Market Update August 12th, 2024

The trends in the CMI (City Market Index) over the past month indicate a gradual recovery in several key markets, despite a varied performance across different cities. Over the past month, there has been an average decline of -1.8% in the CMI, showing a slowing in the rate of decline when compared to the more significant -4.4% seen last week. This moderation marks a continuation of the positive trend that began three weeks ago. Interestingly, in just the past week, the average CMI saw a slight increase of +0.4%, suggesting a subtle yet positive shift between August 1 and August 8.

In terms of geographic performance, Fountain Hills, Cave Creek, and Scottsdale have demonstrated the largest percentage gains, indicating that the higher end of the market is exhibiting the strongest resistance against the broader market's weakness. On the other hand, cities like Maricopa, Buckeye, Goodyear, and Paradise Valley have also seen increases over the last month. However, the largest declines remain concentrated in the Southeast Valley, encompassing cities such as Tempe, Gilbert, Chandler, and Mesa. Notably, Chandler, which had previously maintained a strong position, has seen a dramatic weakening and is likely to be surpassed by Avondale, potentially falling to third place in the rankings.

The current market dynamics reveal a significant variance in market conditions across the region. Out of 17 cities analyzed, eight remain classified as seller’s markets with a CMI over 110, suggesting strong demand and higher prices favorable to sellers. Conversely, five cities are categorized as buyer's markets, where conditions favor buyers due to lower demand and prices. There are also four cities that are considered balanced markets, indicating a more even dynamic between buyers and sellers.

Furthermore, the persistence of three cities with a CMI over 140, coupled with Scottsdale’s efforts to join this group, highlights the ongoing competitive nature of certain high-demand areas. This variance underscores the complexity of the real estate market, reflecting different economic conditions and buyer preferences across the region. Such insights are crucial for potential investors and homebuyers to understand the current landscape and anticipate future trends in these local markets.

Rates have stayed around the 6.5% mark the last week, a week and a half. It would be good if this started to build a base and solidify rates here with only a positive outlook on the horizon. This gives a good window for buyers to start game planning to hop back in, and for sellers to get close to their list price in order to make them move. So far we have not seen that but rate changes always affect demand in the future from rate drops about 2-4 weeks.

"When you have a dream, you've got to grab it and never let go."
— Carol Burnett

Have a great week everyone!