Over the past month, six large cities have shown an increase in their Cromford® Market Index (CMI), marking an improvement from last week when only five cities were trending upward. Avondale's shift in direction accounts for the rise of additional cities. Meanwhile, the average change in CMI over the past month is -4.8%, slightly better than last week’s -5.0%. While the market continues to deteriorate for sellers, the pace of decline has marginally slowed. At the top of the market, Fountain Hills has been the worst performer, experiencing a sharp 24% drop in its CMI over the last month. Buckeye, Paradise Valley, and Surprise also saw significant declines, with deterioration exceeding 10%. These numbers reflect a challenging environment for sellers in these areas, with reduced demand or increased competition weighing heavily on their ability to negotiate favorable deals. Conversely, Chandler, Tempe, and Cave Creek have shown promising growth, each recording CMI gains of 6% or more. Other cities showing upward momentum include Avondale, Peoria, and Phoenix, which have moved into positive territory. These areas provide sellers with improved conditions, signaling greater demand and fewer obstacles in achieving favorable sales outcomes. Overall, the market landscape remains diverse, with seven cities categorized as seller’s markets, five as balanced, and five as buyer’s markets. Among the latter group, all five cities at the bottom of the table have seen declines of 6% or more, underscoring the significant challenges sellers face in these areas. This dynamic highlights the varying degrees of negotiating power across the region, where market conditions are increasingly influenced by location-specific factors.With mortgage rates not expected to change drastically heading into 2025, we will more than likely see a revolving change in demand from city to city month over month as each group of buyers swarm to find the best pricing possible with the best quality home as well. ‘There are only two tragedies in life: one is not getting what one wants, and the other is getting it.’– Oscar Wilde Have a great week everyone!

Read more

In 2024, the active listing trend has taken an unusual and unexpected turn, visible in a recent spike in available listings. Represented in light blue, the 2024 trend line reveals a sharp jump over the last two days, with listings approaching the 22,000 mark. This sudden increase has pushed 2024's listings above the levels seen in 2016 and 2015, making it necessary to look back a decade, to 2014, to find a November with more supply in the early to mid part of the month. Such a spike in November suggests potential shifts in the housing market, leaving many wondering about the cause. At the start of 2024, January's listings were actually lower than January 2023’s count. Yet, a distinct shift occurred as the spring months progressed. Unlike most years, when active listings tend to decline during the spring, 2024 maintained a steady or increasing number of listings through that period. Typically, this trend might be expected to taper off as we approach the holidays, with listings usually decreasing between mid-November and the end of December. However, the recent jump has defied this pattern, sparking concern and speculation about whether it signals a larger trend or market anomaly. This unexpected surge raises questions about the factors contributing to an unusually high number of listings so late in the year. There are various possible explanations, including changes in market conditions, seasonal adjustments, or shifts in buyer or seller behavior, all of which could be influencing this sudden increase. Given the typical trend of decreasing listings as the year winds down, many are now pondering whether this spike is the beginning of a new seasonal pattern or perhaps a reaction to broader economic conditions affecting seller urgency or inventory management. Ultimately, it remains unclear whether this recent jump in listings will mark a lasting change or will fade as a minor blip in the housing market. Market watchers are left to wonder: is this a sign of a new trend in listing behaviors, or simply an insignificant short-term deviation? Time will tell if this is just a brief, unusual increase, or the onset of a new trend that could reshape the expectations for seasonal listing patterns.“Duty, honor, country: Those three hallowed words reverently dictate what you ought to be, what you can be, what you will be.”— General Douglas MacArthur Have a great week everyone!

Read more

Over the past eight months, the real estate market has increasingly turned against sellers, who might instinctively attribute this shift to weakened buyer demand and persistently high interest rates. However, the primary cause of this change appears to be an increasing supply of available properties. As the months have passed, the inventory of homes for sale has steadily grown, putting more options in front of buyers and diminishing the likelihood that any particular listing will stand out. This intensifying competition among sellers is leading to frequent and often substantial cuts in list prices as they attempt to draw buyer interest. Compounding this trend is the presence of newly built homes, which represent a significant share of the market but only minimally contribute to the count of active listings. The rise in active listings has been significant, with properties without a contract climbing from 15,574 in February to 21,368 currently—a 37% increase. This influx of listings offers buyers an abundance of choices, making it harder for sellers to command attention in a crowded marketplace. As a result, sellers must actively compete with one another, often lowering prices to remain competitive. Additionally, these sellers face competition from new builds, which are drawing an unusually high share of contracts signed in 2024. The surge in available new construction only adds pressure on sellers of existing homes, further intensifying the challenge of attracting buyers. One way to gauge the cooling market conditions is through the contract ratio, which reflects the market's activity level. In February, the contract ratio for all areas and property types was 47.7, signaling a moderately active market; by contrast, this figure has now dropped to 32.46, verging on a cold market. The last time we saw this level in November was a few years ago when iBuyers were liquidating their excess inventory at discounted prices, with over 20,000 active listings at that time. Unlike then, today's situation isn't driven by an unusual surge in inventory but rather a simple imbalance between too many sellers and too few buyers. This disparity is causing the number of unsold homes to build up week by week, placing further pressure on prices. Currently, the Cromford® Market Index is hovering just above the buyer's market threshold, indicating that unless market conditions shift, a period of stronger downward pressure on prices may be on the horizon. As homes linger longer on the market, more sellers may lose patience and resort to lowering their prices in response. However, a possible seasonal reduction in active listings could mitigate this trend somewhat, as sellers typically remove homes from the market during the holiday season. Although an oversupply at the end of the year—like in 2005—can sometimes signal trouble ahead, that scenario appears less likely in 2024. Still, a close watch on both active listings and the contract ratio over the next two months will provide key insights into the market's direction."The best way to predict your future is to create it."– Abraham Lincoln Have a great week everyone!

Read more