Sales plummeting, rising interest rates: what’s in store for Phoenix’s housing market?

PHOENIX (3TV/CBS 5) - With the federal interest rates rising over the past few months to combat inflation, the housing market has started to cool down. A new report is showing that home prices may plummet in 2023, so what does that mean for buyers and sellers? Shelly Sakala, a realtor with The Sakala Group, dropped by Good Morning Arizona about what we can expect from the market next year.

“I’ve been hearing that the interest rates could go down as soon as the midterm elections,” Sakala said. “That could create some stability so people know what to expect...If interest rates continue to rise, we are going to see the market correcting even more than it is.” She described Phoenix as a volatile market since it tends to “go up really fast and go down really fast.”

Sakala believes that the market may plummet, but it may not be as bad as you expect. “All economists that I follow and trust and what I know from my own knowledge, we’re still looking at house prices going up, but a lot slower,” she said. “We’re looking at a more balanced market which is a healthy market. Over the past 20 years, interest rates went up by about 7% here in the Valley.”

She said that the market has seen the fastest slow down of the housing market. “We have about 300 people move into Maricopa County a day,” Sakala said. “Inventory is still going to be low, it’s still not going to catch up. Those are things that are going to keep our market strong.”

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