Market Update January 6th, 2025

This week marks a notable improvement in the real estate market for sellers compared to the previous month. Data from the Cromford® Market Index (CMI) reveals that 15 major cities have experienced an increase in their index over the past month, while only 2 have shown a decline. This positive shift is accompanied by significant market activity, including an unprecedented number of listings expiring at the end of the year—nearly 900 in total. These expirations reduced the number of active listings by approximately 550 and the number of temporary off-market listings by about 250, impacting overall inventory levels.

The average change in the CMI over the past month is a robust +8.8%, building on last week’s +6.2% gain. However, the dramatic rise in expired listings has introduced some complexity to the market. The number of expirations this year is more than double what it was 12 months ago, contributing to a drop in the listing success rate, which has fallen below 65%. For comparison, the success rate stood at over 68% a year ago. As we exit the holiday season, the favorable seasonal trends that previously reduced supply have ended, and we expect the number of active listings to grow again. How long this trend lasts will be crucial in determining the trajectory of the market in 2025.

Several cities are showing remarkable progress in their CMI scores. Tempe, Paradise Valley, Fountain Hills, Chandler, Scottsdale, Peoria, and Gilbert have all posted double-digit percentage improvements, with Goodyear and Glendale close behind. However, not all cities are benefiting from these positive trends. Maricopa and Surprise have failed to show improvement and are still grappling with an imbalance between supply and demand. This underscores the varied dynamics across the market, with some areas thriving while others continue to face challenges.

Currently, 9 cities are classified as seller’s markets, 3 as balanced markets, and 5 as buyer’s markets. The cities in buyer’s markets, such as Maricopa and Buckeye, are burdened by a surplus of inventory relative to demand. In contrast, the top-performing cities are characterized by limited supply and strong demand, particularly in more expensive areas. These pricier segments of the market are supported by active participation from wealthier buyers, who are helping to stabilize these areas despite broader fluctuations in inventory and listing success rates.

"A person who never made a mistake never tried anything new."
– Albert Einstein

Have a great week everyone!