Over the last year, migration hot spot Phoenix has seen its market cool down from recent price peaks. A Realtor.com forecast predicted that sales in Phoenix will decrease by 18% this year, with prices seeing a slight increase of around 3% by year’s end.
With less competition in the market and price growth slowing, this year could be the one when luxury buyers get lucky finding a prime property in Phoenix.
“If you’re ready to go, I would buy that home now and not wait,” said Heather Mahmood-Corley, an agent with Redfin.
While buyers won’t be subject to the kind of bidding wars they saw in 2020 and 2021, inventory for prime properties remains low around Phoenix.
“We have about half the inventory that we had pre-pandemic,” said Kirk Linehan, a real estate agent with Retsy and partner in the Linehan Group, based in Scottsdale.
Because of that low inventory, Mr. Linehan doesn’t expect to see any major price drops, especially not in the prime luxury market.
“The luxury space is going to hold its own,” he said.
Though the inventory is historically low, buyers have a lot more options than they had a year ago. That’s because as demand has reduced around Phoenix, more properties are going public on the MLS, as opposed to during the height of the pandemic, when desirable homes would get snapped up before they even get listed, he said.
Mr. Linehan expects to see sales pick up in the spring—traditionally Phoenix’s busiest time, ahead of the scorching summer months when few want to move.
As of January, houses sat on the market for an average of 70 days, compared to 32 days last year, according to Redfin data.
Meanwhile, many sellers are offering concessions in an effort to lure in buyers who may be discouraged by increasing mortgage rates, Ms. Mahmood-Corley said. Beyond just price cuts, many sellers and builders are also offering mortgage buy downs, which can help reduce buyers’ monthly payments.