Market Update March 4th, 2024

The dynamics of the housing market in Maricopa and Pinal Counties exhibit a clear trend favoring new home sales over re-sales. In January, the number of new homes sold across these regions underscored the robustness of the new home market. A total of 1,507 new homes were closed, marking a significant increase of almost 14% from the 1,324 transactions recorded in January of the previous year. This uptick in new home sales contrasts sharply with the performance of the resale market, which has seen a decline.

The re-sale market, encompassing single-family homes, townhouses, and condos, has not fared as well. In January, the Multiple Listing Service (MLS) re-sales in Maricopa and Pinal Counties totaled 2,950, a decrease of 5% from the figures in January 2023. This downturn is notable as it represents the lowest monthly total in over a decade. Such statistics highlight a shift in buyer preference, possibly due to factors such as the appeal of modern amenities, customizable options in new homes, or the overall perception of value in newly constructed properties.

The disparity between new home sales and re-sales becomes even more pronounced when examining the data from Pinal County alone. The MLS re-sales in this region experienced a significant decline of over 19%, dropping from 299 in January 2023 to just 241 in January 2024. This decrease in re-sales starkly contrasts with the flourishing new home market within the same county. New home sales surged from 341 in January of the previous year to 413 in January 2024, reflecting a robust growth of 21%.

These contrasting trends between new home sales and re-sales in Maricopa and Pinal Counties underscore a changing landscape in the real estate market. The buoyancy of the new home market, evidenced by its consistent growth and the declining interest in re-sales, suggests a shift in consumer preferences and market dynamics. Buyers seem increasingly inclined towards new constructions, possibly driven by the lure of modern features, the prospect of lower maintenance costs, or the desire for homes that meet contemporary lifestyle demands. This shift has significant implications for developers, realtors, and prospective homeowners, highlighting the need for a strategic approach to navigating the evolving real estate environment.

Central Phoenix and many other sub-markets are victims of the new builds as there are many homes built around the 1950s period that just can't handle today's modern wants from buyers. A lot of 3 bed 1 bath floorplans just won't cut it. Hard spot for flippers as well as they know much of existing inventory can't just be flipped, needs to be completely torn down and built new. Lots of developers shying away right now from that while this housing market sits in limbo.

"In the middle of every difficulty lies opportunity."
– Albert Einstein

Have a great week everyone!