Over the past year, the Phoenix metro housing market has seen a significant change—home inventory has increased by 57%. This dramatic rise in available homes has many buyers and sellers asking a crucial question: Are we heading for a housing market crash?
Let’s take a closer look at the numbers and the reality behind this shift.
Inventory Surge: The Facts
Between August 2023 and August 2024, the inventory of homes for sale in the Phoenix metro area increased from 9,000 to just over 16,000. On the surface, this 57% growth may seem alarming, but it’s essential to understand what this really means for the market as a whole.
In a typical, balanced real estate market for Phoenix, there needs to be at least 18,000 homes available for sale. While inventory has indeed increased, we are still slightly below the number of homes needed to balance supply and demand.
A More Balanced Market, Not a Crash
Even though inventory has grown considerably, it’s important to remember that this increase brings the market closer to balance, not towards a crash. A year ago, the market was extremely tight, with fewer than 9,000 homes available for sale, creating intense competition among buyers and driving prices up.
Now, with more homes on the market, we are moving towards a more balanced environment where buyers have more options, and the intense bidding wars of the past are slowing down. The increased inventory also means price increases have started to stabilize, creating a healthier market for both buyers and sellers.
What This Means for Buyers
With 6.5% fewer homes under contract than a year ago, there is less immediate pressure for buyers. More homes are available, which means buyers have more choices and a little more negotiating power than they did a year ago. The market is still active, but it’s less frenzied than it was during the peak of the pandemic-era housing boom.
If you’ve been considering buying a home in the Phoenix metro area, now may be a good time to explore your options. With more homes available and less competition, you can take your time finding the right home without worrying about rapid price increases.
The Bottom Line
While the 57% increase in inventory might initially sound like a red flag, it’s actually a sign of the Phoenix housing market moving towards a more balanced state. We are not heading for a crash; instead, the market is stabilizing, giving buyers more choices and creating a healthier overall environment.
If you’re thinking of buying or selling a home in the Phoenix metro area, it’s essential to stay informed and work with a real estate professional who understands the evolving market dynamics. The landscape may be changing, but with the right guidance, you can make confident, informed decisions in today’s real estate market.