By Jonathan Bodeen · 21 December 2015
It’s impossible to predict Real Estate performance with 100% accuracy. Often the statisticians and the Real Estate community at large get it wrong. So whenever we try to predict values or market heat, we always try to do it with more than a few grains of salt. That being said, we believe it is important to keep a dedicated ear to the pulse of the market.
Overall 2015 was a pretty decent year for Real Estate here in the valley, especially compared with 2014, which was stagnant at best. If you have been watching the Cromford index on our blog, a fair measure of the market’s health, you saw it climb to the high 140s, and now you see it has sunk down to the low 130s. Remember that on this measuring system, 90-100 is generally what we consider a balanced market, with no notable advantage to buyer or seller. Where we have been most of the year is a seller’s market.
I can’t say for sure, but I personally have a lot of optimism for 2016, because at this time last year the Cromford index was measuring around 101, threatening to dip into a buyer’s market. While we have sunk a little bit since the late summer, we still are in a healthy seller’s market. This is especially true for the first time home buyers range, with homes from 150k to 250k.
Unfortunately, that story is not true for all of the Phoenix Metro. Certain price ranges and parts of the valley feel a lot more like a buyer’s market. The 400k plus market for example, has remained largely stagnant, and does not look much better than it did last year. We’re hoping this will turn around next year as more and more short sale casualties of the 2008 through 2011 era come out of the credit penalty box and are ready to purchase again. The upside here is that there are much less listings in this price range than there was this time last year, meaning less competition for sellers. However, we haven’t seen a real increase in buyer’s in this price range.
Remember these are generalities. What is true for a price range in Scottsdale, can be very different for the same price rang in Fountain Hills or in Cave Creek. What’s true for entry level homes in Surprise can be very different for first time homes in Buckeye. What’s true for single family homes in a zip code, can be different than condos of the same value. We are always happy to get into the nitty gritty of a client’s particular market that they are buying or selling in. Also, stay tuned, because in our Quarterly Client Newsletter, that should be coming to you early January, we will be getting more specific about the performance of certain areas.
Market data referenced in this article comes from The Cromford Report.