Market Update January 15th, 2024

The recent developments in the real estate market have been a source of optimism for sellers, as indicated by the latest data on the Cromford® Market Index. This index, a key indicator of housing market trends, has shown an encouraging trend across 17 major cities. Over the past month, there has been a notable shift, with all of these cities reporting an increase in their respective market indices. This change signifies a positive momentum for sellers, contrasting sharply with the predictions of a housing market crash that many forecasters had anticipated. The upward trend is not just a fleeting change but appears to be gaining strength, as evidenced by the significant rise in the index.

Delving into the specifics, the average increase in the Cromford® Market Index for these cities is an impressive 10%. This figure is particularly striking when compared to the 6% increase recorded just a week earlier. Such a substantial jump indicates an accelerating trend that favors sellers. The reasons behind this surge include a faster rate of listings going under contract and a supply that remains well below normal levels. This dynamic is creating an environment where sellers have the upper hand, as buyers are left with fewer options and face increased competition for available properties.

The impact of this trend is not uniform across all cities. Some cities are leading the way in this seller-friendly market. Fountain Hills, Gilbert, Glendale, and Surprise have shown the most significant improvements, emerging as the front-runners in this changing landscape. On the other hand, cities like Tempe, Maricopa, Cave Creek, Avondale, Buckeye, and Paradise Valley were lagging behind. However, it's important to note that even in these areas, the market conditions are now shifting in favor of sellers. The overall picture is a diversified market landscape, where 9 out of the 17 cities are classified as seller's markets, 4 as balanced markets, and the remaining 4 still favor buyers.

Reflecting on these developments, it's clear that the housing market is off to a strong start in the new year. Just a week ago, the sentiment was one of cautious optimism for January, but recent trends justify a more confident outlook. If this positive trajectory continues, we can expect transaction volumes to start picking up, signaling a robust year for the real estate market. Moving forward, the focus will be on tracking annual sales counts, with an eye for stability and a gradual increase in sales. This will be a critical indicator of the market's overall health and its potential trajectory for the rest of the year.

I have a feeling next month's numbers may stabilize as rates stabilize, but we will have to wait and see. Are the rate drops stirring buyer activity back up? Absolutely. Is it becoming a feeding frenzy again like from 2020-2022? Not at all. So plan your real estate needs accordingly!!!

"Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that."
-Martin Luther King, Jr.

Have a great week everyone!