Metro Phoenix home prices began to rebound during late 2023 — in most areas

Metro Phoenix home prices began to rebound during late 2023 — in most areas

by Catherine Reagor

David Walling, a former New York Yankees pitcher who was a first-round draft pick for the team in 1999, paid cash for an 8,274-square-foot mansion in north Scottsdale's Silverleaf community.

One of metro Phoenix’s priciest neighborhoods, in north Scottsdale, posted the biggest increase in home prices during the last quarter of 2023.

Half of the top Valley ZIP codes for price gains during the final three months of last year were luxury areas.

A central part of Apache Junction that led the Valley for the biggest median home price increase during last year’s second quarter saw the biggest price drop during the fourth quarter. Several other affordable ZIP codes posted steep price declines during 2023.

Higher mortgage rates are behind many of the drops in home prices in neighborhoods with houses priced below $500,000. Pricier ZIPs are more immune to more expensive mortgages because more buyers pay cash in those areas.

Overall, Metro Phoenix’s median was up more than 3% during the fourth quarter of 2023 from the fourth quarter of 2022.

Most metro Phoenix neighborhoods saw home values rebound at the end of 2023 from the big drops of 2022, according to Arizona Regional Multiple Listing Service data.

In the fourth quarter of 2023, the median home price was down in about 35 Maricopa County ZIP codes compared to a year earlier. Many more ZIP code medians were down from a year earlier in the summer, the third quarter of 2023.

The increases in median home prices during the fourth quarter bucked the drop in sales in most Valley ZIP codes.

“Mortgage rates are dropping, and the housing market is starting to pick up again,” said Phoenix-area real estate agent Christa Lawcock of Realty Executives. “Higher rates were a market killer.”

Valley ZIP codes where home prices increased or decreased the most from the same time last year

Q4 of 2022 to Q4 of 2023

Most metro Phoenix neighborhoods saw home values rebound at the end of 2023 from the big drops of 2022, according to Arizona Regional Multiple Listing Service data.

Note: ZIP codes with fewer than 10 sales weren’t included in the analysis because price fluctuations can be bigger with just a few sales.

Source: Arizona Regional Multiple Listing Service. 

Catherine Reagor/The Republic

Where were the biggest price gains?

Topping the list with a more than 40% increase in its median home price is 85262, where Desert Mountain is located in north Scottsdale. The area’s prices jumped even as sales fell more than 13% during last year’s fourth quarter, compared to the same period in 2022.

East Phoenix’s 85018 ZIP code, home to half of the Arcadia neighborhood, was No. 2 with an almost 37% price jump.

The median for both areas is well over $1 million.

Areas of central and northeast Scottsdale and north Phoenix were the other luxury ZIPs to post the biggest home price increases. All have median prices above $500,000.

ZIPs in central Mesa, Youngtown, Surprise and south Phoenix, where homes are more affordable, were also top spots for rising prices.

Where were the biggest price drops?

Central Apache Junction ZIP 85120, where home prices skyrocketed 125% during last year’s second quarter, saw its median plummet almost 69% during the fourth quarter. The very affordable area, with a median of $70,750, is home to many manufactured homes.

Real estate market watchers attribute the neighborhood’s recent price drop to a big drop in sales. During the last quarter of 2023, only 10 houses traded hands in 85120. That’s about half from the second quarter.

Most of the other parts of metro Phoenix with the biggest price drops are affordable, too. Those include central Phoenix, Mesa, Wickenburg, Tempe, Waddell and Wittman.

Number of home sales expected to climb

Housing market experts say home sales will likely start climbing again during the next few months because of the dip in mortgage rates. That could push up prices. 

The average 30-year mortgage rate is hovering around 6.7% after hitting 8% in late 2023, according to Freddie Mac. The housing market started a rapid slowdown in May 2022, when mortgage rates began to climb quickly.

“The impact of the changes in mortgage rates we are seeing will become apparent in late March to early June’s closings,” said Tom Ruff, veteran housing analyst with ARMLS’ Information Market.