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For the past several years, the U.S. housing market has been prone to unprecedented price volatility rattling popular regional markets like Phoenix, and as demand recedes and prices begin to fall, Arizona’s capital city is facing a crisis reflective of its 2008 crash. After consistent growth throughout the pandemic, the Phoenix market recorded a median peak price of $470,000 last May, but by December, prices had fallen by nearly 13% to $410,000, and in January 2023, home sales were down 74% year-over-year, Insider reports.

Phoenix’s sudden deceleration is on par with its bubble-and-bust cycle during the Great Recession, but experts are split on whether double-digit price drops are in the metro’s near future.

Despite the numerous indicators of a weakening housing market, Phoenix may simply be facing a correction instead of a crash, several experts told Insider.

A major difference between the 2008 bubble and today is the fact that the Phoenix area's economy has diversified and become more resilient, attracting employers and their workers who need someplace to live. In terms of overall output, Phoenix's GDP has nearly doubled between 2009 and now, Fed data shows.

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