Are real estate prices droping?

[Jimmy Rojas]

Hey everyone, i live in Phx,az and very frequently check out the MLS portal for real estate in Az, recently looks like there is a drop in asking prices and houses are not being swept off the market as fast as before, what is the reason behind this and could it be expected that the prices will drop even more, there is a lot of contradicting information on the matter, what liable place do you all recommend to get accurate info. Thank you.

[Bruce Woodruff]

I'm not following the market closely at this point but it's not a big shock. Record inflation and the general disastrous state of the country/world will get some people to think twice before pulling the trigger on a large purchase like a house.

I doubt it will make any serious or professional investors slow down though...every market has it's opportunities.....

[Bob Okenwa]

@Jimmy Rojas

Supply and demand. Supply is still tight, but demand is wavering at the current prices. High prices + higher interest = Lower affordability. You can only squeeze so much juice out of an orange before there's nothing left. We seem to be approaching the point where prices have peaked and will begin to normalize. Not go back down to 2019 levels, but resemble a more sane market from years past.

I don't pay attention to real estate predictions. I follow market data and what my eyes show me and go from there.

[Rick Albert]

I would take a look at the "Month's Supply." This is an indication of how many months it would take for all of the inventory to sell. Anything less than 6 months is considered to be a Seller's Market and anything over is expected to be a Buyer's Market. That will give you an indication of how the market is doing. 

For example, in Los Angeles County it is hovering around 1.6 month (has gone up slightly). We would need more than 3x the inventory just to be balanced. That tells me that it is going to be a hot minute before we see prices drop (overall as each sub market tells a different story).

[David Avery]

Interest rates have almost doubled in  90 days,  Gas is over $5.20 now.   Food prices will double in 10  months.

[Bruce Woodruff]

Quote from @David Avery:

Interest rates have almost doubled in  90 days,  Gas is over $5.20 now.   Food prices will double in 10  months.

And that will make RE prices drop......

Or will it?

[Eric Bilderback]

It does not mean prices will fall but it increases the probability.  

[Mike Dymski]

PHX could be one of the canary in the coal mine markets due to it being one of the markets with the highest run up in prices (and rents).  Heck, the Fed is the canary.  This does not mean that prices will decline but it will impact the market in some form.

If you are looking for data, there are lots of charts and articles shared on the subject in other recent threads.

[Jimmy Rojas]

Most likely prices wont drop at 2008 level but with the increase of rates and homes not selling as fast hopefully they will drop some, have some family members that are cash heavy....................