By Mike Bodeen · 28 April 2025
Honest Reporting of Price Drops Can be Seen as Negative
Last Week’s Snapshot ended with the following two paragraphs:
“These are not the types of Market Snapshots that we get joy out of. But one thing you can know for sure. We call it like we see it – and always will. We’re not always right, but we’re always honest!”
The title of that Snapshot was “As the Market Changes.” In it we showed the numbers of how our market was changing (thanks Cromford Report), by showing that current listed prices per square foot (PSF) and PSF prices of those homes that are under contract were dropping and would inevitably result in a lower closed PSF, with the term of that unknown.
To loosely borrow from a great Tom Hanks movie of 31 years ago, Forrest Gump; “Gravity is as gravity does.”
“We want our friends and clients to make these weighty decisions of buying and selling based on facts, not on hype or spin.”
But, in the real (estate) world, continual reporting of the market in one direction or another can cast one as an “optimist” which is good, or label one as a “pessimist” which, even though it’s our honest read of the market, could be viewed as bad. After all, what seller wants to list their home with an Eeyore?
At our career core, we’re salespeople. We need to sell homes and sell people homes. Honest reporting has not always been easy, but the result is a moral delight, even though it might be pay check light, with mostly good sleep at night. We want our friends and clients to make these weighty decisions regarding buying and selling based on facts, not on hype or spin.
The Dilemma in honesty is being seen as negative. Often, our human nature is to side with the guy who will get me the best price in the shortest amount of time. Shoot, who doesn’t want that? We tend to favor the positive guy, even if their verbosity seems shady, because it’s best for our financial well-being. But the truth is always the best foundation, and most all of our clients return to us and refer us knowing that with the Bodeen Team, truth is the first thing on the menu. This too is our delight.
Having sermonized all that, our chart of the week is known as the “Cromford Market Index (CMI) As a Predictor of Future Annual Price Appreciation. As a refresher, let’s explain what the CMI is and what it’s supposed to communicate: The chart is below.
Cromford Market Index™ is a value that provides a short-term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer’s market, while values above 100 indicate a seller’s market. A value of 100 indicates a balanced market.
So, the CMI is a fascinating short term prognostication tool. You can see, for example how the CMI was dropping late 2019, early 2020 but then, the Pandemic was declared and the CMI reversed course and headed up and up where its radical seller’s market peaked in 2021 before cascading
What does it show us? It’s showing us that our market, in the short-term, will continue to trend downward with prices lowering, favoring buyers. The key word here is short term. This tool, this chart is a “short term” analysis.
As we’ve shared before, markets can change on a dime. A sharp drop in mortgage rates, for example, can quickly turn the “buyers” ship around, and if history is any reliable guide, it will.
So our non-Eeyore counsel is, “Buyers Be Ready.” Today and tomorrow are good days to buy a home!
Market data referenced in this article comes from The Cromford Report.