In recent market analyses, there has been a significant observation concerning real estate pricing: the average price per square foot across various regions and property types has once again surpassed the $300 mark. This resurgence in pricing is an important indicator of the current market dynamics, which seem to reflect a recovery from past fluctuations. Such a milestone is crucial for both buyers and sellers as it affects overall market sentiment and could potentially influence future pricing strategies and real estate investments. The historical context of this pricing trend is marked by a peak record of $306.39 per square foot on June 10, 2022. Following this high, the market experienced a notable correction of 14%, plummeting to a low of $263.83 by January 17, 2023. This downturn was significantly driven by a wave of inventory sell-offs from iBuyers, highlighting a period of volatility within the real estate sector. Such movements are vital for understanding the ebb and flow of market conditions and can guide future investment and selling decisions. Since the start of 2023, there has been a gradual and steady increase in the average price per square foot. Comparatively, the price was $279.86 a year ago, and over the past twelve months, it has witnessed a growth of 7.3%. This upward trajectory suggests a stabilizing market that is slowly regaining its strength after the previous year's challenges. Observing such trends is essential for predicting the short-term movements in the market and for strategizing accordingly. Looking ahead, the market is poised at a critical juncture. With current prices needing only a 2% increase to set a new all-time high, there is palpable anticipation about the potential for reaching new milestones. This impending possibility could play a significant role in shaping market strategies, affecting everything from individual buying decisions to broader investment perspectives. Such a scenario underscores the dynamic and ever-changing nature of real estate markets, making it imperative for stakeholders to stay informed and agile in their operational approaches.With all this information that seems to be positive in a hostile rate environment, let me ask you, do you think pricing will only go up if mortgage rates drop drastically? If inventory stays close to current levels then yes I do, I think rates dropping will only cause a secondary boom when buyers who have been on the sideline waiting, rush to make offers, as well as sellers who are trapped in their low-interest rate homes."In three words I can sum up everything I've learned about life: It goes on."— Robert Frost Have a great week everyone!

Over the past month, the real estate market dynamics, as measured by the Cromford® Market Index (CMI), have seen a subtle yet noticeable shift. The average change in the CMI across various locations has increased by +0.3%, a modest rise from the previous week’s stagnant zero percent change. This alteration presents a complex landscape, with some cities experiencing significant improvements for sellers, while others face substantial declines.A detailed breakdown (see graph below) of the changes in the CMI reveals a division in market trends among seventeen cities. Ten of these cities have recorded an increase in their CMI, indicating a shift towards conditions more favorable to sellers. In contrast, seven cities have witnessed a decline in their index, suggesting a turn towards buyer-friendly conditions. This distribution mirrors the situation from the previous week, showing a consistent pattern in market behavior across these locations.Focusing on individual cities, Tempe, Goodyear, and Paradise Valley have emerged as the standout locations where conditions have shifted markedly in favor of sellers. They are closely followed by Avondale and Scottsdale, which have also seen significant seller advantages. On the other hand, Fountain Hills, Queen Creek, Cave Creek, and Buckeye are moving towards a market more favorable to buyers, with Peoria trailing just behind in this trend. Notably, Buckeye continues to struggle, positioned at the bottom of the table, while Chandler remains the leading city with the most robust seller's market.Analyzing the broader market conditions, the balance between seller's markets, balanced markets, and buyer's markets remains unchanged from the previous week. Currently, ten of the seventeen cities are classified as seller's markets, three maintain a balanced market status, and four are categorized as buyer's markets. This consistent mix underscores the varied yet stable market conditions that continue to define the regional real estate landscape.I expect some of this landscape to change pretty drastically next month if rates continue to stay at this level after peaking at 7.4% as of today! However, if SUPPLY stays at this level like I have been saying for the last year, then pricing shall not see any major crash, instead days on the market will drag out even longer. Only those who NEED to sell will slash their pricing to offload an unwanted or undesired property."A life is not important except in the impact it has on other lives."-Jackie Robinson Have a great week everyone!

Reflecting on the housing market landscape from a decade and a half ago, the conversation was predominantly centered around foreclosures, a stark contrast to the current scenario where months can pass without the topic even arising. This significant shift highlights how the dynamics of the housing market have evolved over the years, moving away from a period dominated by financial distress and uncertainty to a more stable and secure environment. The past narrative was fraught with the challenges and turmoil of foreclosures, underscoring a period of notable instability in the housing market. Foreclosures, by their very nature, represent a challenging and often distressing time for homeowners and borrowers caught in the midst of financial difficulties, not to mention the unfavorable circumstances it poses for lenders. This phenomenon, which used to capture a considerable amount of attention in the housing sector, reflects the severe consequences of financial mismanagement and economic downturns. Despite the persistent presence of foreclosures, their impact on individuals and financial institutions continues to be profound, illustrating the personal and economic turmoil involved. However, the narrative surrounding foreclosures has dramatically shifted, with current figures painting a vastly different picture from fifteen years ago. Today, the incidence of foreclosures is remarkably low, rendering them almost negligible in their impact on the broader housing market. Data from Maricopa County exemplifies this trend, with ongoing foreclosures significantly lower than in previous years, indicating a stable and recovering housing market. This decline in foreclosures signifies not only a stronger economic landscape but also a reduced influence on the general housing market trends, suggesting a positive outlook for the foreseeable future. Moreover, the process surrounding foreclosures has transformed, with homeowners now more likely to sell their properties privately before reaching the point of a trustee sale. This shift, alongside the reduction in the number of homes auctioned by trustees, marks a significant change in how foreclosures are handled, reflecting a more proactive approach by homeowners to mitigate financial loss. Despite periodic predictions of a foreclosure surge by various analysts, these forecasts have consistently been proven incorrect, underscoring the resilience and recovery of the housing market from its past challenges. The current state of foreclosures in the housing market serves as a testament to the significant strides made towards stability and growth, a far cry from the turbulence of fifteen years ago.Just remember the news loves reporting doomsday stuff, it is how they get views. So when they say foreclosures have jumped so and so % this month, they are not wrong, just misleading because the true story is we are still at all-time lows for foreclosures and right now no signs showing that will change while prices continue to hold. “What we fear doing most is usually what we most need to do.”-Tim Ferriss Have a great week everyone!

The housing market, particularly in the resale segment, has experienced a noticeable decrease in transaction volumes over several months, highlighting a trend of stagnation within this part of the industry. Conversely, the market for new homes tells a strikingly different story, one of growth and increasing demand. During the initial months of 2024, builders in Maricopa and Pinal counties reported closing on 3,351 new homes, marking the highest figure since 2006 and representing a nearly 16% increase from the previous year. This surge in new home sales is significantly drawing potential buyers away from the resale market, with the impact felt more profoundly in Pinal County, where the increase in closings reached an impressive 32% over the previous year. In Maricopa County alone, the rise in new home closings surpassed 10%, while the resale market saw a slight decline of 0.4% in the same timeframe. This shift in market dynamics suggests a growing preference for new construction, which, despite traditionally being more costly, now presents a competitive edge in pricing. Surprisingly, the average price per square foot for new homes in February 2024 was $269.75 across both counties, considerably lower than the resale average of $298.55. This competitive pricing can largely be attributed to the strategic placement of new developments in more affordable locations further from the urban center, where land costs are lower, thus offering greater value to homebuyers. The principle of "location, location, location" remains paramount in real estate, underscoring the immutable value of a property's geographical placement. With the rise of remote work, the location has taken on new dimensions of significance, allowing individuals to save substantially by choosing homes in less central areas without compromising on the quality of life. This evolving dynamic suggests that the willingness to live farther from city centers can yield significant financial benefits, a trend bolstered by the current pricing strategies in the new home segment. Data from the Cromford® Public section, which draws on public records rather than MLS data, provides a comprehensive and slightly more accurate analysis of these market trends, despite being somewhat delayed. This approach is essential for new home sales analysis, as a significant portion of these transactions do not go through the MLS. Thus, relying on public records offers a more complete picture of the market, underscoring the importance of accuracy and timeliness in real estate data. As the market continues to evolve, such detailed insights are invaluable for understanding the shifting landscapes of new and resale home sales.With rates hovering around 7%, New home builders will continue to have a leg up on resale listings due to the high-profit margins, they can give back a tremendous amount of seller credits back to buyers. Something worth monitoring if this remains true if rates start to drop again.  "One reason people resist change is because they focus on what they have to give up, instead of what they have to gain." - Rick Godwin Have a great week everyone!

In the recent assessment of the real estate market dynamics, a subtle yet noticeable shift has occurred, marking a slight deterioration for sellers compared to the previous week. This trend is reflected in the average change in the Cromford® Market Index (CMI) over the last month, which registered a marginal increase of +0.1%, a decrease from the +0.4% observed earlier. This minor shift indicates a gradual transformation in market conditions, with a discernible expansion in the disparity between the highest and lowest-performing cities in the table, suggesting a nuanced yet significant change in the real estate landscape. Analyzing the performance of individual cities provides a clearer picture of this evolving market scenario. Among the cities evaluated, seven have shown an improvement in their Cromford® Market Index over the last month, while ten cities have experienced a decline. Mesa and Avondale stand out for their contribution to the positive average, with substantial support from Maricopa and Tempe. However, it's noteworthy that apart from these cities, none have reported percentage increases surpassing 3%. This delineation highlights the concentration of positive momentum within a limited geographical scope. On the flip side, Goodyear and Buckeye are leading the downward trend, with Gilbert now joining their ranks. Buckeye, in particular, has significantly lagged, positioning it firmly at the bottom of the index. Conversely, Chandler exhibits a different trajectory. Despite losing some momentum in the last few weeks, Chandler's substantial lead at the top of the table ensures its dominance, with no immediate competitors poised to challenge its position. This indicates a robust seller's market in Chandler, contrasting sharply with the downward trends observed in other cities. The city's sustained performance underscores the variable nature of real estate markets, where local dynamics and conditions heavily influence market indices and seller advantages. Overall, the current market composition reveals that 10 out of the 17 cities surveyed remain seller's markets, indicating that despite the slight shifts, sellers still hold a significant advantage in the majority of these areas. Meanwhile, three cities have achieved a balanced market, and four are characterized as buyer's markets. This distribution underscores the complex and varied landscape of real estate, where market conditions fluctuate between cities, reflecting a diverse array of opportunities and challenges for sellers, buyers, and investors alike. The slight deterioration for sellers highlights the importance of staying informed and agile in a constantly evolving market.Rates continue to hover around the 7% mark, still holding hostage want-to-be sellers and keeping out buyers looking for an affordable payment. As long as inventory has no major flood of homes and demand stays at this pace, there is no expectation to see prices significantly drop or jump for that matter in these current market conditions. "Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble."– Warren Buffett Have a great week everyone!

The landscape of housing affordability in the United States has evolved dramatically, influenced by factors beyond just high mortgage rates. A few years back, an average household earning $59,000 annually could easily secure a mortgage, ensuring their housing costs didn't exceed 30% of their monthly income with just a 10% down payment. This affordability metric, however, has shifted drastically today. Despite an increase in the median household income from $66,000 in 2020 to about $81,000 in 2024, the rise in wages hasn't paralleled the surge in housing costs, making the dream of homeownership increasingly out of reach for many Americans.Recent analysis by housing experts underscores the stark reality that prospective homeowners now require a salary of approximately $106,500 to afford the median-priced home, marking an 80% jump from early 2020. This disconnection between housing prices and average wages has been widening, particularly since the mid-1990s, rendering homes less affordable. A contributing factor to this trend is the tightening of housing supply. A significant reduction in the number of new homes being built, coupled with stringent land-use and zoning regulations, has kept the real estate market tight, pushing prices upward even in the face of dwindling affordability.Experts argue that addressing the root cause of this supply crunch is critical to improving housing affordability. Restrictive building and land-use policies hinder the construction of new homes, exacerbating the supply shortage. To combat this, there's a call for policymakers to facilitate the building process by relaxing these stringent regulations, which include limitations on building heights and minimum lot sizes. Such reforms would not only increase housing supply but also, by extension, make housing more accessible and affordable to a larger segment of the population.There are, however, glimpses of progress in certain regions where relaxed zoning rules have spurred a boom in housing construction, particularly in markets allowing for smaller, attached homes. This increase in housing inventory is a positive step towards addressing the demand for more affordable living spaces. Nonetheless, the push for more flexible local zoning regulations, supported by federal incentives for developers, is essential in scaling up the supply of affordable housing nationwide. As the population continues to grow, so does the need for more housing, making it imperative to adapt our policies to accommodate this inevitable growth.P.S.- I am sure many of you may have heard about the NAR settlement in a class action lawsuit on commission rules for the Real Estate industry last week. Lots of information developing along with a lot of misinformation as well. I will be providing answers on this in the following weeks as I speak with my broker and brokerage on the correct information to help guide both sellers and buyers on how to move forward if this settlement is approved by the Federal court. Big stuff here, so stay tuned!"Do not wait to strike till the iron is hot, but make it hot by striking."– William Butler Yeats Have a great week everyone!

The ultra-luxury home market is currently experiencing an unprecedented phenomenon that defies the norms of real estate trends. Within the past year, specifically comparing February 2023 to February 2024, there has been a remarkable surge in the average price per square foot for homes valued at $7.5 million and above. The increase exceeds 33%, a figure derived from actual selling prices rather than initial asking prices. This significant rise highlights a unique momentum in the high-end real estate sector, distinguishing it from the more conventional segments of the market.Despite the limited number of transactions in this exclusive category—with only a few homes exceeding the $7.5 million mark closing each month—the data collected over a year-long period provides compelling evidence of this upward trajectory. The consistency of this trend over twelve months offers a robust indication that the ultra-luxury home segment is not only thriving but also witnessing accelerated growth in valuation. This pattern suggests a sustained interest and willingness among buyers to invest in premium properties, even as they reach new heights in terms of cost.The reasons behind this surge in the ultra-luxury home market are complex and multifaceted. Unlike the broader real estate market, where affordability and economic factors play significant roles in determining buyer behavior, the ultra-luxury segment operates under different dynamics. Buyers within this echelon appear to be largely unaffected by the financial constraints that typically influence purchasing decisions. Their capacity to invest in high-value properties suggests a level of financial flexibility and resilience that sets them apart from the average homebuyer.This distinct behavior among ultra-luxury homebuyers underscores a deeper trend within the real estate market, where economic disparities manifest in purchasing power and investment strategies. While homes priced under $2 million do not exhibit the same level of enthusiasm, the ultra-luxury segment continues to flourish, driven by a clientele that moves beyond traditional market limitations. This divergence not only highlights the unique characteristics of the ultra-luxury market but also raises questions about the broader implications of such disparities within the real estate industry as a whole."Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful."- Albert Schweitzer Have a great week everyone!

The dynamics of the housing market in Maricopa and Pinal Counties exhibit a clear trend favoring new home sales over re-sales. In January, the number of new homes sold across these regions underscored the robustness of the new home market. A total of 1,507 new homes were closed, marking a significant increase of almost 14% from the 1,324 transactions recorded in January of the previous year. This uptick in new home sales contrasts sharply with the performance of the resale market, which has seen a decline. The re-sale market, encompassing single-family homes, townhouses, and condos, has not fared as well. In January, the Multiple Listing Service (MLS) re-sales in Maricopa and Pinal Counties totaled 2,950, a decrease of 5% from the figures in January 2023. This downturn is notable as it represents the lowest monthly total in over a decade. Such statistics highlight a shift in buyer preference, possibly due to factors such as the appeal of modern amenities, customizable options in new homes, or the overall perception of value in newly constructed properties. The disparity between new home sales and re-sales becomes even more pronounced when examining the data from Pinal County alone. The MLS re-sales in this region experienced a significant decline of over 19%, dropping from 299 in January 2023 to just 241 in January 2024. This decrease in re-sales starkly contrasts with the flourishing new home market within the same county. New home sales surged from 341 in January of the previous year to 413 in January 2024, reflecting a robust growth of 21%. These contrasting trends between new home sales and re-sales in Maricopa and Pinal Counties underscore a changing landscape in the real estate market. The buoyancy of the new home market, evidenced by its consistent growth and the declining interest in re-sales, suggests a shift in consumer preferences and market dynamics. Buyers seem increasingly inclined towards new constructions, possibly driven by the lure of modern features, the prospect of lower maintenance costs, or the desire for homes that meet contemporary lifestyle demands. This shift has significant implications for developers, realtors, and prospective homeowners, highlighting the need for a strategic approach to navigating the evolving real estate environment.Central Phoenix and many other sub-markets are victims of the new builds as there are many homes built around the 1950s period that just can't handle today's modern wants from buyers. A lot of 3 bed 1 bath floorplans just won't cut it. Hard spot for flippers as well as they know much of existing inventory can't just be flipped, needs to be completely torn down and built new. Lots of developers shying away right now from that while this housing market sits in limbo."In the middle of every difficulty lies opportunity."– Albert Einstein Have a great week everyone!

As we embarked on the new year, there was a prevailing optimism that sales volumes would experience a turnaround and start an upward trajectory, particularly with the advent of the Spring season, traditionally a robust period for sales. However, this anticipated rebound has not materialized as hoped. The latest data reveals a concerning trend, with the annual closing rate now standing at 72,223 across various areas and types, a slight but continuous decline from the previous weeks' figures of 72,359 and 72,448, respectively. This pattern is disheartening and suggests that the market is not recovering as expected. While certain market segments are witnessing modest growth, the broader picture remains challenging, particularly in significant areas such as the City of Phoenix. Here, the number of single-family home closings has dipped below 10,000 annually for the first time since 2008, a stark indicator of the current market conditions. An analysis of the Cromford® Market Index over the past month shows mixed results, with 11 cities experiencing an uptick, while 6 have seen a decline. Notably, cities like Scottsdale, Paradise Valley, Fountain Hills, Surprise, Buckeye, and Goodyear are trending towards a buyer's market, a shift that could have varied implications for different stakeholders in the real estate sector. The Cromford® Market Index, a critical gauge of market dynamics, has seen an average monthly increase of 3.1% across 17 cities, a decrease from the 5.3% recorded last week. This deceleration is tempered by the strong performances of Chandler, Mesa, Gilbert, Tempe, and Phoenix, which have contributed to an overall positive change over the month. However, the weakening trend is a cause for concern, signaling that the positive momentum might be short-lived if current conditions persist. The market's composition reveals a nuanced landscape, with 10 out of 17 cities classified as seller's markets, indicating a competitive environment for buyers. Conversely, 3 cities are balanced, and 4 are tilted towards buyer's markets, suggesting variability in market conditions across different locales. The Cromford® Market Index currently hovers around 117, a slight decrease over the past week, reflecting a market in flux. While demand continues to rise, albeit slowly, so does supply, with both metrics inching towards a 'normal' level, represented by an index reading of 100. The journey towards equilibrium is ongoing, with the Cromford® Supply Index at 66.6 still trailing behind the Demand Index at 78.1 but increasing at a marginally faster rate, hinting at a gradual but uncertain path to market stabilization.This furthers my talking point in my YouTube video below that we have seen a crash happen, not in pricing unfortunately but in TRANSACTIONS. And with the current economic storm, we are dealing with, high rates, job layoffs, and high housing pricing. The current ratio of limited supply and demand could possibly keep this market in limbo for a while, a lot of flatness."Success is not final, failure is not fatal: It is the courage to continue that counts."-Winston Churchill Have a great week everyone!

In the current real estate landscape, the number of listings under contract presents a somewhat discouraging picture, with only 8,182 listings reaching this stage after the first seven weeks of the year. This figure falls short when compared to the same timeframe in previous years, with 8,877 listings under contract last year and a significantly higher count of 12,131 two years ago. This trend indicates a sluggish start to the year, raising concerns about the vitality of the real estate market and its ability to rebound or at least match the activity levels of previous years. Despite a slight improvement in demand since the latter part of 2023, the overall market enthusiasm remains notably muted. The challenges in surpassing or even equalling last year's performance, which itself was not particularly strong, are apparent. The lukewarm demand can be attributed in part to the financial climate, particularly the mortgage rates. With the rates for typical 30-year fixed mortgages climbing above 7%, the anticipation among potential buyers for a decrease to below 6.5% has been met with disappointment. This has understandably dampened the eagerness among prospective homebuyers, making them hesitant to commit to purchases under the prevailing conditions. Reflecting on the previous year, the market did experience a brief resurgence in April, gaining a momentary momentum that unfortunately dissipated after just two months. This fleeting period of activity provided a glimmer of hope but ultimately failed to sustain a robust market recovery. The transient nature of this recovery highlights the market's volatility and the difficulty in predicting its trajectory based on past patterns alone. Looking forward to the remainder of 2024, the real estate market's direction remains uncertain. The initial weeks have shown a market that is merely functioning without any significant momentum or noteworthy developments to invigorate market participants. This stagnation leaves industry watchers, investors, and potential buyers in a state of watchful waiting, hoping for a turn of events that could inject some vitality into the market. However, without a clear catalyst on the horizon, the outlook remains cautiously pessimistic, with stakeholders looking for signs of change that could herald a more active and vibrant market.Keep an eye on other economic drivers since right now housing is in limbo. Looks like unemployment ticking up slightly, inflation with slightly rising, and other countries reporting now they are in recession territory. None of these are guarantees that we will get hit hard, but also do not help the argument that this party can keep going with no consequences. Do your due diligence folks!  "If my mind can conceive it, if my heart can believe it, then I can achieve it."— Muhammad Ali Have a great week everyone!

Reflecting on the latest trends in the real estate market, it's interesting to see a slight increase in the percentage of the list price that sellers are achieving with the contract price, which has risen from 96.61% to 97.58% since last year. This uptick, albeit modest, signals a shift towards a somewhat more optimistic market sentiment compared to the previous year. However, when I delve deeper into the numbers, the Cromford® Market Index, which I rely on to gauge market dynamics, tells a more nuanced story. Currently, the index sits at 117.5, just shy of last year's 120.8, and it seems to be hovering without clear direction, unlike last year when it was on a steady ascent.The data currently paints a complex picture of the market, with both demand and supply on the rise. Ordinarily, this balance would suggest an increase in market activity. Yet, any growth in sales is so minimal that it's barely noticeable, especially when considering the seasonal adjustments that are part and parcel of our industry. This subtlety in market movement becomes even more evident when I look at the year-on-year growth in listings under contract. This year, there's been a 59.9% increase since the beginning of the year, just a tad lower than last year's 60.6%, and it started from a lower base point, which adds another layer of complexity to the analysis.From a personal standpoint, the current market scenario doesn't provide much to get excited about for those of us eager for clear signs of positive momentum. Conversely, for those bracing for a market downturn, the situation is equally uneventful. The slight increase in listings under contract is positive, but it's not substantial enough to indicate a robust shift in market dynamics. It feels like we're in a holding pattern, waiting for a sign or a shift that could dictate our next moves in the market.Arizona's real estate market, with its notorious boom and bust cycles, seems to be taking a breather for now, firmly positioned in neutral gear. This period of equilibrium, devoid of significant ups and downs, might not satisfy those of us looking for decisive market trends. Yet, it offers a moment of reflection, a pause to assess and strategize for when the market decides its next course, which is an integral part of navigating the ever-changing landscape of real estate.Rates slowly went up last couple of weeks so slowing the demand momentum we have seen since start of the year. "It is during our darkest moments that we must focus to see the light."- Aristotle Have a great week everyone!

The recent ascent of 30-year fixed mortgage rates above 7% highlights the ongoing volatility in the housing market, spurred by unexpected strength in economic reports. This trend, featuring a momentary spike to 8%, underscores the intricate relationship between Federal Reserve actions, the 10-year Treasury yield, and broader economic conditions.The rapid rate hikes reflect the market's earlier overestimation of potential Federal Reserve rate reductions, with economic data now playing a pivotal role in shaping future rate movements. Despite this uptrend, there's a noticeable revival in buyer interest, tempered by persistently low housing inventory and elevated prices, which have made 2023 a particularly tough year for home sales.The robust job market delivers a dual impact on the housing sector, potentially boosting buyer incomes but also indicating that significant mortgage rate declines may be unlikely in the near term. This scenario, especially against the backdrop of rising home prices, underscores the critical role of mortgage rates in determining housing affordability.With the spring housing market on the horizon, the trajectory of mortgage rates will depend on various economic indicators, including inflation and job market conditions. Given the record-high home prices, even small shifts in rates can significantly influence affordability, making the economic outlook essential for prospective buyers in the 2024 housing market.We will have to wait and see if the demand surge we got from the beginning of this year was legit or caused by the sudden drop in mortgage rates in late December. Inventory still has not seen any spikes in housing and nothing forecasting that it will anytime soon.“Keep your face always toward the sunshine, and shadows will fall behind you.”– Walt Whitman Have a great week everyone!

  Senator Elizabeth Warren, together with three colleagues, has reached out to Federal Reserve Chairman Jerome Powell with a request to consider lowering interest rates at the next Fed meeting to make housing more accessible and affordable. Their letter underscores the critical impact of the Fed's interest rate decisions on the housing market, pointing out the burden that high rates place on prospective homebuyers. This move by the senators aims to influence monetary policy to ease the financial strain on individuals looking to purchase homes, highlighting the significant role of housing affordability in the broader economic landscape.The Federal Reserve acknowledged receiving the letter from the senators and expressed its intention to respond, indicating an open dialogue between policymakers and the central banking system. This interaction is set against a backdrop of growing concerns over high housing costs, which have become a pivotal issue affecting the economic sentiment among the public. The correspondence between the lawmakers and the Fed reflects an urgent call to address the challenges facing the housing market, emphasizing the need for responsive and adaptive monetary policies.Encouraging signs have emerged from the Fed, with indications of possible rate cuts in 2024 as inflation shows signs of easing. This prospect has injected a dose of optimism into the housing market, with the December forecast of potential rate reductions being seen as a positive development amidst a period of high-interest rates and a shortage of housing supply. The increase in mortgage demand observed in January suggests a renewed interest from buyers, who had been cautious due to the inflated market conditions brought on by various economic factors.The housing market's recent history has been tumultuous, with initial rate reductions by the Fed at the onset of the pandemic leading to a spike in demand and a subsequent rise in prices. However, as inflation began to rise, the central bank responded with significant rate hikes, further driving up the cost of housing and dampening buyer enthusiasm. This stalemate between potential buyers and sellers, each waiting for more favorable conditions, might see a breakthrough if the Fed proceeds with its anticipated rate cuts in 2024. Such a policy adjustment could revitalize the market, offering relief and renewed opportunities for buyers and sellers alike in a sector that is crucial to the economic health of the nation.Let me be clear, the Federal Reserve cutting rates WILL stimulate housing activity, but it will NOT help housing affordability. Cutting rates will only drive up pricing which would then decrease the value your dollar would be able to get you. Basically like putting a bandaid over a bullet wound. We need more SUPPLY to help with affordability or in the worst-case scenario, the economy needs to hit a recession to force supply onto the market!"No matter what people tell you, words and ideas can change the world."-Robin Williams   Have a great week everyone!

In recent weeks, several cities have witnessed a significant increase in their contract ratios for single-family detached homes. This ratio is a key indicator of market demand versus supply, and a rise suggests an uptick in demand. The cities of Apache Junction, Anthem, Arizona City, Gilbert, Sun Lakes, Chandler, Tempe, Peoria, and Gold Canyon have shown remarkable increases. Apache Junction leads with a 64% increase, reaching a contract ratio of 94, while Gold Canyon has the lowest increase of 30%, achieving a ratio of 32. These figures highlight areas where the real estate market is rapidly heating up.However, not all cities have experienced positive trends. Fountain Hills, Laveen, Goodyear, and Sun City West have seen declines in their contract ratios. Fountain Hills recorded an 11% decrease, falling to a ratio of 36, whereas Laveen experienced a 15% drop yet maintained a higher ratio of 67. These contrasting trends indicate that while some areas are becoming more desirable, others are witnessing a reduced demand in the housing market.In the broader context of the regional market, Phoenix has seen an 18% increase in its contract ratio, now standing at 48. This indicates a moderate improvement in demand for homes in Phoenix. Generally, a contract ratio above 40 is associated with a seller's market, implying that sellers have an advantage due to higher demand. However, this varies with location and property value. For instance, more affluent areas like Paradise Valley and Scottsdale have lower contract ratios of 21 (up 20%) and 30 (up 15%) respectively, reflecting the different dynamics in high-end real estate markets.The contract ratio serves as a crucial leading indicator of market changes, particularly in the real estate sector. The recent trends observed in these cities provide valuable insights for potential buyers and sellers. While most areas are showing a seller's market with high contract ratios, the variation across different locations underscores the importance of understanding local market conditions.2024 is starting off with some buyer activity, and supply not increasing at the same pace so expect in some areas to go close to, if not at the list price if priced correctly. Some buyers who have been sidelined are now accepting a 6-7% rate as the norm for a little bit and diving back into the market."There is nothing impossible to they who will try."- Alexander the Great Have a great week everyone!

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!

The notable downward revisions in job data for October and November, which collectively reduced reported payroll figures by 71,000, have broader implications for the economy, particularly in the real estate sector. With 10 of the past 11 months showing a cumulative downward revision of 427,000 jobs, this trend of diminishing job growth potentially impacts the real estate market in a significant way. One of the key effects could be an increase in the number of distressed sellers in the housing market.The loss of jobs or the uncertainty surrounding employment can lead to an increase in distressed sellers - homeowners who are compelled to sell their properties due to financial constraints. As more individuals face job instability or unemployment, the need to liquidate assets for financial security becomes more pressing. This situation often leads homeowners to sell their properties to capture the equity they have built up. Such a scenario tends to increase the supply of homes on the market, as more sellers are motivated by urgent financial needs rather than market conditions or personal preferences.This influx of supply can have various effects on the real estate market. In areas with high demand, the increased supply might be absorbed quickly, possibly without much impact on property values. However, in markets with lower demand or higher inventory levels, the additional supply from distressed sellers could lead to a decrease in home prices. This could create opportunities for buyers but might also result in a softer market overall, potentially affecting property values negatively.Furthermore, the trend of job revisions and its impact on the real estate market underscores the interconnectedness of the employment and housing sectors. It highlights the importance of accurate and reliable economic reporting by institutions like the Bureau of Labor Statistics. Whether the cause of these revisions is due to errors in data collection or intentional misreporting, the repercussions are felt beyond the employment sector, influencing key areas such as real estate. This situation calls for a more cautious and informed approach to both understanding economic trends and making real estate decisions.All of this, with the combination of dropping mortgage rates, could impact the housing market for this New Year of 2024. The question just lies now, will this change be a good one or a bad one?“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”– Warren Buffett Have a great week everyone!

In a report released on December 28th, the National Association of Realtors (NAR) revealed that pending home sales in November remained unchanged from October, marking stability in the market. However, these figures also indicated a 5.2% decline from November of the previous year. This data, crucial for understanding the real estate trends, is based on the contracts signed during November and is a key indicator of future closed sales. It also provides a current glimpse into the attitudes and decisions of potential homebuyers. Despite the stable number of pending sales, the overarching market conditions, particularly fluctuating mortgage rates, significantly influence buyer behavior.The mortgage rates, a crucial factor in the real estate market, experienced notable fluctuations during this period. After a brief spike, they decreased, affecting the dynamics of buyer interest and activity. Although analysts expected this decline in mortgage rates to result in a slight increase in pending home sales, the actual impact was limited. This was likely due to the combined effect of high home prices and a tight supply, which continued to challenge potential buyers.Regionally, the trends in pending home sales in November showed varied patterns. While the Northeast and Midwest experienced modest increases, the West saw a more significant rise in pending sales, indicating a stronger response to the fluctuating mortgage rates in areas with higher housing prices. Conversely, the South experienced a decrease in pending sales. According to NAR's chief economist, the decrease in mortgage rates in November led to increased interest among buyers, as evidenced by more frequent lockbox openings, but this did not translate into a significant rise in formal contract submissions.As the real estate market moves forward, several factors continue to shape its trajectory. The stabilization of mortgage rates in the mid-6% range and the persistently low supply of available homes present ongoing challenges. While new home construction is increasing, these homes often come at a premium price, and the cost of existing homes continues to rise. Despite these hurdles, the real estate market is expected to see improvements in the future. The anticipated further reductions in mortgage rates could lead to considerable monthly savings for homeowners, potentially boosting home sales in the upcoming year. This outlook, based on the latest data and trends, suggests a cautiously optimistic future for the real estate market.It is a wait-and-see game for the market, if rates continue to drop or stabilize and this remains the new norm like most of 2023."Don’t count the days, make the days count."— Muhammad Ali Have a great week everyone!

The real estate market, as reflected in the Cromford® Market Index (CMI), presents a dynamic landscape across various cities. Over the last month, an average decline of 3.0% in the CMI for 17 major cities has been observed, marking a significant shift from the steeper 6.7% decline witnessed just a week prior. While this indicates a notable improvement, it's important to acknowledge that the average CMI remains slightly lower than it was a month ago. However, in a promising turn of events, the average CMI has not only ceased its downward trajectory in the past week but has also exhibited a 1% rise. This development suggests that the market is now entering a recovery trend, a positive sign for stakeholders.Examining the performance of individual cities reveals varied trends within this broader recovery. Notably, Scottsdale, Goodyear, and Chandler have shown positive movements over the past month. They have now been joined by Fountain Hills, Surprise, Queen Creek, and Buckeye, all moving upwards on the index. This upward movement in these cities is a hopeful indication of market stabilization and growth. In contrast, Paradise Valley, Cave Creek, and Maricopa are still grappling with double-digit percentage declines over the last month. This disparity highlights the uneven nature of the real estate recovery across different locales.The current state of the market can be categorized by the type of market prevailing in these cities. Out of the 17 cities analyzed, 8 are still classified as seller's markets, indicative of a scenario where demand outstrips supply, giving sellers an advantage in pricing and negotiations. On the other hand, there are 4 cities where the market conditions are balanced, suggesting a more equitable environment for both buyers and sellers. Meanwhile, 5 cities are categorized as buyer's markets, where buyers have the upper hand due to a surplus of available properties. This distribution underscores the diverse market conditions prevailing across different cities.One city, in particular, stands out for its ongoing struggles: Maricopa. It is identified as the weakest market among the 17 cities under consideration. Maricopa's market has been notably slow in showing signs of recovery or stabilization, lagging behind its counterparts. This continued downturn in Maricopa serves as a reminder of the challenges still facing certain areas, even as other parts of the region begin to experience recovery. The varied pace and nature of recovery across these cities highlight the complexity of the real estate market and the need for nuanced, location-specific strategies to navigate it effectively.We will still need to monitor rates, if they continue to drop will only further this trend in buying demand. As buyers slowly start entering back into the market seeing that supply is stabilizing and no signs of a crash imminent.“Christmas Day is in our grasp, as long as we have hands to clasp! Christmas Day will always be, just as long, as we have we! Welcome Christmas while we stand, heart to heart, and hand in hand!”–Dr. Seuss Have a great week everyone!

Last Thursday marked a significant point for the average top-tier 30-year fixed mortgage rate, teetering on the brink of a seven-month low. This distinction, while noteworthy, is a matter of fine detail. Since then, the rates have exhibited only a marginal increase, so slight that it's more apt to view the rates from Friday and today as a horizontal continuation of last Thursday's low.Currently, the average lender is offering a 30-year fixed rate just below 6.7%. This rate, barring the past two days, sets a record as the lowest in seven months. This stability in rates is mirrored by a lack of significant activity in the underlying bond market, with Treasury yields also showing little variation since last Thursday. Financial markets are now in a holding pattern, anticipating the next major economic data release in the first week of January. This upcoming data, primarily consisting of the jobs report and the Consumer Price Index, is considered 'top tier' in today's financial landscape.It's important to note that this doesn't imply a complete absence of volatility in mortgage rates in the interim. Unforeseen fluctuations could still occur, but it would likely require unexpected changes in the economic data to see rate movements exceeding a range of 0.15% to 0.20% in the next two weeks. The current stability, therefore, hinges on the consistency of economic indicators.In summary, mortgage rates are experiencing a period of relative calm, hovering just below the seven-month low threshold. The coming weeks, leading up to the release of key economic reports in early January, are expected to maintain this trend barring any major surprises in economic data. This period serves as a crucial observation window for both lenders and borrowers, keeping an eye on potential shifts that could influence mortgage rates.Keep eyes on rates as supply seems to be holding steady the last couple of months with a slight dip this last week. This rate of movement could cause some energy after the holiday season when everyone gets back on their normal schedules.“Inspiration does exist, but it must find you working.”—Pablo Picasso Have a great week everyone!

The real estate market has been witnessing a notable shift in the size of new single-family homes over the past several years. Data on new home sales, which pertains exclusively to single-family homes, reveals a striking trend: the average size of these new homes has been consistently decreasing. This trend marks a significant change in the housing market, especially when considering the historical peak of home sizes. As of October 2023, a clear pattern has emerged, indicating a shift in consumer preferences or market dynamics influencing the size of newly constructed single-family homes.The apex of this trend was observed in March 2015, when the average size of new homes reached its zenith. Since then, there has been a noticeable and almost continuous decline in the size of new single-family homes. As of October 2023, the annual average size of a new home has reduced to 2,216 square feet. This figure represents a substantial decrease of 367 square feet, which is approximately 14% smaller than the peak size. This shrinking size of new homes is a crucial factor that potential buyers and market analysts must consider, especially when evaluating the trends in the housing market.The changing dimensions of new homes have significant implications for the real estate market, particularly concerning the median and average prices of these properties. It's important to understand that the recent reduction in the size of new homes means that, on average, newly purchased homes are significantly smaller than those bought in previous years. This size reduction could lead to misconceptions about pricing trends if not appropriately accounted for. Therefore, when analyzing the median or average price of new homes, one must consider the decreased size of these properties as a critical factor influencing their market value.In contrast to the declining size trend observed in single-family homes, the market for new townhouses and condominiums presents a different picture. Typically averaging around 1,700 square feet, these properties have been experiencing a gentle increase in size since 2013. This contrasting trend underscores the diverse dynamics at play in different segments of the real estate market. While single-family homes are becoming smaller, townhouses and condos are gradually expanding in size, highlighting varying consumer preferences and market forces influencing these distinct housing types.Basically what this comes down to is this, the smaller the home during this time means a more affordable price a buyer is willing to pay for. Rather than pay an extra 100-150k in the purchase price for the same house just a little bigger because their mortgage would be that much cheaper. “Do what you can, with what you have, where you are.”―Theodore Roosevelt Have a great week everyone!