Market Update October 21st, 2024

The Listing Success Rate is one of the most revealing and reliable indicators of the housing market's health, yet it is seldom measured except by the Cromford Report. In stark contrast, the average days on the market is a comparatively dull and meaningless statistic, though it is measured and reported almost everywhere. We recommend disregarding the average days on the market; while it might hold interest for a specific listing, its statistical average reveals little useful information about the state of the market.

Currently, our month-to-date Listing Success Rate is 71%, which is above the long-term average of 68%, though slightly below the 75% recorded at this time last year. This suggests that the market is close to normal and not improving significantly. However, this might not feel like a return to normalcy, especially considering that from 2011 to 2022, the market stayed above normal almost continuously. Consequently, a normal market now feels much worse than the elevated conditions experienced during that period. Moreover, we have had little experience of normalcy in the last 24 years, as the market has predominantly been better or worse than normal.

For those who were active between 2006 and 2011, the current market is considerably better. During that five-year period, the Listing Success Rate stayed below 61% and often fell below 40%, meaning that far more listings failed than succeeded. Conversely, from 2020 to 2022, we witnessed an unusually strong market where the Listing Success Rate exceeded 90% for extended periods.

Analyzing the data reveals that Listing Success Rates are generally higher than average for lower-priced properties and lower for higher-priced ones. Presently, the success rate for listings priced at $2 million and above is 50.6%, whereas it is around 79% for those priced between $250,000 and $400,000. Interestingly, properties priced extremely low, under $200,000, have a lower success rate of about 56%, often due to serious disadvantages causing them to be priced significantly below the median home price. It is important to exercise caution when interpreting Listing Success Rates in small sample sizes, such as a single ZIP code or small city, as these numbers can fluctuate wildly and offer little useful information. Over the past 90 days, we can rank the large cities as follows: Buckeye at 79.5%, Peoria at 77.9%, Chandler at 77.7%, Queen Creek at 77.1%, Gilbert and Avondale both at 75.9%, Glendale at 73.7%, Maricopa at 74.5%, Surprise at 72.3%, Mesa at 72.6%, Fountain Hills at 72.2%, Tempe at 71.9%, Goodyear at 71.2%, Phoenix at 71.1%, Scottsdale at 65.7%, Cave Creek at 60.8%, and Paradise Valley significantly lower at 39.3%. These figures underscore how success rates can vary across different locales, further emphasizing the need for careful analysis when considering market data.

"Failure will never overtake me if my determination to succeed is strong enough."
-Og Mandino

Have a great week everyone!