Dec 5, 2022 - Real Estate

Every Phoenix-area ZIP code sees drop in home prices

Note: "Typical" refers to the average home value in the middle 30% of estimated home values in a region; Data: Zillow; Map: Erin Davis/Axios Visuals

Home values dropped across the Valley from July to October as the red hot housing market continues to cool, according to data from Zillow.

State of play: Typical home prices, based on the Zillow Home Value Index (ZHVI) fell most sharply on the west side, particularly around Glendale, west Phoenix and Tolleson.

  • The two biggest decreases, both of 8.2%, were in neighboring ZIP codes — 85031 and 85035.
  • The former covers the area between 43rd and 59th avenues and Camelback and Thomas roads. The latter runs from about 43rd to 83rd avenues between I-10 and Thomas.

By the numbers: The drops reduced the typical home price from $297,000 to $273,000 in 85031 and from $290,000 to $266,000 in 85035.

  • Tolleson, the western part of Phoenix's Estrella Village area and Glendale between 67th and 83rd avenues notched 7.5% decreases.

Yes, but: No part of the Valley has been spared. Every ZIP code in the Phoenix metro area experienced price decreases during this period.

  • The smallest decreases we saw were in the Apache Junction and Gold Canyon area, where prices only dropped by 2.2%.
  • The 85006 ZIP code, which is bound by Thomas Road and Seventh, 24th and Van Buren streets, only saw a 2.5% drop, from about $443,000 to $432,000.

Why it matters: Phoenix Realtors president Andrea Crouch, of The Crouch Group, tells Axios that the decrease in values and prices was a change that needed to happen.

  • "It is a result of sellers coming down from the moon on where they wanted their price to be, down to the Earth where the buyers are," she said.
  • Despite popular sentiment that many homebuyers have been priced out of the market, Crouch says, houses in the Valley are still affordable compared with the rest of the country, and the decrease in prices will help.
  • She's hoping the Fed will lower interest rates when the new year begins.

Context: The housing market started cooling earlier this year, with asking prices for active listings on the decline and the average number of days homes spent on the market on the rise.

Zoom in: Crouch said the decrease is a market correction, not a crash.

  • People were getting 30 offers for every listing and the Valley was flooded with cash buyers who were constantly outbidding each other, which allowed sellers to get whatever price they wanted, she says.
  • But a dramatic rise in interest rates shifted the situation to a buyers' market.

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