By Mike Bodeen · 1 February 2016
Seven Year Run of Moderation Among Nations Best
It’s sometimes hard to describe where our market is trending at, and perhaps it’s not trending anywhere. Depending on the market that we Realtors find ourselves working in however, it can seem very hot, as in working the west side under $250,000. If we’re working the luxury market over a million, it can seem like the market is moving at a snail’s pace. When we look at the overall market, however, the Cromford Market Index (CMI) shows us a market that’s strong and balanced.
In fact, according to the CMI, we’ve been in a balanced to moderate seller’s market since 2009-Almost 7 years! Viewing the chart accompanying this article you can see a straight horizontal line running across the graph. This line represents “Balance.” According to Michael Orr the inventor of these algorithms and the CMI, balance is roughly between 80 and 120 on the graph. You can also see the wild market gyrations of 2005-2008 rising to a rabid seller’s market and then bottoming out just a few years later. Nothing on the current local horizon suggests anything other than a continuation of the normalcy that we’ve experienced recently. And that’s good news.
Certainly there is much happening globally that can change things in a hurry – either way. It took a relatively short period of time for the fastest price acceleration in Arizona history to occur. The index went from 112 in January 2004 to 312 in April of 2005 (15 months). The ensuing market then collapsed from its peak to an index of just 27 in November 2007-21 months later. So really, to see an almost 7 year run of balance and Seller’s market moderation makes the Phoenix metro market one of the most stable in America.
Well, that’s one professional’s opinion anyway.
Market data referenced in this article comes from The Cromford Report.