By Mike Bodeen · 14 April 2025
Gurus Without Clues
Greetings clients and friends. Most honest economic gurus have no clue what’s going on, let alone where the markets are going, so do yourself a favor: destress and disconnect, from your favorite real estate podcasts. And while I’m thinking about it, perhaps the same advice could be given to you regarding your stock gurus.
Last week we saw a nice reduction in mortgage rates – down to 6.6% for a 30-year fixed. Things were really looking positive for buyers. And then, voila, just like that, the bond market reversed and with it the mortgage market saw rates soaring again. I will not endeavor to explain that. Pm Friday rates had gone back up to 7.07%.
The one thing I can say about the correlation between the stock market and residential real estate, is that few folks (except perhaps the Warren Buffet types) like disruption, pandemonium, chaos and uncertainty. When the stock market is great, folks feel flush with and will buy with more confidence, including real estate. Likewise, higher mortgage rates, and/or uncertainty in the economy (possible recession) tend to slow the buying pace for buyers.
But buying and selling goes on.
“At this rate, we will add 15,000 listings by year’s end, which would total 40,000 – a 15 year high.”
April 1st 2025 will be a new baseline for everything! At this time, it may be instructive to look at the current local real estate market to see where we’re at currently compared to the baseline of January 1st 2025. (See Chart)
On January 1st 2025 we reached 20,000 listings in the Arizona Regional Multiple Listings Service (ARMLS). The last time we had that many listings was in 2017. Last year (2024) we had about 15,000 listings, so we’ve grown 5000 over the entire year to end up at the 20k level.
Thus far in 2025 (14 weeks) we’ve gained another 5000 listings. This amounts to 400 new listings per week from the beginning of the year. At this rate, we will add 15,000 listings by year’s end, which would total 40,000 – a 15 year high.
If this happens prices will descend lower. They are currently trending south now. As of a few days ago, listings under contract per square foot (PSF) have dropped about $10 from the previous month. Monthly sales PSF have also dropped.
The smartest thing to say at this point, is that there are too many variables in our local, national and global markets to say with any confidence what will happen next.
The second smartest thing to say will trump the first – buckle up!