Phoenix-area homes start seeing price cuts, but demand is still high

Most of the homes seeing the biggest price cuts are in the $800,000 to $1.5 million range.
Published: May. 25, 2022 at 6:31 AM MST
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PHOENIX (3TV/CBS 5) -- There is relatively good news for homebuyers looking to settle into the Valley: house prices are starting to trend down across the Valley.

The frenzy that we saw a the beginning of the year is starting to slow down. While experts still say it’s still a strong seller’s market, it’s worth noting that it’s beginning to cool off rather quickly. So if you’re looking to sell, the time is now.

What is happening is there is a difference between home prices going down and listing price cuts. We see many listings on the market having price decreases because they are not getting as many offers as they have had in the past.

Caitlin McKeague from Desert Dreams brokerage says more than 70 percent of homes on the market have undergone “listing price cuts” since March. She says summer is typically a slower season. However, there has also been a significant increase in supply as more sellers have begun listing their homes in the last few months.

“It’s happening because demand has gone down quite a bit due to rising interest rates,” said McKeague. “As interest rates [have] gone higher, they can’t make that monthly payment any longer, [so] they have decided to discontinue the search.”

Real estate experts continue to say that the Valley still has a meager supply of houses. But the market is cooling off with decreased demand. Most of the homes seeing the biggest price cuts are in the $800,000 to $1.5 million range.

McKeague says that your competition is falling off as a buyer so buyers can take advantage of that. So while interest rates may be high, you likely won’t have to go way over the asking price or waive inspections or appraisals.