Metro Phoenix's median home price poised to climb $12,000 in March

Catherine Reagor
Arizona Republic

Metro Phoenix’s median home price is expected to climb almost $12,000 in March after dropping most of the past six months.

Home sales jumped in February and are on track to increase again in March.

Both are indicators that the Valley’s housing market isn’t headed anytime soon for a repeat of the crash that rocked the economy during the Great Recession, contrary to what at least one Wall Street firm said would happen this year.

Sales and prices are still down across the Phoenix area compared to the first few months of last year, but so is supply. That’s keeping the market favoring sellers.

Interest rates are the wildcard.

“Mortgage rates are extremely volatile at the moment, making any future projections extremely thorny,” said housing analyst Tom Ruff with The Information Market, an Arizona Regional Multiple Listing Service division.

When interest rates started climbing last spring, home sales and prices began falling.

But, he said, “recent reports of a crashing housing market in Phoenix have been greatly exaggerated.”

More:Why solutions for Arizona's housing shortage are facing fights

Pending sales show median price going up

The first four months of the year are typically the strongest for the housing market in metro Phoenix. Super Bowl LVII was played in Glendale during February and likely gave home sales an extra boost this year.

Metro Phoenix home sales climbed to 5,583 in February, up 31% from January, according to ARMLS.

“If a home is in good condition and priced well, it will sell fairly quickly,” said Phoenix real estate veteran Bobby Lieb, who recently moved to Launch Real Estate as an associate broker and partner. “You don’t want days on the market to accumulate too much for a house because it will hurt the sellers.”

The Valley's average number of days on market jumped when home sales started to slow last summer, but the indicator is now holding pretty steady at 82 days. That’s more than double from a year ago.

The Valley’s median home price in February inched up a bit to $412,000 from $410,000 in January. February’s prices were down about 8% from February 2022’s level.

The Phoenix-area median home price is expected to climb to almost $424,000 in March based on pending sales, according to ARMLS.

The supply of houses for sale dipped almost 3% in February, and housing analysts don’t see it soaring again in the near future.

Related:Metro Phoenix inflation rate dips to 8.5%, but is still among nation's hotspots

Interest rates holding steady — for now

Thirty-year mortgage rates jumped above 7% last October for the first time in several years. Loan interest rates have been bumping along between 6% and 7% since then.

In March 2022, when home sales and prices were soaring, the average 30-year rate was about 4%.

In the wake of uncertainty from bank failures, the average rate climbed and then dipped to rest at about 6.5% last week.

“December could have been the bottom for this housing market cycle,” said Tina Tamboer, senior analyst with the Cromford Report. “Greater Phoenix is back to a seller's market, except for a few areas farther out.”

She said if interest rates climb above 7% again, it could slow sales.

But no one really knows where rates are headed. Most housing market watchers agree forecasting mortgage rates is a sucker bet.

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