By Mike Bodeen · 29 August 2022
Last week we reported the emergence of a balanced market in our Phoenix Metro communities. We also cautioned that it could be short lived as more communities were soon to enter the buyer’s market realm. This is happening.
According to the most current Cromford Market Index (CMI – see chart below) we now have seven cities that are in the “Buyer’s Market” category. A balanced market, per the Cromford Index, is between 90-110. Therefore, a seller’s market, which 4 of our communities are still currently in, are those above 110. These are our NE communities of Paradise Valley, Fountain Hills, Scottsdale, and Cave Creek – the most expensive of our cities. Hmm.
We also mentioned last week that there has been a slow down in the slow down. This continues to trend. The average monthly change since the end of July, per Cromford is – 20%. That’s a lot, but in the last week it was a fraction, just a minus 2.5%.
Also, demand has picked up in some areas, as seen by more listings going under contract. This is most noticeable in Chandler, Mesa, Phoenix, Tempe and Paradise Valley, which could indicate that, in our opinion, smart buyers are taking advantage of increased inventory.
Along with the increased demand, Cromford notes that new supply has weakened to below normal, while “Coming Soon” listings are declining in number. New home construction has slowed as well. Fewer single-family building permits are being issued in Maricopa and Pinal counties. Builders are currently pulling back. Obtaining 35% fewer permits than January of 2021.
“…pendulums never swing to normal and stop. They swing past. An entry to the normalcy of 2014-2020 would be awesome, but it could take a while.”
Whereas the slowdown and normalcy is much welcome, the other real estate fact of life that I’ve experienced in over 4 decades in this industry, is that pendulums never swing to normal and stop. They swing past. An entry to the normalcy of 2014-2020 would be awesome, but it could take a while.
So, for the number of agents who came into the business in the past several years, and learned:
1) You didn’t need to stick a “for sale” sign in the ground (old school)
2) You could use poor quality photos (if any at all) from your older cell phone
3) You didn’t need to promptly return client phone calls
4) Your listings garnered 10+ offers
5) Buyers were expected to pay OVER list price
6) And that cash buyers were the norm
7) You aren’t the pinnacle of God’s creation – this one’s a shock, right?
New agents will have learn to adapt to normal market conditions. As one wise ancient biblical sage put it, “There is nothing new under the sun.”
Market data referenced in this article comes from The Cromford Report.