Greater Phoenix Residential Market

June 2023 Results
Purchase Price Continues Its Rise
Least Number of Sellers Listings Homes Since the Year 2000
Revised Additional Clause and Buyer Contingency Forms
By Fletcher R. Wilcox

June 2023 Results for Greater Phoenix Single-Family Resale Homes 

The median purchase price in June ($505,000) was $15,000 or 3% higher than May 2023 ($490,000). This is the highest month-over-month (MOM) increase since May 2022 when it increased $15,000. This is the fourth consecutive month of its rise. Year-over-year (YOY) the median purchase price was $24,000 or 4.5% lower than June 2022 ($529,000). 

Price per square foot in June ($305.91) was $6.92 or 2.3% higher than May 2023 ($298.99). YOY price per square foot was $11.1 or 3.5% lower than June 2022 ($317.01).  

Sales in June (4,701) were 510 or 9.7% less than May 2023 (5,211) and 544 or 10.3% less than June 2022 (5,245) sales.  

New monthly listings in June (4,519) were 311 or 6.4% lower than May 2023 (4,830). June listings were considerably lower than last year at this time. Listings this June were 4,267 or 48.5% lower than listings in June 2022 (8,786).   

Total active listings on June 30, 2023 (6,380) were 230 or 3.4% less than May 31, 2023 (6,610) and 2,762 or 30% less than June 30 2022 (9,142).   

Months of supply on July 1, 2023 was 1.4 months compared to 1.8 months on July 1, 2022.  

Cumulative days on market (CDOM) decreased in June 2023 (61) compared to May 2023 (66). In June 2022, CDOM were 27. 

Percent of closings with a seller concession in June (41%) is lower than May 2023 (43%) but much higher than May 2022 (12%). The number of June closings with a seller concession of $5,000 or more was 1,113; $10,000 or more 615; $20,000 or more 119 and $50,000 or more 11.   

Notices of Trustee’s Sales or foreclosure notices in June (294) was just a little higher than May 2023 (279) and about identical to June 2022 (293). The number of Notices of Trustee’s Sales in June 2009 were 8,564. 

The number of properties foreclosed on in June (29) was so very low. The number of properties foreclosed on In May 2023 (56) was also very low.  

Median monthly rent for a single-family home in Greater Phoenix decreased in June ($2,350) from May 2023 ($2,395). Median monthly rent in June was $35 or 1.5% higher than June 2022 ($2,315).   

The thirty-year fixed mortgage rate went up in June. It averaged 6.7% in June 2023 compared to 6.4% in May 2023.  

Results for Thirty-Five Cities Located in Either Maricopa County or Pinal County  

Table One compares thirty-five cities for year-over-year monthly listings and sales. It also compares the median purchase price year-over-year and month-over-month. Year-over-year, 34 cities had less new listings and 29 cities had less sales. Year-over-year 31 cities had lower median purchase prices, while month-over-month 16 cities had a gain in the median purchase price.  

A Recent History of the Greater Phoenix Residential Market  

A colleague, Jim Zirbes, sent me his comment on the Greater Phoenix residential market. He said “Fletcher it’s a seller’s market; it’s changed to a balance market; hold on, it’s a buyer’s market; no, wait – it’s a seller’s market again…and all within the last 12 months.” This statement says a lot when trying to figure out which way our residential market is trending.  

This is what we do know about the Greater Phoenix single-family resale market. This market was so hot In May 2022, that the median purchase price (MPP) for a single-family resale home reached an all-time high ($540,000). In the same month, the thirty-year fixed mortgage rate reached 5.25%. This was two percentage points higher than at the beginning of 2022. The rising mortgage rate was a shock to potential buyers. Over the next several months, the thirty-year fixed mortgage rate continued its ascension, reaching over 7% in October 2022. The thirty-year fixed mortgage rate had not been this high for twenty years. At the same time mortgage rates were ascending, sales and MPP were descending. The number of sales in the fourth quarter of 2022 were the lowest number of sales for a fourth quarter since 2007.  

By December 2022 the MPP was down to $458,000. A drop of $82,000 or 15% since May. Driving the MPP down was the decrease in demand (sales) and an increase in supply (active listings). In October 2022, there were 10,600 active listings up from 5,600 in May 2022.   

Then a funny thing happened. The MPP started going up as inventory went down and potential buyers came to town. In the first half of 2023, the number of sellers listing their homes for sale was the lowest number for a first half of a year since the year 2000. Thus, overall active listings of single-family resale homes dropped to the 6,600 range from 10,600 in October.  Also, in the first quarter of the year there was an influx of potential buyers (winter visitors and those who came to see the Superbowl). By June 2023, the MPP ($505,000) had increased $47,000 or 10% since its low point in December.  

Overall, we have a resilient residential market. It is fueled by net migration and job growth. According to the U.S. Census Bureau in their last report, Maricopa County gained more people than any other county in the U.S. And according to the Arizona Commerce Authority more people are employed in Maricopa County today than ever before.  

I am optimistic.   

Revised Additional Clause and Buyer Contingency Forms  

The following was taken from an article published in the Arizona REALTORS ® Voice. 

Additional Clause Addendum 

A new clause was added to the Additional Clause Addendum to assist wholesale buyers and wholesale sellers in a residential real property transaction to disclose their wholesaler status as required by law.  

In September 2022, a new law became effective which requires wholesalers to disclose their wholesaler status in writing prior to entering a binding residential real property contract. See A.R.S.§ 44-5101.  

A “wholesale buyer” is a person or entity that enters a purchase contract for residential real property as the buyer and assigns that same contract to another person or entity. A “wholesale seller” is a person or entity that enters a purchase contract for residential real property as the seller, that does not hold legal title to that real property and that assigns that same contract to another person or entity.  

Pursuant to the statute, if a wholesale buyer fails to make the required disclosure in writing, the seller may cancel the contract at any time prior to the close of escrow without penalty and may retain any earnest money paid by the wholesale buyer. Similarly, if a wholesale seller fails to make the required disclosure in writing, the buyer may cancel the contract at any time prior to the close of escrow without penalty and shall be refunded all earnest money.  Therefore, the use of this new clause in the Additional Clause Addendum is extremely important when representing a wholesale buyer or seller.  

Additional revisions to the Additional Clause Addendum include changing the name of the “Waiver of Appraisal” provision to “Appraisal Contingency Waiver,” which more accurately describes the provision and minor changes to the Non-Refundable Earnest Money clause for clarity. 

Buyer Contingency Addendum 

The Buyer Contingency Addendum is for use when the buyer and seller agree to make the Residential Resale Real Estate Purchase Contract (“Contract”) contingent on either the closing of a pending sale of the buyer’s property or upon an accepted offer for the buyer’s property.  

The previous versions of the Buyer Contingency Addendum contained an automatic cancellation if the buyer did not accept an offer, or the pending sale of the buyer’s property did not close by the date specified. In other words, the form did not provide the buyer an option to waive the contingency and proceed in the transaction towards Contract close of escrow (“COE”) in such an event.  

The form was revised to allow the buyer three days after the time specified for the closing of the pending sale of buyer’s property or for accepting an offer to purchase the buyer’s property, to waive the buyer’s contingency in the manner required by the Contingency Waiver Provision contained in the form. To waive the contingency, the Contingency Waiver Provision requires the buyer to provide: 

• written documentation from buyer’s lender that buyer can close escrow by the COE date without the sale and closing of buyer’s property; or 
• in the event of an all- cash sale, evidence of buyer’s financial ability to close escrow by the COE date without the sale and closing of buyer’s property. 

Additional revisions were made to further clarify the contingency terms and arrange the information into a more easily understandable format. Instructions and section numbers were also added to the form for clarity. 

Table One: June 2023 Results for 35 Cities by The Wilcox Report™ 

Chart One: The Rise, The Fall, and The Rise of the Median Purchase Price by The Wilcox Report™