Heading into the final month of 2023, inventory levels have increased slightly, demand is holding relatively flat, and interest rates ticked slightly downwards. Traditionally, people tend to take homes off the market during the holiday season, so it may be a game of wait-and-see till the New Year arrives. We are still seeing a tremendous amount of concession requests from buyers, particularly in entry-level and move-up properties that require financing. As has been the case all year, the luxury property market continues to see all-cash deals come together.
By the numbers: October to November 2023, the supply-demand index declined from 127.1 to 109.4, with the supply index rising from 56.9 to 63.5 and the demand index dropping from 72.3 to 69.4. As predicted last month, Greater Phoenix is officially in a balanced market again and declining at a rate that would put it in a buyer’s market by December. It remains unclear how long this opportunity for buyers will last, as conventional mortgage rates have dropped from a high of 8.0% last month to 7.36% today (6.71% for FHA). The rate situation is similar to last year, when October 2022 peaked at 7.37% and dropped to 6.62% by November (6.2% FHA), stabilizing there for 3 weeks. Last year, demand began to pick up after rates dropped into the low 6% range from mid-December to mid-February. If the Federal Reserve decides not to raise the Federal Funds Rate again, mortgage rates could drop and buyer demand could increase in December.
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