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See all 3 interactive graphs here.

The bottom line is the Phoenix real estate market remains strong but not crazy. The outlook for 2018 is for it to continue to be strong.

Home Prices

Looking at all homes sold, including condos and townhouses, the median home price was $242,000 in July, 8% above July 2016 and 14% above July 2015.

New Listings

The number of homes that hit the market in July was down 1% compared to July 2016 and down 5% compared to July 2015.

This is a huge topic in the real estate world, not only in Phoenix but nationally, “Why aren’t there more homes for sale?”.

The lowish amount of new listings is a key to the low inventory of homes for sale and the strong price gains.

Homes for Sale

Looking at single-family detached homes (SFD), the number of homes for sale in July was down 9% (Yikes!) compared to July 2016.

That helps explain the strong (8%) price gains.

But the number of homes for sale this July was similar to the number 2 years ago in July 2015 so the change this year isn’t part of a longer term trend.

Home Sales

The number of homes that sold in July in metro Phoenix was 3% above last July and about the same as July 2 years ago.

Combine a higher number of home sales with a lower number of homes hitting the market and we get a tighter market for homes in Phoenix.

Months Supply

The stat “Months Supply” combines the number of homes for sale with how fast homes are selling.

  • When homes are selling faster, the market is tighter than when homes are selling slower.
  • When we have fewer homes for sale, the market is tighter than when we have more homes for sale.

“Months supply” combines the two.

I think 4 to 6 months supply is “normal.”

In July we had 2.8 months supply of homes for sale in metro Phoenix. That’s a REALLY tight supply of homes.

To get into the normal range of supply – and a more normal range of home price increases – we would need to see either, 1) homes start selling more slowly or, 2) more homes hitting the market.

Either or both would increase the months supply and ease the upward pressure on Phoenix home prices.

A year ago in July the months supply was 3.2 so the market is tighter this July (2.8) than last.

Despite that 1-year trend, the months supply 2 years ago in July 2015 was the same as this July, 2.8 months.


The national and local economies are doing good, unemployment, for example, is very low.

That means more people have more money to chase after homes and drive up home prices.

The only downside forecast for Phoenix home prices I can see right now is the eventual recession. We always get recessions. Let’s not pretend we don’t.

If we get a recession in 2018, 2019 or 2020, which isn’t unlikely, that would put downward pressure on home prices for sure. Phoenix home prices, however, are not crazy out of line so we might not see a big dip in prices.

Rates Can’t Go Lower. On the other hand, nationally, we’re kind of in new world here when it comes to recessions.

During the last 2 recessions, the Fed cut interest rates to spike the economy.

With interest rates as low as they are now, the Fed won’t be able to spike the economy like they did in the last 2 recession.

So will the next recession last a long time like the last one?

Nevertheless, we certainly will NOT see a home price bust like 10 years ago.

In fact, real inflation-adjusted home prices in Phoenix are still ~25% BELOW where they were 10 years ago.

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Phoenix Housing Market at a Glance

Phoenix Real Estate Market at a Glance – Updated Graphs

Metro Phoenix home prices were up 8% in September 2016 over September 2015.

Single family detached home prices were up 9%.

Last year I really didn’t have a good feel for what 2016 would be like for Phoenix home prices but it turned out to be a good year… well, at least for homeowners.

Interest Rates. At the end of last year, all the talk was that the Fed would increase interest rates 2 to 4 times in 2016. But, it turns out, the Fed hasn’t increased the Federal Funds rate once this year and mortgage rates actually fell!

Inventory and New Listings Hitting the Market. Lower than I expected. I expected more homes would hit the market as home prices increased.

  • Part of the reason for the low supply is demographics. The Baby Boomers are getting older and older people sell and buy homes less often than younger people.
  • Part of it is that many people who bought homes in Phoenix 2004, 2005, 2006 and 2007 are still underwater! They would have to PAY money to sell their homes. That ain’t gonna happen. All those underwater homes essentially lower supply.
  • Then there are the people who bought at the top who don’t want to sell for less than they paid, even if they do have some equity. They aren’t technically “underwater” but they don’t want to sell for less than they paid.

Sales. Strong but not crazy.

  • The real economy is fine even though the stock market has been going more or less sideways for 2 years.
  • The Millennials are finally getting established economically and buying homes after entering the job market during the worse recession since the Great Depression.

2017. The big story will once again be interest rates.

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Canadian Homeowners

For every Canadian that is buying a home in metro Phoenix, 9 are selling, according to STAT.

The bottom of the Phoenix real estate market in 2010, 2011 and 2012 coincided with a great exchange rate for Canadians. Vacation homes in Phoenix were huge bargains for our Canadian friends.

Now, both factors make selling their Arizona vacation homes hugely profitable for our Canadian friends.

Phoenix home prices are way up from the bottom and the value of the Canadian dollar is way down, and that’s actually a good thing when you sell your Arizona home and get paid in U.S. dollars. Canadians take those U.S. dollars and exchange them for a lot more Canadian dollars than they would have gotten earlier.

“Canadian sellers who purchased at the bottom are cleaning up and out.”
Tom Ruff, ARMLS

Our Alberta friends have been having some economic stress because of the oil crash, so it’s nice they can make good money on their Arizona homes, if they need to.

Map of Where Canadians Own Homes in Metro Phoenix
Map Canadian home owners in Phoenix

Institutional Investor Homeowners

A while after bargain hunting Canadians hit the Phoenix vacation home market, several bargain hunting large institutional investors hit the Phoenix rental home market.

In my national blog, I wrote a short post, “Did Blackstone just accidentally call a market top?,” about the change to Blackstone’s buy and hold strategy.

  • Are they beginning to unwind their position by starting to sell some of their rental homes?
  • What does the smart money see?

Map of Where Institutional Investors Own Homes in Metro Phoenix
Map Institutional home owners Phoenix



Arizona #7 for Job Growth
Arizona 7th in Job Growth

Phoenix #4 for Job Growth

Growing up in Phoenix, I thought Phoenix would always be the top 1, 2 or 3 metro area for job growth.

It was a point of pride for Phoenix. It was trumpeted in the local newspapers, television stations and chambers of commerce. And I kind of took it for granted. Maybe I was a little smug about it.

Then the Great Real Estate Bubble burst and Phoenix economic growth became… well, terrible. We were #23 out of the top 23 metro areas for job growth in 2010.

Now, it looks like the Phoenix economy is finally putting the Great Real Estate Bubble in its rear view mirror. It took awhile. 10 years.

I don’t know if Phoenix will ever get back to the economic growth of its younger days but I kind of miss those annual headlines about Phoenix being #1 or #2.

Phoenix Employment Growth

You can sign up to get weekly email updates that include graphs like these directly from Elliot Pollack and Company, HERE.



Impromptu interview with my dog friend Larry Neaman of Nova Home Loans about down payment assistance programs in metro Phoenix.

A bunch of us dog people get together in the neighborhood park most evenings. Larry and I were the first ones there last night so I thought I would take advantage of it and pick his brain another time about down payment assistance programs.

The German Shepherd is Larry’s dog, Maiya. My 6-pound pretty papillion, Abby, didn’t make it into the video. She was probably at my feet begging to get picked up. Abby is great at only one thing, being held. It’s her superpower.

Larry’s phone is 480-500-3005.

Feel free to call Larry and pick his brain, too.

P.S. My phone was running out of juice. That’s why at the end the video stopped but the audio didn’t. Larry was saying at the end that Canada has 2 seasons – winter and mosquitoes. 🙂



Now that I’m back mentally from my big bubble project, I wanted to dive into the Phoenix real estate market.

Most of the price action that happens with metro Phoenix home prices happens in the first half of the year, the high season.

Home sales are a bit slower the second half of the year and home prices have a strong tendency to move sideways in the second half.

My Phoenix Real Estate Market at a Glance graph is always great but let’s look at some other graphs from The Cromford Report (available to licensed real estate agents who are paid subscribers).

For metro Phoenix, the price per square foot is up 6% in mid-June compared to a year earlier. 

Price Per Square Foot

That’s nice but the story this year isn’t about good appreciation.

The story this year is two stories;

  • Some less expensive zip codes are appreciating fast, but
  • Prices in some of the most expensive zip codes are actually falling.

Northeast Valley

Scottsdale Price Per Square Foot

It looks like Scottsdale home prices have been moving sideways for a couple of years but that’s misleading.

Northeast Valley: Mar-May 2016 vs 2015, $/SF

  • 85266 (Carefree) -10%
  • 85251 (Old Town Scottsdale) +12%


Glendale Price Per Square Foot

It looks like Glendale has seen good appreciation but it all depends on the zip code.

Glendale: Mar-May 2016 vs 2015, $/SF

  • 85310 (Farthest North) -6%
  • 85301 (Historic Downtown) +20%

Luxury Stagnation

The multi-year run of huge increases in luxury home prices is long over.

The luxury home market is sensitive to the stock market. Luxury home buyers tend to own a lot of stocks so when the stock market goes up, they feel good and buy luxury homes.

The stock market has been moving sideways, however, for a year and a half now and most of the recent stock market news has been blah, so it looks like luxury home prices will continue to mark time for awhile.

Lower Price Boom Continues?

This market is harder to forecast but since it’s been moving up so strongly, I’m expecting it to continue up unless the economy softens.

If interest rates ever increased significantly it could really change the real estate market for years.

Current homeowners with low-rate mortgages – which is pretty much everyone now – would be less enthusiastic about trading up (or down), if that would mean they would lose the great mortgage rates they have on their current homes.

But right now it looks like interest rates may not increase significantly for several years.

A recession is far more likely than significantly higher mortgage rates.

Recessions, however, tend to hurt the lower end of the market the most. So a recession would take the wind out of lower price home sales and price increases.


NOTE: Be sure to subscribe to my email newsletter and get exclusive access to 3 amazing graphs from The Cromford Report. If you’re a numbers person, you gotta subscribe!



Tom Ruff’s commentary this month in STAT points out the dramatic impact today’s low interest rates have on mortgage payments.

$200,000 Home

  • June 2006 | Interest Rate = 6.68% | Interest Per Month = $1,113
  • June 2016 | Interest Rate = 3.66% | Interest Per Month = $610

The Recovery

He also talks about the peak (2006) and trough (2011) of home prices and which zip codes have “recovered” the most and the least.

  • Most Recovered = Arcadia and North-Central Phoenix
  • Least Recovered = West-Central Phoenix and the far Northwest Valley.

See Tom’s piece for more details.

Curmudgeon Says

A curmudgeon might say 3.66% mortgage rates are responsible for the “recovery” of home prices and not so much a stronger Phoenix economy.

I’m starting to think we may never see mortgage rates above 6% again in my lifetime and Tom’s example suggests how fragile Phoenix home prices would be if we did see 6% mortgage rates again.

Where’s My Hammer?

But the danger of permanent low interest rates is what happens during the next recession?

The Fed can’t really lower rates any lower. That tool’s all used up.

With a smaller toolkit, it would be harder for the Fed to fight the next recession.



Over on my national website, RealEstateDecoded.com, using Zillow data, I created a new graph which shows you the percentage of homes increasing in value for 20 metro areas.

I’m still checking out the “Percent of Homes Increasing in Value” metric but I think I like it.

It gives me more information than just how fast home prices are rising or falling to estimate changes to the underlying demand.

Phoenix Has Mojo

This new metric shows that Phoenix has a ton of upward price mojo. Only Portland, the hottest market in the country right now, has similar upward momentum.

Portland and Phoenix Mojo

Next Week

I’ll update the “Phoenix Real Estate Market at a Glance” graph next week when the MLS comes out with their April data.

It’ll be interesting to see if this new metric foreshadows changes to Phoenix home prices.



Paradise Valley Home Sales

Valid for Two Weeks Only
Link expires April 30

Click here to see recent homes sold in Paradise Valley, AZ.

You can do your own custom sorting such as sorting by cost per square foot. Just click the “List” tab and then click on any column heading.

To get email updates on homes sold in Paradise Valley are anywhere else in metro Phoenix, call me at 480-463-4475. -John



Oh, and by the way, the mortgage finance system is still broken 8 years later.