised Purchase Contract and BINSR). 

March 2023 Results for Single-Family Resale Homes in Greater Phoenix  

• Overall purchase price increases. The March, overall median purchase price for a single-family resale home in Greater Phoenix increased $5,500 or 1% over February. Year-over-Year (YoY) it is down $50,000 or 10%. See Chart One.  
• Sales of single-family resale homes continues to improve. March 2023, sales were 4,930 or 24% less than March 2022, when sales were 6,484. Why is this an improvement? In November 2022, the YoY decline in sales was 46%. Since November, the YoY decrease in sales has improved. November 2022 may be the month that we hit bottom in terms of the YoY decline in sales. Look at Chart Two.  
• Mortgage rates take a dip. According to Freddie Mac, the 30-year fixed mortgage rate on March 30 was 6.32% compared to 6.73% on March 9. 
• The median dollar seller concession in March 2023 was $9,500 compared $3,500 in March 2022. 48% of March 2023 sales had a seller concession compared to 14% in March 2022.  
• The number of March 2023 Notice of Trustee’s Sales (foreclosure notices) were 393. There were 427 in March 2022. In March 2009, there were 10,558.  

• Cumulative days on the market (CDOM) for a single-family resale home in Greater Phoenix were 77 in March 2023 compared to 28 in March 2022.  
• The number of new single-family monthly listings in March 2023 for Greater Phoenix were the lowest in 23 years. There were 5,003 this March compared to 7,059 last March for a decrease of 29%. 
• Table Two shows the median purchase price Year-over-Year and Month-over-Month (MoM) for thirty-three cities located in either Maricopa or Pinal Counties. YoY only Gold Canyon had a higher median purchase price. MoM 15 cities had a higher median purchase price, 6 cities had a decrease, and 12 cities were with 1% of the previous month’s median purchase price.  

Unless otherwise mentioned, the information in this report is for single-family resale homes in Greater Phoenix. The information was compiled from the Arizona Regional Multiple Listing Services, Inc., and The Cromford Report.

Table One: Top Ten Counties for Numeric Population Increase 

Chart One 

Chart Two 

Table Two: Median Purchase Price for 33 Cities