Market Update September 23rd, 2024

Over the past two weeks, the negative trend in the housing market has not only continued but also gained momentum. Buyers are steadily acquiring more negotiation power, although this shift remains mild and is primarily concentrated within the lower and middle price ranges. This development indicates a subtle but noteworthy change in market dynamics, favoring buyers in these specific segments.

In examining the Cromford® Market Index (CMI) over the past month, we observe that seven cities have experienced an increase. Conversely, ten cities, including the two largest—Phoenix and Mesa—have seen a decrease in their CMI. The average change in the CMI across all cities is -1.3%, a decline from last week's -0.7%. Notably, this average decline would be more pronounced if not for the significant uptick in Paradise Valley, which has risen sharply during the same period.

Fountain Hills stands out with a respectable 10% gain in its CMI, signaling a strengthening market in that area. Other cities showing modest increases include Buckeye, Scottsdale, Cave Creek, Surprise, and Glendale, though their gains are relatively unimpressive. On the other hand, the most substantial declines are observed in Avondale, Chandler, Phoenix, Peoria, and Maricopa, indicating a weakening market presence in these locations.

Analyzing the broader market landscape, nine out of seventeen cities remain seller's markets with CMI scores over 110, although three of these are just below 120. Three cities have achieved a balanced market status, while the remaining five have shifted into buyer's markets. Interestingly, two cities now boast CMI scores over 140, both predominantly featuring more expensive homes. This suggests that the luxury market continues to favor sellers more significantly than other market segments. Despite some minor signs of improving demand, the supply is increasing at a faster rate, gradually tipping the balance in favor of buyers across most areas.

We should be able to see if the recent mortgage rates drop start pulling in demand overall. There should be about a 30-day delay in getting results from these changes as buyers start to make their moves and lock in rates starting now as they go out looking to purchase a new home in the coming weeks. 

"If you fell down yesterday, stand up today."
 — H.G. Wells

Have a great week everyone!