Market Update February 26th, 2024

As we embarked on the new year, there was a prevailing optimism that sales volumes would experience a turnaround and start an upward trajectory, particularly with the advent of the Spring season, traditionally a robust period for sales. However, this anticipated rebound has not materialized as hoped. The latest data reveals a concerning trend, with the annual closing rate now standing at 72,223 across various areas and types, a slight but continuous decline from the previous weeks' figures of 72,359 and 72,448, respectively. This pattern is disheartening and suggests that the market is not recovering as expected.

While certain market segments are witnessing modest growth, the broader picture remains challenging, particularly in significant areas such as the City of Phoenix. Here, the number of single-family home closings has dipped below 10,000 annually for the first time since 2008, a stark indicator of the current market conditions. An analysis of the Cromford® Market Index over the past month shows mixed results, with 11 cities experiencing an uptick, while 6 have seen a decline. Notably, cities like Scottsdale, Paradise Valley, Fountain Hills, Surprise, Buckeye, and Goodyear are trending towards a buyer's market, a shift that could have varied implications for different stakeholders in the real estate sector.

The Cromford® Market Index, a critical gauge of market dynamics, has seen an average monthly increase of 3.1% across 17 cities, a decrease from the 5.3% recorded last week. This deceleration is tempered by the strong performances of Chandler, Mesa, Gilbert, Tempe, and Phoenix, which have contributed to an overall positive change over the month. However, the weakening trend is a cause for concern, signaling that the positive momentum might be short-lived if current conditions persist.

The market's composition reveals a nuanced landscape, with 10 out of 17 cities classified as seller's markets, indicating a competitive environment for buyers. Conversely, 3 cities are balanced, and 4 are tilted towards buyer's markets, suggesting variability in market conditions across different locales. The Cromford® Market Index currently hovers around 117, a slight decrease over the past week, reflecting a market in flux. While demand continues to rise, albeit slowly, so does supply, with both metrics inching towards a 'normal' level, represented by an index reading of 100. The journey towards equilibrium is ongoing, with the Cromford® Supply Index at 66.6 still trailing behind the Demand Index at 78.1 but increasing at a marginally faster rate, hinting at a gradual but uncertain path to market stabilization.

This furthers my talking point in my YouTube video below that we have seen a crash happen, not in pricing unfortunately but in TRANSACTIONS. And with the current economic storm, we are dealing with, high rates, job layoffs, and high housing pricing. The current ratio of limited supply and demand could possibly keep this market in limbo for a while, a lot of flatness.

"Success is not final, failure is not fatal: It is the courage to continue that counts."
-Winston Churchill

Have a great week everyone!