2023 Mid-Year Mesa Real Estate Market Update
Last year was a wild ride in the mesa real estate housing market where mortgage rates doubled, and sales plummeted in the second half of the year.
The dramatic rate hikes and bidding wars stopped buyers dead in their tracks and the demand pretty much vanished overnight, triggering prices to drop. By the end of the year Mesa inventory had increased by 138 percent from May to December while home prices decreased.
Mesa Real Estate Market Demand
There was a lot of talk and speculation that prices would continue to plummet, and we were heading for another housing market crash. While we knew this wasn’t going to happen for many different reasons, the fear of a repeat of 2008 kept buyers sitting on the fence waiting to see what was going to happen.
As it became clear that we had a correction and the mesa real estate market wasn’t going to crash, buyers who had put their buying process on hold for the past six months started coming back into the mesa real estate market.
Real Estate housing Supply
It soon became obvious that the days of three or four-percent mortgage rates were gone for the foreseeable future and it was more likely that rates would increase. Prices had come down 21 percent, which helped with the higher interest rates.
In January buyers started to come back to the mesa real estate market and it wasn’t long before the extra supply was quickly snapped up. By June 17 the supply had decreased to 456 single-family homes for sale in Mesa compared to 985 in January.
Median Sales Price
With demand increasing and supply decreasing in early 2023, we saw prices bottom out in December 2022 and they have increased every month since. With December seeing the lowest median price since July 2021 at $430,000, by June 2023 it has increased to $495,000 which is a 15 percent increase so far this year.
If Mesa Real Estate Market Rates Drop
If rates were to drop, especially if we got back into the five percent range, buyers would be out in force. With the already low supply, an influx of buyers could start a bit of a frenzy again but it may be just for a shorter period of time.
With lower rates, it could also give the sellers who have been holding off selling and getting rid of their super-low mortgage rates a reason to sell and bring more inventory back to the market.
Is Now a Good Time to Buy or Sell?
It used to be that we could predict the mesa real estate housing market with at least some certainty based on statistics, seasonal trends, market conditions, etc. but if there is one thing this market has taught us in the last four years is that this housing market is more unpredictable than ever.
If You are a Buyer
Prices are continuing to increase and interest rates have stabilized. If rates do drop, you will be competing with more buyers, and in an already under-supplied market, prices will increase. So, while the interest rate may be less it could cost you more to purchase the home. If you purchase now and interest rates drop, then you can refinance and get a lower rate anyway.
Of course, prices could drop again, and you could pay less for the home, but as the price is driven by supply and demand and we have such a shortage of supply, we don’t expect that to happen any time soon.
If You are a Seller
We know that if you price your home at the right price and market it well now is a great time to sell due to the lack of supply. Fewer homes mean less competition.
It also depends on where you are planning to move to. If you are staying in the same market, it doesn’t matter as much because the home you purchase will increase or decrease along with the home you are selling, so it balances out. Plus, if you are getting a mortgage and rates come down, you can refinance at that time and get a lower rate.
In a Nutshell
2023 is a lot stronger market than how it looked at the end of last year. Demand is coming back while at the same time, supply is dwindling. We are back in a sellers’ market and in certain price ranges, we are seeing multiple offers again. We would expect it to slow down for the summer and through the holidays but if there is any decrease in rates you will probably see the market pick up again pretty quickly.
Monthly Mesa Real Estate Market Update
Please visit my website Homes2SellAZ.com for my Monthly Market Update which includes charts showing the inventory, sales, and median sales price in Mesa.
If you are thinking of buying or selling or would like to know more about the current market conditions, please don’t hesitate to contact me.