More Sales, But Buyers Still Set the Price
The Phoenix-area housing market improved in July, but the improvement came with an important qualifier: more homes sold, yet most sellers still accepted less than their original asking price.
ARMLS reported that July single-family sales increased 3% from a year earlier. At the same time, 75% of homes sold below their original list price, 14% sold at list price and only 12% sold above it.
That is a much more useful picture of the market than simply saying sales were up.
The Market Improved, But This Was Not a Seller Recovery
More sales usually sound like good news for sellers. They are. But increased activity does not automatically mean increased pricing power.
If three out of four homes are selling below their original asking price, buyers are clearly participating without chasing prices. That distinction matters.
The problem is not that buyers have disappeared. Buyers are there. They are simply deciding which homes justify the price and which do not. For a seller, that makes the original list price especially important. Starting above the market may eventually lead to a price reduction, but by then the listing has already spent valuable time competing against homes that were priced correctly from the beginning.
A buyer showing up is not the same thing as a buyer accepting the seller’s price.
Compare That With 2021
The Lower-Priced Market Was Still Competitive
The market was not equally soft at every price point.
Of the July homes that did sell above list price, about 40% were priced below $400,000. ARMLS also found that above-list sales were concentrated most heavily in Phoenix.
That makes sense from an affordability standpoint. There are simply more buyers capable of competing at lower price points than there are at higher ones.
It is also a reminder that there is no single Phoenix housing market. Conditions can change by price range, neighborhood and property type.
A seller should be looking at the competition for that particular home, not just a Valley-wide headline.
Mortgage Rates Help Explain the Buyer Restraint
Mortgage rates moved higher during July. Freddie Mac reported an average 30-year fixed rate of 6.43% on July 2, rising to 6.66% by July 30.
The movement during the month was less important than the level itself. Rates remained in the mid-to-upper 6% range, keeping monthly payments substantially higher than buyers became accustomed to several years ago.
That changes buyer behavior.
Most buyers do not shop only for a purchase price. They shop for a payment they can comfortably live with. When financing consumes more of that payment, there is less room for the house.
That helps explain why buyers can be active while still resisting aggressive pricing.
Higher rates do not eliminate buyers. They make those buyers more careful about what they are willing to pay.
What July Means for Sellers
The July numbers do not say sellers cannot get a good price. They say the market is less forgiving when the starting price is wrong. A properly priced home can still generate attention and, in some segments, competition. But pricing above comparable homes and expecting buyers to negotiate their way back to market value is increasingly risky. Buyers have too much information and too many alternatives.
The seller’s best opportunity is often when the home first reaches the market. Pricing correctly helps preserve that opportunity.
What July Means for Buyers
Buyers should not assume that every listing will sell below asking simply because 75% did. The better question is whether the particular home is priced correctly. A home that has been sitting, reduced in price or entered the market above comparable sales may offer negotiating room. A well-priced home—particularly at a more affordable price point—may still attract competition.
The numbers provide negotiating context, but the individual property still determines the strategy.
The July Takeaway
July was healthier than a year earlier. More homes were selling and buyer activity was improving. But it was not a return to the market of a few years ago.
Buyers were willing to buy. They just were not willing to overpay.
