Goldman Sachs Predicts Doom

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This week let's talk about the Goldman Sachs article that predicts the Phoenix Home Values  will decline 25% in 2023. Here is the link to the article: https://www.abc15.com/news/region-phoenix-metro/phoenix-could-see-2008-like-plummet-in-housing-prices-goldman-sachs-report-says

I feel Goldman Sachs has missed the mark. Here is why. The contract ratio of homes under contract versus those for sale has been increasing the past 4 weeks and we are at our highest level since September. 

Weekly mortgage demand jumps 7% as interest rates drop to lowest level since September. https://www.cnbc.com/2023/01/25/mortgage-demand-jumps-as-interest-rates-drop.html


The count of listings under contract has increased by 22% over the last 2 weeks. showing buyers are quickly coming back into the market. 


Traditionally in Greater Phoenix the number of homes for sale significantly increases in January, this year the homes inventory of homes for sale is decreasing. Home Builder permits are down as well.


The Cromford Market Index (seasonally adjusted) shows 11 of the 17 largest cities in the Valley moved into seller market territory and all 17 cites made positive gains for sellers.

What goes up must come down... maybe

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Interest rates have dropped just over 1% from their highs. Currently 30 year conventional rates are just over 6% and FHA and Jumbo rates are below 6%.
This market is very rate sensitive. Homes under contract have risen 18% since the beginning of the year. Nationally mortgage applications are up 28%. (CNBC article https://cnb.cx/3XKekxP )
Half of FHA Buyers are seeing seller concessions in the $5,000-$10,000 range. However, if this market continues to improve those concessions may dry up in the future.