Over the past month, six large cities have shown an increase in their Cromford® Market Index (CMI), marking an improvement from last week when only five cities were trending upward. Avondale's shift in direction accounts for the rise of additional cities. Meanwhile, the average change in CMI over the past month is -4.8%, slightly better than last week’s -5.0%. While the market continues to deteriorate for sellers, the pace of decline has marginally slowed. At the top of the market, Fountain Hills has been the worst performer, experiencing a sharp 24% drop in its CMI over the last month. Buckeye, Paradise Valley, and Surprise also saw significant declines, with deterioration exceeding 10%. These numbers reflect a challenging environment for sellers in these areas, with reduced demand or increased competition weighing heavily on their ability to negotiate favorable deals. Conversely, Chandler, Tempe, and Cave Creek have shown promising growth, each recording CMI gains of 6% or more. Other cities showing upward momentum include Avondale, Peoria, and Phoenix, which have moved into positive territory. These areas provide sellers with improved conditions, signaling greater demand and fewer obstacles in achieving favorable sales outcomes. Overall, the market landscape remains diverse, with seven cities categorized as seller’s markets, five as balanced, and five as buyer’s markets. Among the latter group, all five cities at the bottom of the table have seen declines of 6% or more, underscoring the significant challenges sellers face in these areas. This dynamic highlights the varying degrees of negotiating power across the region, where market conditions are increasingly influenced by location-specific factors.With mortgage rates not expected to change drastically heading into 2025, we will more than likely see a revolving change in demand from city to city month over month as each group of buyers swarm to find the best pricing possible with the best quality home as well. ‘There are only two tragedies in life: one is not getting what one wants, and the other is getting it.’– Oscar Wilde Have a great week everyone!

In 2024, the active listing trend has taken an unusual and unexpected turn, visible in a recent spike in available listings. Represented in light blue, the 2024 trend line reveals a sharp jump over the last two days, with listings approaching the 22,000 mark. This sudden increase has pushed 2024's listings above the levels seen in 2016 and 2015, making it necessary to look back a decade, to 2014, to find a November with more supply in the early to mid part of the month. Such a spike in November suggests potential shifts in the housing market, leaving many wondering about the cause. At the start of 2024, January's listings were actually lower than January 2023’s count. Yet, a distinct shift occurred as the spring months progressed. Unlike most years, when active listings tend to decline during the spring, 2024 maintained a steady or increasing number of listings through that period. Typically, this trend might be expected to taper off as we approach the holidays, with listings usually decreasing between mid-November and the end of December. However, the recent jump has defied this pattern, sparking concern and speculation about whether it signals a larger trend or market anomaly. This unexpected surge raises questions about the factors contributing to an unusually high number of listings so late in the year. There are various possible explanations, including changes in market conditions, seasonal adjustments, or shifts in buyer or seller behavior, all of which could be influencing this sudden increase. Given the typical trend of decreasing listings as the year winds down, many are now pondering whether this spike is the beginning of a new seasonal pattern or perhaps a reaction to broader economic conditions affecting seller urgency or inventory management. Ultimately, it remains unclear whether this recent jump in listings will mark a lasting change or will fade as a minor blip in the housing market. Market watchers are left to wonder: is this a sign of a new trend in listing behaviors, or simply an insignificant short-term deviation? Time will tell if this is just a brief, unusual increase, or the onset of a new trend that could reshape the expectations for seasonal listing patterns.“Duty, honor, country: Those three hallowed words reverently dictate what you ought to be, what you can be, what you will be.”— General Douglas MacArthur Have a great week everyone!

Over the past eight months, the real estate market has increasingly turned against sellers, who might instinctively attribute this shift to weakened buyer demand and persistently high interest rates. However, the primary cause of this change appears to be an increasing supply of available properties. As the months have passed, the inventory of homes for sale has steadily grown, putting more options in front of buyers and diminishing the likelihood that any particular listing will stand out. This intensifying competition among sellers is leading to frequent and often substantial cuts in list prices as they attempt to draw buyer interest. Compounding this trend is the presence of newly built homes, which represent a significant share of the market but only minimally contribute to the count of active listings. The rise in active listings has been significant, with properties without a contract climbing from 15,574 in February to 21,368 currently—a 37% increase. This influx of listings offers buyers an abundance of choices, making it harder for sellers to command attention in a crowded marketplace. As a result, sellers must actively compete with one another, often lowering prices to remain competitive. Additionally, these sellers face competition from new builds, which are drawing an unusually high share of contracts signed in 2024. The surge in available new construction only adds pressure on sellers of existing homes, further intensifying the challenge of attracting buyers. One way to gauge the cooling market conditions is through the contract ratio, which reflects the market's activity level. In February, the contract ratio for all areas and property types was 47.7, signaling a moderately active market; by contrast, this figure has now dropped to 32.46, verging on a cold market. The last time we saw this level in November was a few years ago when iBuyers were liquidating their excess inventory at discounted prices, with over 20,000 active listings at that time. Unlike then, today's situation isn't driven by an unusual surge in inventory but rather a simple imbalance between too many sellers and too few buyers. This disparity is causing the number of unsold homes to build up week by week, placing further pressure on prices. Currently, the Cromford® Market Index is hovering just above the buyer's market threshold, indicating that unless market conditions shift, a period of stronger downward pressure on prices may be on the horizon. As homes linger longer on the market, more sellers may lose patience and resort to lowering their prices in response. However, a possible seasonal reduction in active listings could mitigate this trend somewhat, as sellers typically remove homes from the market during the holiday season. Although an oversupply at the end of the year—like in 2005—can sometimes signal trouble ahead, that scenario appears less likely in 2024. Still, a close watch on both active listings and the contract ratio over the next two months will provide key insights into the market's direction."The best way to predict your future is to create it."– Abraham Lincoln Have a great week everyone!

The mortgage rate news has been unfavorable over the past week, with the typical 30-year fixed rate climbing to approximately 6.91% today from 6.68% last week. This increase brings rates back up to the levels observed in late July, marking a significant rise that could impact housing affordability and buyer activity in the coming weeks. In the context of the Cromford Market Index (CMI), only four large cities are showing an increase over the past month. Notably, this group has seen a slight change since last week: Maricopa has dropped out and been replaced by Phoenix. The inclusion of Phoenix among the cities with rising CMIs is encouraging, as it accounts for roughly 25% of all real estate transactions in the area. Meanwhile, thirteen cities are experiencing a decrease in their CMI, suggesting a potential cooling in those local markets. The average change in the CMI over the past month is -4.5%, a slight decline from last week's -4.0%. Paradise Valley stands out as the worst performer, suffering a significant 30% drop over the most recent month. This sharp decline indicates substantial market adjustments and could be a point of concern for investors and homeowners in that area. Conversely, Tempe has been joined by Cave Creek in posting respectable percentage gains of 7% or more in their CMIs. The other cities with positive movements, represented by green dots, are Peoria and Phoenix. Excluding Paradise Valley, the largest declines continue to be concentrated in the Southwest region, particularly in Avondale, Goodyear, and Buckeye. These trends highlight the varied performance across different cities and underscore the complex dynamics of the current real estate market.Rates jumped back up to 7% as of today, however, the lower rates the past month did not bring in as much demand as initially expected. Either the market will continue to stay like this for the foreseeable future, or some people holding back until after the election. “I hit big or I miss big. I like to live as big as I can.”—Babe Ruth Have a great week everyone!

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!

The brief surge in demand observed during September is beginning to wane, with the number of listings under contract now somewhat lower than in late September. Meanwhile, active supply continues to grow in line with seasonal patterns. This gradual increase in inventory is slowly shifting negotiation power into the hands of buyers. If this trend persists without any significant changes, we are likely headed toward a buyer's market. The Cromford Market Index (CMI) has already dropped below 94, a level that typically indicates a market favoring buyers. This decline suggests that current conditions are beginning to tilt away from sellers, providing buyers with more leverage. Under normal circumstances, we anticipate supply to rise throughout October and well into November. However, after Thanksgiving, the supply usually starts to fade, closing the year at noticeably lower levels. This seasonal reduction in supply could potentially impact market dynamics as we move into the new year. Given these trends, buyers may find increasing opportunities for negotiation in the coming weeks, while sellers might need to adjust their expectations accordingly. Monitoring these market developments will be crucial for all stakeholders as we approach the year's end.Rates have been stabilizing in the mid 6's so we will see if this remains while we enter into the election cycle and see how the markets react afterwards into the holidays. “Real integrity is doing the right thing, knowing that nobody’s going to know whether you did it or not.”― Oprah Winfrey Have a great week everyone!

In September 2024, Maricopa County's real estate market witnessed a noticeable decline in closed transactions for single-family homes and townhouses/condos, as revealed by the recently analyzed affidavits of value. The total number of closed transactions stood at 5,584, marking a decrease of 5.3% from the 5,896 transactions recorded in September 2023 and a 6.4% drop from August 2024. This decline is particularly significant considering there were 21 working days in September 2024 compared to 20 in September 2023; under consistent daily closing rates, an increase of 5.0% would have been anticipated. New home sales were notably impacted, with 1,441 closed transactions—a sharp decline of 11.3% from the 1,624 closings in September 2023 and a slight 0.8% decrease from August 2024. Resale transactions also fell, albeit less dramatically, with 4,143 closings representing a 3.0% drop from 4,272 in September 2023 and an 8.2% decrease from the previous month. Despite these declines, the new home market share remained robust at 25.8% in September 2024, though this is a reduction from 27.5% a year earlier. Amid declining transaction volumes, median sales prices demonstrated resilience. The overall median sales price in September 2024 was $471,995, reflecting a 4.9% increase from September 2023 and a modest 0.4% rise from August 2024. The median sales price for resale homes held steady at $450,000, up 2.3% from the previous year but unchanged from the prior month. New homes experienced a more substantial increase in median sales price, reaching $518,792—an 8.3% rise from September 2023 and a 1.0% uptick from August 2024. However, it's noteworthy that the combined peak median sales price remains at $490,000, achieved in May 2022, indicating current prices are still 3.7% below that peak. The data paints a picture of low transaction volumes coupled with stable pricing, suggesting a market with a slight excess of supply over demand. Looking ahead, there's an expectation for a modest improvement in transaction volumes and for prices to remain stable, albeit with a slight downward tendency due to current market conditions. While the market faces challenges in sales volume, the stability in pricing offers a cautiously optimistic outlook for Maricopa County's real estate sector.Rates jumped back up to about 6.5% Friday afternoon so we will have to keep an eye if they keep rising. I think they will continue to hover around this point up until the election or if whispers start if the Fed is looking to cut rates again any time soon and by how much.“What you lack in talent can be made up with desire, hustle, and giving 110% all the time.”– Don Zimmer Have a great week everyone!

The latest S&P/Case-Shiller Home Price Index numbers were published this Tuesday, offering valuable insights into the housing market across 20 major U.S. cities. This index is a key indicator for economists, investors, and policymakers, as it reflects trends in home prices that can influence economic decisions and strategies. The data serves as a critical barometer for understanding regional and national shifts in the real estate market, offering a snapshot of economic health and consumer confidence. The new report covers home sales during the period from May to July 2024, which means the typical home sale closed in mid-June—over three months ago. It's important to note that Case-Shiller data is inherently lagging; even on the day of its release, it represents market conditions from the recent past rather than current dynamics. This time lag should be considered when interpreting the data, as more recent trends or shifts influenced by factors such as interest rate changes or economic events occurring after mid-June may not be fully captured. Comparing the latest figures to the previous month's series reveals some notable changes. Last month, all 20 cities showed rising prices, but this month, eight of them experienced declines. Cities like Cleveland (+1.10%), Las Vegas (+0.88%), and New York (+0.52%) led in price increases, while San Francisco (-1.09%), San Diego (-0.58%), and Denver (-0.40%) saw the most significant decreases. Phoenix notably rose from 15th to 11th place, aligning closely with the national average monthly increase of +0.10%. The Northern cities, Las Vegas, and the Southeast remain the strongest regions in terms of price growth. Examining year-over-year changes, all 20 cities reported positive price movements compared to one year ago, with the national average standing at +5.0%. New York (+8.8%) and Las Vegas (+8.2%) topped the list, indicating robust growth. Phoenix maintained its 15th-place position with a +2.9% change, placing it in the bottom half and well below the national average—a trend consistent over the past five months. Denver (+1.3%) and Portland (+0.8%) remained at the bottom. Las Vegas's strong performance in both monthly and yearly comparisons underscores its resilience in the current housing market. Compared with the previous month's numbers, we see the following changes: Cleveland +1.10% Las Vegas +0.88% New York +0.52% Chicago +0.45% Detroit +0.39% Miami +0.31% Charlotte +0.23% Atlanta +0.15% Minneapolis +0.14% Washington +0.11% Phoenix +0.09% Boston +0.03% Portland -0.01% Seattle -0.05% Tampa -0.10% Dallas -0.11% Los Angeles -0.28% Denver -0.40% San Diego -0.58% San Francisco -1.09% Comparing year over year, we see the following changes: New York +8.8% Las Vegas +8.2% Los Angeles +7.2% San Diego +7.2% Cleveland +7.0% Chicago +6.7% Detroit +6.6% Boston +6.5% Miami +6.5% Seattle +6.0% Charlotte +5.8% Washington +5.5% Atlanta +4.5% San Francisco +3.4% Phoenix +2.9% Tampa +2.2% Minneapolis +2.0% Dallas +1.9% Denver +1.3% Portland +0.8% "Quality is not an act; it is a habit." — Aristotle Have a great week everyone!

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!

As anticipated, Paradise Valley continues to dominate the luxury real estate market, consistently topping performance charts and widening its lead over Scottsdale over the past three years. Paradise Valley and Scottsdale have experienced an impressive 8.5% year-over-year increase, the highest percentages observed in the market. This substantial growth underscores how robustly the luxury sector has performed compared to other market segments. Not far behind the leaders are Fountain Hills and Rio Verde, which have also shown significant gains. However, Carefree is lagging slightly with only a 2.8% increase. It's important to note that Carefree represents a smaller market, making its annual averages more susceptible to volatility. These fluctuations highlight the nuances within luxury markets of different sizes. A clear trend emerges when examining the performance of central locations versus more remote areas. Central regions like Phoenix have excelled, boasting an 8% increase—the third-best return among the top 40 markets and the highest outside the Northeast Valley. Additionally, areas not traditionally considered luxury markets, such as Youngtown and suburban locales like Gilbert, have also demonstrated strong growth. In contrast, the Southwest Valley exhibits weaker performance, with Avondale, Goodyear, Laveen, and Litchfield Park all posting increases below 3%, although Tolleson remains near the market average. The most underperforming markets tend to be in outer locations, including Coolidge, Arizona City, Tonopah, Eloy, Florence, Casa Grande, Gold Canyon, and Apache Junction. Furthermore, areas designated for residents aged 55 and over have faced challenges; both Sun City and Sun City West reported modest gains of 1.7%, while Sun Lakes fared moderately better with a 4.6% increase. These patterns suggest that proximity to central hubs plays a significant role in real estate performance, and demographic factors could also influence market dynamics.This will be a big week for the economy as Jerome Powell chair of the Federal Reserve speaks Wednesday! Make sure to stay in the know and know what is going on to make the best financial decisions possible! "Setting goals is the first step in turning the invisible into the visible."-Tony Robbins   Have a great week everyone!

The analysis of Maricopa County's real estate market for August reveals some significant trends and fluctuations compared to previous periods. In August, there were 5,936 closed transactions, a decrease of 9.0% from 6,556 in the same month of the previous year, and a 6.2% decline from July's figures. This drop in closed transactions included 1,453 new home sales, down 9.6% year-over-year but showing a 6.4% increase from July, and 4,510 re-sale transactions, decreasing by 8.9% from August 2023 and 9.5% from the preceding month. Despite 22 working days in August 2024 compared to 23 in August 2023, which partly explains the reduced activity, the extent of the decline suggests other influencing factors at play. The real estate pricing dynamics present a slightly different picture. The overall median sales price in August stood at $470,000, marking a 2.4% increase from August 2023 and a slight 0.5% increase from July. Breaking this down further, the median sales price for re-sale homes was $450,000, showing a modest year-over-year increase of 1.1% but remained unchanged from the previous month. In contrast, new homes exhibited a stronger price growth, with the median price reaching $513,633, up 2.7% from the previous year and a 1.5% increase from July. Interestingly, despite the general decline in transaction volumes, the new home market captured a slightly larger share in August 2024, accounting for 24.4% of all sales compared to 24.5% a year earlier. This indicates a shift in buyer preference or market availability favoring new constructions, albeit marginally. It's important to note that while the market has seen overall price increases roughly in line with inflation, it remains 4% below the peak pricing of $490,000 achieved in May 2022, pointing to a market that has not fully recovered to its highest valuation. In summary, Maricopa County's real estate market in August 2024 demonstrated a complex interplay between declining sales volumes and moderately rising prices. While transaction numbers were notably lower, suggesting a cooling market, prices have held relatively stable and even showed slight increases. This suggests that while fewer transactions are occurring, the demand and pricing power remain somewhat resilient, painting a picture of a market experiencing adjustment rather than a downturn. This stable yet sluggish trend might influence future market predictions and investor confidence in the regional real estate landscape. “Start where you are. Use what you have. Do what you can.”—Arthur Ashe   Have a great week everyone!

The real estate market exhibited a notable shift in August, with the supply of active listings without a contract increasing by 5.5% since the beginning of the month. This upturn is particularly significant when compared to the same period last year, showing a 57% increase as of September 1, 2023. Typically, such increases in supply are expected in September, making this August's data particularly intriguing. This pattern suggests a deviation from the usual seasonal trends observed in the housing market, hinting at underlying factors influencing market dynamics.Despite a recent decline in mortgage interest rates, which conventionally stimulates demand and suppresses supply, the expected market response has not materialized. Instead, the overall demand has slightly decreased, while supply has risen. This counterintuitive response highlights the complexity of the housing market's reaction to changes in interest rates. Interestingly, the increase in listings is not uniform across all sectors; the luxury single-family detached homes priced above $3 million actually saw a decrease of 4% in active listings from the previous month, though they are still up 20% year over year. In stark contrast, the segment for homes priced between $300K and $350K experienced an 18% increase in supply during August, a rate more than double that of any other price segment.Delving deeper into the geographical distribution of these changes, Maricopa County, rather than Pinal, witnessed the largest supply surge, particularly in Glendale and West Phoenix. This spike in listings, primarily occurring over an 11-day period from August 15 to August 26, was concentrated in the more affordable ZIP codes of the inner West Valley. These areas are characterized by older housing stock, predominantly from the 1950s and 1960s, but showed no signs of increased distress sales. Remarkably, active single-family listings in these regions rose by 32% across all price ranges, with an even more pronounced increase in the $300K to $350K bracket.This unusual surge in supply within the Inner West Valley prompts speculation about the motivations of sellers in these areas. It appears that homeowners might be seizing the opportunity to list their properties in anticipation of further reductions in interest rates, aiming to secure buyers before committing to purchasing newer, larger homes. This strategy suggests a proactive approach by sellers waiting to upgrade, conditioned by the need to have a buyer lined up as they navigate the complexities of a shifting real estate market.With rates coming down and demand not moving much, It might take rates to come down a lot more for them to make a significant impact on demand. We might need a lot more mortgage rate relief in order to see the demand that a lot of real estate professionals in the industry were calling for. Time to keep your eyes open and pay attention! "He that can have patience can have what he will."-Benjamin Franklin  Have a great week everyone!

The rebound of single-family building permits in Maricopa and Pinal counties in 2024 represents a significant recovery in the construction sector. As of July, there have been 18,498 new single-family units authorized, marking an increase of over 40% compared to the same period in 2023. Despite this growth, these numbers still do not reach the peak years of 2021 and 2022, where permit counts were 21,796 and 19,748, respectively. This surge indicates a renewed confidence among developers, though it’s interesting to note that this increase hasn't extended to the re-sale market, which has seen a 4% decline in closing volumes year-to-date compared to last year, illustrating a peculiar disconnect between new home constructions and re-sales. The optimism of homebuilders is further bolstered by economic factors such as the Federal Reserve's reduced interest rates. This financial environment has buoyed the spirits of investors and builders alike, with many publicly traded development companies experiencing all-time highs in their stock values recently. The positive trends in new home permits reflect a broader confidence in the real estate market, potentially spurred by these lower borrowing costs. A detailed look at the distribution of these new permits across Arizona shows a notable variation in regional growth. Maricopa County saw a 39% rise in permits, while Pinal County recorded a 43% increase. Other counties combined for a 38% upturn. The leading areas for new permits include unincorporated Pinal County, Phoenix, and Surprise, demonstrating a shift in development focus compared to the top cities in the re-sale market, such as Mesa, Glendale, and Scottsdale, which did not rank in the top ten for new constructions. This geographical shift underscores evolving market dynamics and preferences in residential development locations. Lastly, the county administration's handling of areas like San Tan Valley, which has yet to incorporate, reveals the complexities of urban planning in rapidly growing regions. Florence, for example, is issuing more permits than traditionally faster-growing areas like Gilbert and is on pace to surpass Scottsdale. The upcoming vote on whether San Tan Valley should incorporate reflects a critical moment that could reshape administrative oversight and infrastructure development in one of Arizona’s fastest-expanding areas. This scenario underscores the ongoing evolution and challenges within Arizona's real estate and urban development landscape.As we enter into September it is a big month for economic reports. The Federal Reserve might be put in a position to make a rate cut, which will sure affect the markets one way or another. If this starts to put pressure on the 10-year Treasury Yield, we may see mortgage rates start to head even closer to 6%. We will just have to wait and see!"Service to others is the rent you pay for your room here on earth."-Muhammad Ali Have a great week everyone!

The high-end real estate market often experiences a significant slowdown during the summer months, which can cause noticeable distortions in market averages, particularly those related to pricing. This seasonal dip is a common occurrence, affecting the overall market dynamics and skewing data that reflects the true state of the market. To better understand how this happens, it’s essential to examine specific regions within the Greater Phoenix area and compare their performance during the months of April and July.Focusing on the Northeast Valley, where most luxury homes are located, we define this region as including Carefree, Cave Creek, Fort McDowell, Fountain Hills, Paradise Valley, Rio Verde, and Scottsdale, with the addition of Phoenix 85016 and 85018, while excluding Scottsdale 85257. In this area, the number of single-family detached home sales dropped from 662 in April to 440 in July, reflecting a substantial 34% decline in unit volume. Correspondingly, the average price per square foot also decreased from $558.56 to $505.70, marking a 9.5% decline.In contrast, the rest of the Greater Phoenix area, excluding the defined Northeast Valley, showed a much smaller decrease in market activity. The sales count for single-family detached homes fell from 4,631 in April to 4,267 in July, representing only an 8% drop. Additionally, the average price per square foot in this broader area decreased slightly from $262.36 to $254.26, a modest 3% decline. These figures indicate that the high-end market in the Northeast Valley has a more pronounced impact on the overall market averages.When examining Greater Phoenix as a whole, the weakening contribution from luxury sales is evident. The average price per square foot for the entire region fell from $313.17 in April to $289.28 in July, a 7.6% decline, which is more than double the decrease seen in areas outside the Northeast Valley. However, it is expected that high-end sales will rebound as temperatures cool, leading to a recovery in their contribution to the market, and subsequently, the stabilization of average pricing.Now is the time to prepare especially if interest rates start cooling even more! “When you arise in the morning, think of what a privilege it is to be alive, to think, to enjoy, to love.”—Marcus Aurelius Have a great week everyone!

The trends in the CMI (City Market Index) over the past month indicate a gradual recovery in several key markets, despite a varied performance across different cities. Over the past month, there has been an average decline of -1.8% in the CMI, showing a slowing in the rate of decline when compared to the more significant -4.4% seen last week. This moderation marks a continuation of the positive trend that began three weeks ago. Interestingly, in just the past week, the average CMI saw a slight increase of +0.4%, suggesting a subtle yet positive shift between August 1 and August 8. In terms of geographic performance, Fountain Hills, Cave Creek, and Scottsdale have demonstrated the largest percentage gains, indicating that the higher end of the market is exhibiting the strongest resistance against the broader market's weakness. On the other hand, cities like Maricopa, Buckeye, Goodyear, and Paradise Valley have also seen increases over the last month. However, the largest declines remain concentrated in the Southeast Valley, encompassing cities such as Tempe, Gilbert, Chandler, and Mesa. Notably, Chandler, which had previously maintained a strong position, has seen a dramatic weakening and is likely to be surpassed by Avondale, potentially falling to third place in the rankings. The current market dynamics reveal a significant variance in market conditions across the region. Out of 17 cities analyzed, eight remain classified as seller’s markets with a CMI over 110, suggesting strong demand and higher prices favorable to sellers. Conversely, five cities are categorized as buyer's markets, where conditions favor buyers due to lower demand and prices. There are also four cities that are considered balanced markets, indicating a more even dynamic between buyers and sellers. Furthermore, the persistence of three cities with a CMI over 140, coupled with Scottsdale’s efforts to join this group, highlights the ongoing competitive nature of certain high-demand areas. This variance underscores the complexity of the real estate market, reflecting different economic conditions and buyer preferences across the region. Such insights are crucial for potential investors and homebuyers to understand the current landscape and anticipate future trends in these local markets.Rates have stayed around the 6.5% mark the last week, a week and a half. It would be good if this started to build a base and solidify rates here with only a positive outlook on the horizon. This gives a good window for buyers to start game planning to hop back in, and for sellers to get close to their list price in order to make them move. So far we have not seen that but rate changes always affect demand in the future from rate drops about 2-4 weeks."When you have a dream, you've got to grab it and never let go."— Carol Burnett Have a great week everyone!

In July 2024, Maricopa County recorded a total of 6,360 closed real estate transactions, reflecting a 4.6% increase from the previous year's figure of 6,081 in July 2023, but a slight 4.1% decrease from June's numbers. Of these, 1,378 were newly constructed homes, marking a modest growth of 1.9% compared to 1,352 in the same month the previous year, though this segment saw a significant 13% drop from June. The resale market was more dynamic, with 4,982 transactions completed, up 5.4% from 4,729 in July 2023 and only a minimal 1.3% decrease from the previous month. This activity occurred over 22 working days, one more than in July 2023, offering a partial explanation for the increase in closings. The pricing dynamics in the market also painted a mixed picture. The overall median sales price for July stood at $467,545, a slight increase of 0.5% from July 2023 but a decrease of 1.6% from the previous month. Resale homes had a median price of $450,000, up 1.1% year-over-year but down by 3.2% from June, indicating some softening in prices. In contrast, new homes had a median price of $506,240, which was down significantly by 5.1% from the previous year, although it showed a small recovery of 0.5% from June. The market share of new homes decreased slightly to 21.7% from 22.2% a year earlier, suggesting a shift in buyer preference or possibly a response to pricing dynamics. Resale prices have notably struggled, remaining well below the peak of $486,000 reached in May 2022, prior to the liquidation sales initiated by iBuyers. This decline underscores the broader trend of weakening prices in the resale segment, contrasted with the overall median sales price increase of only 0.5%—a figure that falls below the inflation rate, indicating that, in real terms, homes have become more affordable compared to last year. Despite the nominal increase in median household incomes over the past year, the housing market in Maricopa County has seen improved affordability without a corresponding increase in demand. This suggests potential buyers may be anticipating further reductions in mortgage rates, influenced by recent statements from the Federal Reserve indicating possible adjustments. The observed trends cover both single-family homes and townhouse/condo residences, reflecting a comprehensive view of the county’s housing market dynamics during this period.If you are a buyer that has been waiting, KEEP EYES ON RATES! As of today, the 30-year has dropped significantly to 6.34%. Have to keep eye on this to see if there is any bounce back or if rates possibly keep falling with all this talk of markets crashing globally as investors continue to flock to the certainty of bonds. If so might be an opportune time to take advantage of the rate reduction and weary sellers who are not being educated properly by subpar agents on the market's current market conditions! “Failure is simply the opportunity to begin again, this time more intelligently.”—Henry Ford Have a great week everyone!

The imminent settlement of the National Association of Realtors (NAR) Commission has introduced a cloud of uncertainty and confusion within the real estate industry. The Council of Multiple Listing Services (CMLS), representing 225 MLS providers nationwide, has refrained from offering best practice guidance to its members. Instead, it has encouraged them to engage in "thoughtful conversations" and to independently navigate their responses, which suggests that the impact of the settlement could vary widely across different regions. This variety in response is further complicated by the NAR's settlement FAQ webpage, which has expanded to over 100 questions, indicating the complexity and widespread concern about the settlement’s implications. Recent data on commission rates show a slight decrease but maintain a relative consistency, with buyer's agents historically earning between 2.6% and 2.8%, and listing agents earning between 2.8% and 3.2%. These rates have recently adjusted to slightly lower percentages. The stability of these rates amidst the fluctuating market dynamics underscores a persistent uncertainty about future commission structures and their potential variations over the coming year. This lack of consensus among industry professionals reflects the broader ambiguity surrounding the settlement's long-term impact on real estate transactions. While the settlement is poised to impact real estate agents significantly, its effects on the broader housing market are expected to be less pronounced, likely reinforcing existing trends rather than initiating new ones. However, the real estate market is currently experiencing a dip in closing activities, with a notable decrease from the previous year and a significant deviation from the long-term average. This reduction in activity, coupled with legal and procedural uncertainties, suggests that the declining rate of closings might persist until potentially mitigated by more favorable mortgage rates. The Department of Justice (DOJ) has criticized the high real estate commissions in the U.S. compared to other developed economies and is pushing for reforms to lower these costs. They advocate for a model where buyer’s agent commissions are negotiated directly between the buyer and their agent, independent of the seller or selling agent's influence. This shift could lead to lower upfront costs for buyers, but it may also reduce the level of advice and support buyers receive, which could be detrimental given the significant financial stakes involved in real estate transactions. Thus, while the settlement aims to reduce costs, the overall quality and comprehensiveness of real estate services could also decline, echoing the adage that one often gets what they pay for, particularly in professional services like real estate and legal advice.If you have questions about the recent changes coming to real estate commissions and how they affect you and your home pricing, please reach out to me I am here to help guide you through the confusion the media throws out there with misleading and false information! It is vital to understand the changes and how just listening to the media could tremendously impact you in a negative way! “An unexamined life is not worth living.”— Socrates Have a great week everyone!

In discussing real estate prices on this market update, I primarily present figures in nominal dollars, as is common practice. However, this approach can be misleading when comparing the affordability of homes today to those from decades past. Specifically, using nominal dollars to discuss price changes over a 24-year period fails to account for the varying purchasing power of the dollar at different times. For instance, in January 2001, the average price per square foot in Greater Phoenix for all types of dwellings was $99.04. Fast forward to June 2024, and this average has escalated to $299.44. At first glance, this suggests a staggering 202% increase, indicating that prices have more than tripled. Yet, this comparison doesn’t consider the significant decrease in the dollar's purchasing power over time—a dollar in 2001 was worth 79% more than a dollar in 2024, according to the Consumer Price Index (CPI). To provide a more accurate assessment, it's insightful to look at price adjustments made for inflation. The accompanying chart delineates the average price per square foot over time, with the nominal figures shown in green and the inflation-adjusted figures in blue. The latter are recalculated to 2001 dollars using monthly adjustments based on the CPI. This adjusted data reveals that while homes are indeed more costly in 2024 than in 2001, the real-term price increase is 69%—significantly lower than the nominal increase of 202%. Further analysis of the real-term price data yields additional intriguing insights about the housing market's fluctuations over the years. From September 2008 to April 2015—a seven-year span—real home prices dipped below their January 2001 levels, suggesting a prolonged opportunity to purchase homes at relatively low prices. Conversely, today's real home prices, though below the peak in May 2022, align closely with those from the latter half of 2006 and late 2021. Notably, the housing market experienced two major surges, one from mid-2004 to mid-2005 and another from mid-2020 to mid-2022, both brief yet intense periods of growth. Conversely, the significant downturn from early 2007 to early 2009 marked the major bust phase, distinctively shorter in duration compared to the prolonged excess inventory phase from 2006 to 2011 that followed the first boom. These observations illustrate the nuanced dynamics of the housing market over the last two decades. The distinction between nominal and real prices not only highlights the actual changes in housing affordability but also contextualizes the economic factors influencing these shifts. By examining these patterns, we gain a clearer understanding of the market's past trends and can better anticipate future movements."There are risks and costs to action. But they are far less than the long-range risks of comfortable inaction."-John F. Kennedy Have a great week everyone!

Over the past month, the average change in the Cromford Market Index (CMI) has been a notable -7.2%, a more significant decline than the -6.9% observed the previous week. However, there is a silver lining as the rate of decline appears to be slowing. This week’s -0.3% change is an improvement compared to the -0.8% measured last week. If this trend continues, we could potentially see a reduction in the monthly deterioration soon. In the past two weeks, only three cities have shown an increase in their CMI, while fourteen cities have experienced a decline. The three cities with improving CMI are the same as last week, with Avondale standing out for its significant percentage increase. This limited improvement contrasts with the broader trend of declining market indices across most cities. A substantial shift in favor of buyers has been observed in several cities, including Tempe, Gilbert, Fountain Hills, Paradise Valley, Goodyear, Cave Creek, Glendale, and Chandler. Despite this shift, nine out of seventeen cities remain strong seller's markets, with indices over 110. Two cities are balanced, and six have transitioned into buyer's markets. Notably, only three cities maintain a CMI above 140. Although there has been little change since last week, the market is approaching a balance without clear signs of a widespread shift towards a buyer's market. The recent release of benign Consumer Price Index (CPI) data has had a small downward impact on mortgage rates but has significantly boosted the share prices of home builders, with KB Home seeing a rise of over 10% in anticipation of improved market conditions if the Federal Reserve lowers rates. Overall supply seems to be leveling off, halting the upward trend observed since the beginning of the year. Should interest rates fall, any resulting improvement in demand could potentially reverse the CMI's direction. However, this remains speculative and unconfirmed at this stage. Further developments will be closely monitored and reported.Mortgage rates will continue to be the steer to market demand. I have noticed the last week we have been below the 7% average and have been trending down which might give some more push of buyers into the market in the next month or two if it continues to drop!“The best way out is always through.”―Robert Frost  Have a great week everyone!

In recent analyses of the real estate market, particularly focusing on the single-family detached segment, we have delved into contract ratios across various price ranges, comparing data from July 1st, 2024 to the same date in 2023 and 2022 (See 2nd graph below). This examination provides a comprehensive view of market dynamics over the past three years, revealing shifts in buyer behavior and market conditions. By scrutinizing these changes, we can better understand the factors influencing the real estate market's ebb and flow. The market conditions of July 2022 were notably turbulent due to a rapid increase in interest rates, which sent shockwaves through the real estate sector. The immediate impact was a significant drop in contract ratios from their highs in June 2022, particularly affecting the low to mid price ranges. This sudden shift was largely driven by buyer panic, reacting to the climbing interest rates, which markedly cooled the market enthusiasm that was present earlier in the summer. However, by July 2023, the market demonstrated a robust recovery, driven by a stark reduction in supply. This scarcity of available properties propelled contract ratios to elevated levels, marking a return to a more competitive market environment. Notably, this resurgence was most pronounced at the lower end of the market, where competition intensified, reflecting a significant turnaround from the previous year’s downturn. Moving forward to July 2024, the market presents a contrasting scenario characterized by a more balanced interplay between supply and demand. Although certain price segments, such as those under $300K and between $400K and $500K, have shown stronger performance compared to two years ago, the overall market is softer than in 2022. It is interesting to observe that the segment above $10M has bucked the trend, showing a hotter market than in both the previous years, whereas luxury price ranges between $800K and $10M have cooled significantly, indicating a shift in buyer interest and market dynamics. Through these observations, we gain a nuanced understanding of the varying forces at play across different market segments.We are seeing two different buyer pools in split markets right now. Those in the ultra-luxury market, and those in the starter home/move-up market! Know your sub-market and know how pricing and demand are affecting each other right now!   “I have not failed. I’ve just found 10,000 ways that won’t work.”― Thomas A. Edison Have a great week everyone!