no hassle listing blog

Housing Market Stall

The housing market has been a slow moving one – with little to warrant headlines.  Not so of late in the mortgage market.  Rates all summer were in the in mid-6 % range only to suddenly rise to 7.24%. A case of real estate déjà vu, reminiscent of the 2022–23 market, when the rate shock brought our market to a standstill. It’s not just the interest rate that affects demand, but also the suddenness or speed of the change.  Human nature seems to dislike rapid change as a general rule and this most certainly applies to finance.  Buyers typically pause when the rate is actively changing – whether up or down.  As the Cromford Report points out:

“Home values didn’t crash in 2023 or 2024 when rates were routinely over 7.25%, and market indicators do not support a crash in 2026. However, they may glide with less demand….This pause provides a window of opportunity for those buyers who can shoulder a higher payment temporarily and negotiate a better deal on the price or terms of their purchase. When rates decline again, they may refinance their home and enjoy a lower payment.

Those who purchased in 2023 at 8% in October were able to refinance at 6.6% by December, or 6.1% by September 2024. Rates increased to 7.25% by January 2025, and those buyers were able to refinance to 6.1% by September. As a rule of thumb, every 1% change in mortgage rate equates to roughly a 10% difference on the principal and interest payment.

…Buyers who can shoulder the higher rate can negotiate better terms on the home they want today, and get the payment they want when rates decline in the future.

As we have mentioned so often, the exception is the luxury market which continues to remain strong and unaffected by interest rates.

… the luxury market over $1.5M continues to be strong with August sales up 15% over last year. More specifically, sales over $3M were up 59% in August with 62 closings compared to 39 last year. Luxury buyers do not rely on mortgage rates; instead, they are influenced primarily by stock market performance and corporate profits. Corporate profits hit another record in Q1 this year and the stock market has remained resilient through the year.

Buyers who can overcome fear and inertia, will likely score a great value on a home when other buyers flee to the sidelines.  Sellers who focus on attractive pricing and concessions to assist buyers in buying down the interest rates, will secure the attention of those buyers.

Want an opinion on your specific home?  We will happily do a supply/demand analysis and show you how to win in today’s market.

Russell & Wendy Shaw

(Mostly Wendy)

Valley Real Estate: Stuck in the “Meh” Zone

The valley’s real estate market is markedly different today from the fast-moving market that characterized the early 2020s. After years of strong demand, rapidly rising prices, and intense competition among buyers, the market for the last few years has experienced a more balanced and measured period. In fact, the shifts are so slow it feels stagnant. Higher mortgage rates, increased housing inventory, and affordability concerns have kept a lid on demand thereby giving those buyers in the market more negotiating power. Yet, Phoenix remains an attractive destination for people seeking employment opportunities, relatively favorable taxes, and a warm climate. These competing forces have produced a market that is neither in a major boom nor experiencing a dramatic collapse.  For those who remember the market collapse in 2007, there are things worse than a boring marketplace. 

The end of summer often produces a lull in housing activity that rebounds in fall.  We anticipate seeing that again this year as the luxury market goes flat in summer and begins to revive as the heat abates.  Make no mistake, we are seeing two markets having two very different experiences.  The first marketplace, the sub-luxury, is responding poorly to the spike in interest rates.  Demand predictably softens when rates exceed 7%.  Properties that are priced realistically still attract buyers, but homes that are significantly overpriced may remain on the market for weeks or months. Sellers competing in this price point need to return to the basics.   The selling formula remains unchanged: correct pricing (especially important in the first 3 weeks on market), making the necessary staging and repairs, a willingness to contribute to buyer concessions to buy down the interest rate, and leaning in to their agent’s marketing and negotiation advice.  Sellers may also need patience. A property taking several weeks to sell does not necessarily indicate a problem with the home; it reflects a market in which buyers have more choices and greater bargaining power.

Not shockingly, this sub-luxury market has seen an erosion of prices and little price growth. The median price of a home in Phoenix is approximately $450,000, with prices showing relatively little year-over-year movement. This stability is a major change from the extraordinary appreciation experienced during the pandemic. During that period, historically low mortgage rates and strong demand caused buyers to compete aggressively for a limited number of properties. Multiple-offer situations and offers substantially above asking price became common. In 2026, buyers facing minimal competition generally have more time to evaluate properties and are less likely to feel pressured into making an immediate decision much to sellers’ disappointment.

Mortgage rates continue to be one of the largest challenges facing most of the Phoenix housing market. Although 7% is considerably below some historical mortgage-rate peaks, it is substantially higher than the exceptionally low rates available during the pandemic. The difference has a powerful effect on monthly payments causing potential buyers to be cautious about purchasing (suppressing demand).  Thankfully this has been largely counterbalanced by existing homeowners with very low mortgage rates having little incentive to sell (suppressing supply).

The rental market also influences Phoenix real estate. Substantial new apartment construction has increased the supply of rental housing in many areas. This increased rental supply has kept the cost of renting stable. When renting is cheaper than buying, many would be renters stay renters rather than transitioning to home ownership. 

Now on to the luxury market.  It has been thriving courtesy of the stock market, and unlike the sub-luxury market, interest rates are largely irrelevant. While activity in the summer is minimal for the high end (anyone who can escape the heat typically does) we expect a jump in activity with cooling temperatures.  When looking at the contrast in the two markets, the Cromford Report shares this:

“The under-$2M market is down over 10% from its May 2022 high, the same as every “normal” region we looked at above. But the $2M+ tier is up nearly 5% since May 2022, and still only 6.5% off an all-time high it set two months ago. Two completely different markets, moving in opposite directions….

One more data point is crucial: the $2M+ tier isn’t just holding its price better, it’s also transacting more often. Monthly closings in that segment averaged 115 a month in 2022; year-to-date in 2026 that’s up to 178 a month, a 55% increase in volume. Whatever is happening at the top of the market, it isn’t a shrinking pool of buyers propping up a thin, illiquid segment. More buyers are showing up for it than three years ago. We presume they are using profits from the stock market or exercising their stock options and, probably wisely, diversifying into some rather nice real estate. “

Overall, the Valley’s real estate market can best be described as moderately buyer-friendly. Looking ahead, the direction of mortgage rates will probably remain one of the most important variables for Phoenix real estate. If rates decline meaningfully, some buyers who have postponed purchasing could return to the market, increasing demand. If rates remain elevated, affordability pressures are likely to continue restraining demand. Whatever happens, we will continue to report it.

Wondering about your specific neighborhood?  Contact us for a no-cost evaluation.

Russell & Wendy Shaw

(mostly Wendy)

.

Two Different Experiences

The valley housing market remains what it has been for a few years now – a tale of two markets.  The sub-luxury market vs. the luxury market.  For much of the sub-luxury market, May of 2022 was the peak in pricing – with a subsequent correction downward of price that varied based on home size, area, and type of product (single family, manufactured homes, condos etc.)  The loss of value on single family homes varied from 4 -14%.  The picture erodes further when adjusted for inflation down to a loss of 13-22%!  There is a message here to buyers, with all the talk of the lack of affordable housing, housing is actually cheaper now than since 2022.  The same cannot be said of luxury properties.  Homes that are over 6000 square feet have risen in price approximately 32% and even when adjusted for inflation, over 15%.  Two very different markets having two very different experiences.

Another factor in the sub-luxury market that is different than luxury, is the distress market.  Delinquency is one of the bellwether’s of the sub-luxury market.  The Cromford Report shares these numbers:

Among listings under contract, 94.6% are normal, 1.5% are REOs, and 3.9% are pre-foreclosures (including a very small number of short sales). Distress is noticeably higher than last month and, though it remains low compared to the 25-year average, we are seeing a distinct upward trend in pre-foreclosure activity. Lender-owned listings remain low, suggesting that many pre-foreclosures are being resolved by sale before the trustee has to step in.

Normal listings represented 97.5% of listings under contract 12 months ago, so distress has clearly risen, which should serve as an early warning. However, we must keep it in perspective: between 2011 and 2012, the normal percentage was below 25%, and between 2013 and 2019 we averaged 85% normal. We are still better off than during that period, but the improving trend has reversed since 2022, especially in the last 6 months, and is now quietly flashing amber instead of green.

Trouble ahead?  Whatever this market brings, we will continue to report it to our wonderful clients first.

Russell & Wendy Shaw

(Mostly Wendy)

The Summertime Market

The spring buying season (February-June) is the peak period for home buying and selling in the valley.  Summertime brings the heat and, especially in the luxury category, an exodus of sellers and their listings. Consequently, the summer luxury market can tip into a buyer’s market just by virtue of the exodus.   The sub-luxury market is also experiencing a smaller drop in supply, but it is currently offset by the equal softening of demand.  Overall, the numbers are pretty stable and supply is still in the normal range at the moment.  That stability in supply and demand in the sub-luxury market is therefore not exerting pressure on pricing.  Current popular media theories as to “a shortage of supply” or conversely “an abundance of supply” are simply ill-founded as the Cromford Report explains:

“Surging inventory would put downward pressure on prices while an inventory shortage results in upward pressure. Looking at median sales price measures, they have had little fluctuation for more than two years, suggesting that neither of these theories is reflected in pricing trends.”

“In short, Greater Phoenix supply counts are not breaking records, they are not surging, and they are not critically low. Statistically, active supply is considered within normal range and stable for now. Meanwhile, buyer contracts have improved 11% over this time last year despite recent mortgage rate increases, indicating that buyer demand could increase significantly should economic certainty improve and mortgage rates fall closer to 6.0%.”

Despite the fact that average sellers are not experiencing rising prices, total sales to date exceeded last year by 2.9% – a positive sign, if somewhat tepid.  But as often is the case, the luxury segment of the market is behaving differently than the sub-luxury market.  According to the Cromford Report: “The largest improvement is in the luxury market where sales over $1M are up 10% and at a record high. Most impressively, sales over $5M are up 31% over last year and there have been 36 sales over $10M so far, already exceeding last year’s annual record of 32 before the year is halfway through. As for the rest of the sellers, it’s business as usual as buyers are still in the driver’s seat.. Home condition matters, seller incentives matter, and pricing matters. Expect marketing times to increase by approximately 6-10 days over the next 2-3 months.”

If you want specifics about the market in which you want to buy or sell – contact us for a free supply/demand analysis of your area.

Russell & Wendy Shaw

(Mostly Wendy)

The current market is a relatively quiet one with both Buyers and Sellers showing low levels of activity.    In fact, new listings are arriving at the second lowest levels since 2000 (2023 being the lowest).  Buyer activity is faring a bit better – as demand is moderately up from last year.  This is demonstrated by stronger transaction activity, with listings under contract increasing 5.1% and closed sales up 7.6% compared to 2025. So, while this market may not be ideal, increased buyer activity is an improvement over last year. 

As far as pricing, the trend depends on which price segment you look at.  Dickens knew of what he spoke when he wrote “it was the best of times, it was the worst of times”.

The Cromford Report plainly shows the contrast of the upper end market versus the lower end market (emphasis added): “Under $500,000, the 12-month moving average $/SF has declined significantly, by 7% since Jan 2023. 

Between $500,000 and $1,000,000, the 12-month moving average has declined slightly, by 1.5%. 

Between $1,000,000 and $3,000,000, the 12-month moving average has increased slightly, by 4%. 

Over $3,000,000, the 12-month moving average has increased by increased significantly, by 17% “

As to the future, the report further comments: “The past 4.5 years have included a sharp price spike in 2021, followed by a correction in 2022 and very little appreciation from 2024 through 2026 for most homeowners. However, the likelihood that the next 5 years will follow the same trend is low. Purchasing in a buyer’s market is usually best for those who plan to own their home for at least 5 years in order to ride out cycles like this one, which turned towards a buyer’s advantage in November 2024.”

The advantage to buyers in this market is less competition for the homes and increased seller flexibility on price and terms.  The advantage to sellers is a few more buyers on the ground than last year and the assurance that they are not selling either at rock bottom nor selling just prior to a likely jump in pricing.  Sometimes quiet is not the worst problem. 

****************************************************************************************************

Now let’s shift gears to a topic we rarely comment on: foreclosures.  A trailing indicator of an ailing housing market is a spiraling rate of foreclosures.  Anyone who lived thru the 2008-2013 market implosion in the valley probably still has PSTD at the mention of it. Foreclosures and distressed sales affected almost 25% of valley homes.  Fast forward to today where they are far below historic levels.  But that doesn’t stop clickbait headlines to the contrary.  The appearance of a dramatic increase in delinquencies is largely caused by a change in how FHA reports delinquencies. The Cromford Report explains:   

“The latest data from the FHA show that the share of loans more than 90 days delinquent increased by nearly 200 basis points between October 2025 and February 2026…

But this is a false conclusion. The reported increase is almost entirely due to a technical change, rather than an actual deterioration in repayment activity. Often, when an FHA borrower falls behind on their payments, they enter into a “home retention” program. Previously, such borrowers were recorded as current upon entering the program, but starting in October 2025, a new rule requires borrowers to make three consecutive payments before their loans can be marked as current. This single rule change accounted for 92% of the increase in the serious delinquency rate, according to a study by the Center for Responsible Lending.

Furthermore, about 94% of seriously delinquent FHA borrowers have significant home equity, with the median borrower having almost $100,000 in equity. This equity cushion should allow most delinquent borrowers who cannot afford their payments to ultimately avoid foreclosure by selling their home instead…

We are still about 50% BELOW normal, and although the trend is moving up, it is doing so quite slowly and consistent with things getting back to normal over a 5-year timeframe. We should also remember that the population of homeowners is significantly higher now than it was in 2004. We estimate that the overall population in Maricopa County has grown from 3.5 million to 4.7 million in those 22 years. This gives us a significant buffer before we need to start getting concerned.

In summary, foreclosures are not a significant concern at the moment for the market as a whole, and you can safely stop spending your valuable time getting alarmed about them unless and until we post a message telling you to start worrying again. If you see videos on YouTube claiming that foreclosures are exploding, please don’t click on them. You would just be encouraging their nonsense.”

How do you avoid real estate nonsense?  Work with trusted, experienced advisors who track numbers not clicks.

 Russell & Wendy Shaw 

(Mostly Wendy)

A quiet market

The current market is a relatively quiet one with both Buyers and Sellers showing low levels of activity.    In fact, new listings are arriving at the second lowest levels since 2000 (2023 being the lowest).  Buyer activity is faring a bit better – as demand is moderately up from last year.  This is demonstrated by stronger transaction activity, with listings under contract increasing 5.1% and closed sales up 7.6% compared to 2025. So while this market may not be ideal, increased buyer activity is an improvement over last year (per the Cromford Report).

As far as pricing, the Cromford Report shares this: “Home values have been mostly flat for the past two years, and the median is still down 4.8% from the peak price of $480,000 recorded June 2022. However, homes below $500K have drifted down 4-5% during the same time frame while those between $500K-$1M have remained stable with little fluctuation. Meanwhile, homes over $1M surpassed 2022 a long time ago and are still on the rise in value.

The past 4.5 years have included a sharp price spike in 2021, followed by a correction in 2022 and very little appreciation from 2024 through 2026 for most homeowners. However, the likelihood that the next 5 years will follow the same trend is low. Purchasing in a buyer’s market is usually best for those who plan to own their home for at least 5 years in order to ride out cycles like this one, which turned towards a buyer’s advantage in November 2024.”

The advantage to buyers in this market is less competition for the homes and increased seller flexibility on price and terms.  The advantage to sellers, is a few more buyers on the ground than last year and the assurance that they are not selling either at rock bottom nor selling just prior to a likely jump in pricing.  Sometimes quiet is not the worst problem.

Russell & Wendy Shaw

Mostly Wendy

Much like in the economy, there are two distinct groups in the valley having very different home selling experiences.  The winner?  The luxury market – which has been performing beyond what most could envision.  The Cromford Report shares this: “The largest improvement is in the luxury market where sales over $1M are up 10% and at a record high. Most impressively, sales over $5M are up 31% over last year and there have been 36 sales over $10M so far, already exceeding last year’s annual record of 32 before the year is halfway through.” Of course, as we have mentioned in prior articles, the health of the luxury market depends largely on the stock market.  As the stock market has performed well for the last 3 years, not shockingly the luxury housing market has performed in synchrony.

Conversely, the sub-luxury market is not having the same experience.   In the lower price ranges buyers are still largely in the driving seat.  While neither supply nor demand are wildly shifting, demand is showing a slow erosion due to rising interest rates.  As the Cromford Report shares: “Weakness in the bond market has led to mortgage rates rising and we are now seeing 6.75% as the typical 30-year fixed rate….It is the bond market that powers mortgage rates and hence has a strong influence on affordability and therefore demand for the rest of the housing market….Having briefly fallen below 6% just before the start of the war in Iran, rates are now back to levels not seen since July 2025.” Typically, demand in the lower end responds to rates below 6.50%.  In the meantime, the basics on getting our home sold apply to these sellers:  good home condition, seller incentives (i.e. assistance with buyer closing costs), marketing and correct pricing.  And of course, a good Realtor. 

Russell & Wendy Shaw

(Mostly Wendy)

The Phoenix real estate market is always in flux, but currently in a way that effectively changes nothing.  How is that possible?  The answer lies in the seesaw balance of supply and demand– only in this case each side is changing in a way that offsets the other.  Supply – it’s up.  Demand – it’s up.  The result is a static balance.  Leaving us with a market that continues to slightly favor buyers in most areas (strongly in the outlying areas) just as it has since November of 2024.

The brightest spot in the market (as has been true for the last few years) is the luxury market.  It is performing better than ever courtesy of the stock market.  Conversely, the darkest spot is condos under 300K.  To quote the Cromford Report: “Sellers have the least advantage in the condominium market under $300K as supply is up 20% over last year and contracts in escrow up only 13%. April sold prices are down 9.5% from last year in this segment with the median size sold at 1,048 sq. ft., historically prices for this segment are similar to where they were 5 years ago around May 2021.” By contrast, “Single family homes between 1,200-2,400 sq. ft. have shown the most stability in prices over the past 3 years with minimal fluctuation.” The upshot is sellers tend to have the advantage in central locations and luxury, while buyers control the outer areas and prices below $500,000.

Where this market heads next depends largely on the economic concerns of inflation, war, and jobs.

Now on to some common topics that prompt questions from our clients.

Solar:  Our feelings on solar can probably be summed up with “love the idea, hate the reality”.  Particularly solar leases.  Again, we stress that the concept is solid in an area that is in “the sunbelt”.  However, few consumers are aware that the Big Beautiful Bill removed the existing tax incentives for the consumer on solar.  Even beyond that, leased solar creates a financial obligation for any future buyer to assume.  Many buyers are pushing the ceiling of their monthly qualifications.  Another fixed payment that they must take on can be met with lender restrictions as well as buyer’s mental hurdle – they may feel why do I have to take on your debt? It can dissuade some buyers from picking a solar lease home. Additionally, when roofs need repair or replacement the panels must be removed and reinstalled by the solar company at considerable expense.  Owned solar is generally viewed differently by buyers- some consider it a plus although they may not consider it a value added item (i.e. they may not pay more for it, but they may consider it a plus when choosing a home).  In short, we strongly urge our clients to really research solar and its implications over the sales pitches before committing.

Prepping your home for sale: We’ve been selling real estate for over 40 years and this question’s answer never changes.  Small changes can provide good payback – with the ultimate goal of creating a good first impression.  Landscape maintenance is one of the first things a buyer sees when approaching a home.  A well-groomed yard along with a welcoming front door matters.  As for the interior, purging and removing clutter costs nothing but pays off in making the space look larger, aesthetically pleasing and well maintained.  Interior paint and updated flooring also payoff with buyers.  Sound expensive and overwhelming?  Can you sell just it as-is? Of course, but as we like to say buyers are bad estimators.  There is penalty pricing for pushing work on to them.  But getting the home on the market always outperforms our next topic….

Cash offer/investor– Home sellers find the idea of a cash offer enticing.  After all, the cash offer promises a few coveted things: skipping the work to prepare your home for sale; no appraisal or buyer qualifying for a loan; and no showings!  Sounds great on paper.  What is missing is… money.  The average home seller will give up around 25-30% of their home’s hard earned equity when selling this way.  While we do out of necessity offer our clients a cash offer option thru the largest cash offer firm, we encourage them to consider enduring the traditional sales process to maximize value.  Because in addition to losing money you give up representation.  That may feel not meaningful but representation is a combination of hand holding blended with advocating.  Meaning that you have someone defending your pocketbook but also who can level the playing field of knowledge.  Going it alone puts you at a disadvantage as the investor is not on your side.  In fact, legislation was passed to force investors to disclose if they are “wholesalers” because the public was so often exploited.  What is a wholesaler?  It is an investor who agrees to buy your home and then while under contract sells the home to another investor for more.  We have seen deals 5 investor deep – with each person making money on the home seller’s desperation or ignorance.  Example:  home seller sells to investor A for 400K, investor B agrees to take investor A position for 460K, investor C agrees to take investor B position for 500K… and so on. All money that the homeowner would have captured simply by agreeing to sell thru a traditional sale process.  Seniors are often the target for these investors.  The message?  Check out all your options before heading down this precarious pathway.

Didn’t see your question addressed here?  Contact us – we will happily answer your questions or tour your home at no cost or obligation.  As always, we are here to help.

Russell & Wendy

(mostly Wendy) 

The Seesaw Market

The Phoenix real estate market is always in flux, but currently in a way that effectively changes nothing.  How is that possible?  The answer lies in the seesaw balance of supply and demand– only in this case each side’s changes offset the other.  Supply – it’s up.  Demand – it’s up.  The result is a static balance.  Leaving us a market that continues to slightly favor buyers in most areas (strongly in the outlying areas) just as it has since November of 2024.

The brightest spot in the market (as has been true for the last 3 years) is the luxury market.  It is performing better than ever courtesy of the stock market.  Conversely, the darkest spot is condos under 300K.  To quote the Cromford Report: “Sellers have the least advantage in the condominium market under $300K as supply is up 20% over last year and contracts in escrow up only 13%. April sold prices are down 9.5% from last year in this segment with the median size sold at 1,048 sq ft, historically prices for this segment are similar to where they were 5 years ago around May 2021.” By contrast, “Single family homes between 1,200-2,400 sq ft have shown the most stability in prices over the past 3 years with minimal fluctuation.”

Where this market heads next depends largely on the economic concerns of inflation, war, and jobs. Whatever the market brings, we will report on as it unfolds. 

Russell & Wendy Shaw

(mostly Wendy)

War and Real Estate

Our real estate market has been showing signs of life.  Demand (contracts in escrow) are up 10.2% over last year (as well as 2023 & 2024).  Although demand is still 13% below normal, improvement is well… improvement.  The steadily increasing supply that was tipping the market in favor of buyers has finally leveled off.  New listings coming to market in February and March are down 7%.  This effectively has begun to shift the buyer’s market closer to a balanced one.

The fly in the ointment?  War. 

The Cromford Report shares this: “While buyer demand for homes has been recovering, the recent war with Iran that started on February 28th has created some speed bumps along the way. Hopes are high that the effects are temporary, but the rising cost of gas threatens to affect the current rate of inflation in the United States. Mortgage rates do not like inflation, and in response they have risen from 5.99% to as high as 6.4% as of this writing. This increase in mortgage rate gives buyers two choices, to accept a 5% increase in payment, or a 5% drop in purchasing power.” Of course, the unstated third choice is for buyers to go to the sidelines and wait until the war ends. 

So far, the most immediate impact seems to be higher interest rates.  Rising inflation generally causes mortgage rates to increase because lenders require higher returns to offset the reduced purchasing power of future loan repayments. Which of the three choices buyers are choosing will show up in the next month.  Whatever the impact, we will be tracking the market and reporting our findings. To further quote the Cromford Report: “The message for sellers continues to be patience. The housing market is in recovery, but it’s a slow one.”

Russell & Wendy Shaw

(Mostly Wendy)