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©2023 Cromford Associat LLC

Jun 14 - The number of listings under contract (8,238) at week 23 is the lowest we have recorded for that time of the year since 2007.

At no point so far in 2024 has the count managed to claw its way above the miserable totals for 2023.

Now 2007 was an awful year with the market stalled by the certain knowledge that house prices were about to collapse. We are not in that situation in 2024, but buyer enthusiasm for re-sale homes is still very low indeed. To put 8,238 into perspective, the total for week 23 of 2011 was well over 21,000.

If the 30-year fixed mortgage rate finally tumbles well below 7% then things are likely to improve. I recommend watching the turquoise line above to see if it can creep above the purple line over the next couple of months.

The interactive version of this chart is here.

©2023 Cromford Associat LLC

Jun 13 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The average change in CMI over the past month is -3.4%, a steeper fall than the -2.1% we saw last week . This is continuing the downward trend that started 4 weeks ago. Price reductions are again increasing in both size and frequency.

In contrast to last week, we only have 4 cities showing an increase in their Cromford® Market Index over the past month, while 13 have declined.

Cave Creek is the biggest mover in favor of sellers but it is only up 8% over last month. Glendale, Peoria, Mesa, Phoenix and Gilbert are the primary locations moving in favor of buyers, with Gilbert's market deteriorating the fastest..

Despite the continuing deterioration, 11 out of 17 cities remain seller's markets. We have 2 cities (Goodyear and Cave Creek) that are balanced, while the remaining 4 are buyer's markets.

©2023 Cromford Associat LLC

Jun 12 - The supply of homes to buy continues to rise, though the rate of increase is very modest at the moment. The supply of homes to rent is on a steeper upward trajectory. Yesterday we had 4.655 active rental listings, which is up 7% from a month ago and 20% higher than the low point reached on March 3. It is also up 14% than on June 11 last year.

We conclude that tenants have a little more negotiation power when signing leases.

It is apartments that have grown the most since last year - they are 34% more numerous among the active listings. Single-family rental units have increased much less - only 9%. Townhouses are in between with 15% more than a year ago,

©2023 Cromford Associat LLC

Jun 10 - The median sales price is very little affected by the luxury market because luxury homes sell in relatively small numbers. However, these high end properties have a significant effect of both the average sales price and the average $/SF, because some of the prices are so large they can single-handedly swing the average much higher. The median tends to ignore all of the extremes at the top and bottom. This is why it is so popular with analysts who are dealing with real estate number that tend to have questionable quality.

If we examine median sales prices for small segments of the market, then we can see that the high-end has been behaving very differently from the low and mid ranges.

To do this more accurately we really want to use all recorded transactions, not just the ones that were closed through the MLS. So we turn to the Cromford® Public chart EM11 and use the various filters to find that:

  • the overall median sales price has been in a rising trend since February 2023 but has still not overtaken the peak of $470,000 achieved in both May and June of 2022. It stood at $456,995 as of April 2024.
  • if we restrict our study to the Northeast Valley (Scottsdale, PV, Fountain Hills, Cave Creek and Carefree), then the median is strong and hit a new record high of $879,500 in April 2024. The low point was January 2023 at $730,000
  • looking at the fringes of the valley represented by Buckeye, Maricopa, and San Tan Valley, then the median sales price is only marginally higher at $410,00 from where it landed at the low point in February 2023. There is a long way to go before it eclipses the previous high of $439,450, set in May 2022.

Although it has the benefit of being complete and accurate, public record data is slower to collect and so the numbers are less timely. This is why we refer to April numbers rather than May.

The numbers above include condos and townhouses as well as single-family homes. If we look only at single-family homes, all the median prices shift higher, but the comparison remains intact.

©2023 Cromford Associat LLC

Jun 6 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The average change in CMI over the past month is -2.1%, down from -0.8% last week and continuing the downward trend that started 3 weeks ago. The market is deteriorating a little faster now for sellers. Price reductions are increasing in both size and frequency.

On a brighter note, we now have 7 cities showing an increase in their Cromford® Market Index over the past month, while 10 have declined.

Fountain Hills is easily the biggest movers in favor of sellers. Glendale and Gilbert are once again the primary locations moving in favor of buyers.

Despite the continuing deterioration, 11 out of 17 cities are still seller's markets. We have 3 cities (Goodyear, Cave Creek and Surprise) that are balanced, while the remaining 3 are buyer's markets.

Buckeye and Maricopa swapped places at the bottom of the table. Both have a large inventory a for-sale homes which gives buyers an advantage in negotiations.

©2023 Cromford Associat LLC

Jun 5 - The affidavits of value have been counted and analyzed for Maricopa County's April filings and here is what we found:

  • There were 7,858 closed transactions, down 5% from 8,255 in May 2023 but up 8% from April.
  • There were 1,572 closed new homes, down 12% from 1,788 in May 2023 but up 10% from April.
  • There were 6,286 closed re-sale transactions, down 3% from 6,467 in May 2023 but up 8% from April.
  • The overall median sales price in May was $475,000, up 2.5% from May 2023 but down 0.3% from April.
  • The re-sale median sales price was $460,000, up 2.7% from May 2023 but down 1.1% from April.
  • The new home median sales price was $520,634, up 2.7% from May 2023 and up 1.0% from April.

Closing counts look good when compared with last month, but are down compared with a year ago. New homes closings were noticeably weaker, falling 12% compared to a year ago, suggesting demand for new homes may be losing steam after a very good run..

New home market share peaked at almost 28% in December 2023 and has been falling back towards more normal levels. It stood at 20% in May.

Prices were slightly weaker in May than they had been in April, back down to the level of March. We see an annual gain in the median of around 2.5%, which is lower than the overall inflation rate.

These numbers are for single family and townhouse / condo homes.

©2023 Cromford Associat LLC

Jun 4 - As you are probably aware, using the MLS data as-is is not a good idea if you want to generate reliable statistics. A surprisingly large percentage of listings contain errors that could throw off misleading statistics if they remain uncorrected. A few examples include:

  • wrong County - most common is agents who think Maricopa City is in Maricopa County instead of Pinal. There is also confusion about the county boundary near Queen Creek and San Tan Valley.
  • typo in the price - e.g. repeated digits or omitted digits
  • bad dates - closed date may be before contract date or even the listing date. The COE may fall at a weekend, which is not something the title company will allow to happen in real life.
  • wrong ZIP code - happens much more than you might think - we use the USPS to confirm the correct ZIP code for each parcel
  • wrong dwelling type - doesn't match the actual property
  • etc. etc.

We typically spend 2 hours or so each day searching for these kinds of errors and correcting them before we use the data in our systems. Doing this yourself is not recommended, it is soul destroying work. Since we have an objective of providing the best quality statistics we can, we have to do it, and are doing it on behalf of the 40,000+ agents and others that belong to ARMLS.

Most of the error checks have been developed based on our experience over the past 18 years. Just recently we detected a small number of listings with a new kind of error that we have only just started to fix. Some agents who are listing apartments or co-operative units have been entering the sq ft of the entire apartment block or the entire co-op. This means we are calculating the price per sq. ft. with too many sq. ft. These issues are being fixed over the next few days, but it means that a few $/SF numbers and SF numbers will adjust to more accurate values over this time. It does not make a huge difference to the market as a whole, but if your small segment of the market contains a listing with this horrible SF data, then your $/SF numbers could be too low and the SF numbers too high.

©2023 Cromford Associat LLC

Jun 1 - The re-sale market is cooling as supply continues to climb while demand remains subdued. One good way to measure this is through the contract ratio, which compares the number of active listings (without a contract) to the number of listings under contract.

For all areas & types, the contract ratio has dropped 15% from 54.5 to 46.1 over the last month. This compares poorly with 77.0 on June 1 last year. The current 46.1 reading represents a balanced market with buyers finding plenty of supply to choose from and sellers experiencing more competition from each other than they have for most of the last decade. You can use the contract ratio for small segments of the market to check whether the above comments apply to the segments in which you are interested.

Pricing has been strong for the first 5 months of the year but is unlikely to stay that way as we enter the hottest part of the year. We are already seeing evidence that the average $/SF pricing is having a rest after the unexpectedly strong peak that was achieved on May 8.

©2023 Cromford Associat LLC

May 30 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The average change in CMI over the past month is -0.8%, down from +0.1% last week and continuing the downward trend that started 2 weeks ago. The market is deteriorating for sellers as supply continues to creep higher and demand remains much weaker than normal. We expect more impatient sellers to increase the size and frequency of price reductions.

We have only 5 cities showing an increase in their Cromford® Market Index over the past month, while 12 have declined. This is the same as last week.

Paradise Valley, Fountain Hills and Goodyear are by far the biggest movers in favor of sellers. Glendale and Gilbert are the primary locations moving in favor of buyers.

Fountain Hills looks determined to replace Chandler at the top of the table, though it still has some way to go.

Despite the deterioration, 11 out of 17 cities are seller's markets. We have 2 cities (Goodyear and Surprise) that are balanced, while the remaining 4 are buyer's markets.

©2023 Cromford Associat LLC

May 28 - The latest S&P / Case-Shiller® Home Price Index® numbers were published this Tuesday.

The new report covers home sales during the period January to March 2024. This means the typical home sale closed in mid February, more than 3 months ago. Please remember that Case-Shiller data is fairly old, even on the day it is released.

A big turn-around has taken place in the last 2 months. We have all 20 cities showing rising prices for last month. The Pacific coast had another remarkably strong month.

Comparing with the previous month's series we see the following changes:

  1. Seattle +2.70%
  2. San Francisco +2.59%
  3. Cleveland +2.40%
  4. San Diego +2.23%
  5. Boston +1.88%
  6. Los Angeles +1.70%
  7. Chicago +1.66%
  8. New York +1.50%
  9. Portland +1.47%
  10. Minneapolis +1.34%
  11. Denver +1.33%
  12. Washington +1.27%
  13. Dallas +1.19%
  14. Atlanta +1.15%
  15. Detroit +1.14%
  16. Miami +0.96%
  17. Charlotte +0.96%
  18. Las Vegas +0.92%
  19. Phoenix +0.53%
  20. Tampa +0.50%

Phoenix has fallen from 14th to 19th place since last month. The national average increase month to month was 1.29%, so Phoenix under-performed significantly against that benchmark.

Comparing year over year, we see the following changes:

  1. San Diego +11.1%
  2. New York +9.2%
  3. Cleveland +8.8%
  4. Los Angeles +8.8%
  5. Boston +8.7%
  6. Chicago +8.7%
  7. Miami +8.2%
  8. Seattle +7.8%
  9. Detroit +7.7%
  10. Las Vegas +7.7%
  11. Charlotte +7.5%
  12. Washington +7.0%
  13. Atlanta +6.1%
  14. Phoenix +4.9%
  15. San Francisco +4.9%
  16. Tampa +3.8%
  17. Dallas +3.6%
  18. Minneapolis +3.3%
  19. Portland +2.2%
  20. Denver +2.1%

Phoenix stayed at 14th place, and is therefore still in the bottom half on a year over year basis. All 20 of the cities are again showing positive price movement from one year ago with Denver and Portland at the bottom. Southern California and the North are in the lead.

The national average is +6.5% year over year. Phoenix is below that percentage, and in a similar situation to last month.

©2023 Cromford Associat LLC

May 27 - The typical 30-year fixed mortgage rate has been varying between 7% and 7.25% since May 6, which is better for buyers than the 7.25% to 7.5% range that we saw between April 11 and May 6.

Despite the better rates, demand has stayed weak and even weakened a little further. The number of listings under contract across all types and areas within the ARMLS database is 8,779. This is down 7% from the 9,441 we saw on April 27. It is also down almost 10% from this time last year.

As we approach the hottest months of the year, when demand tends to fall anyway, this weakness is not encouraging. Supply continues to rise, although slowly and the current trends are suggesting continued deterioration for sellers. It would not be a surprise if demand were to fall enough to match the supply of active listings over the next several weeks.

May 23 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

©2023 Cromford Associat LLC

May 23 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The average change in CMI over the past month is +0.1%, down from +0.8 last week and continuing the downward trend that started last week.

We have only 5 cities showing an increase in their Cromford® Market Index over the past month, while 12 have declined. This is also less positive than last week.

Paradise Valley, Fountain Hills and Goodyear are the biggest movers in favor of sellers. Tempe, Glendale, Gilbert and Maricopa are the primary locations moving in favor of buyers.

Now that Chandler is losing steam, Fountain Hills has a chance to replace it at the top of the table.

11 out of 17 cities are seller's markets. We have 2 cities (Goodyear and Surprise) that are balanced, while 4 are buyer's markets.

May 20 - Mike Orr is on vacation in Norway so observations are few and far between - normal service will be resumed on May 27.

©2023 Cromford Associat LLC

May 16 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The average change in CMI over the past month is +0.8%, down from +1.8 last week and reversing the trend that started six weeks ago.

We have only 6 cities showing an increase in their Cromford® Market Index over the past month, while 11 have declined. This is significantly less positive than last week.

Paradise Valley, Peoria, Fountain Hills and Goodyear are the biggest moves in favor of sellers. Tempe, Queen Creek and Maricopa are the primary locations moving in favor of buyers. Buckeye has been improving for sellers and is no longer at the bottom of the table having been replaced by Maricopa is looking very likely to take its place. Chandler is still far out in front at the top, but Fountain Hills is now the main challenger.

11 out of 17 cities are seller's markets. We have 2 cities (Goodyear and Surprise) that are balanced, while 4 are buyer's markets.

©2023 Cromford Associat LLC

May 14 - The Cromford® Market Index for all areas and types has declined a little further over the last week and dropped below the 110 mark, meaning we officially classify the market as balanced.

The decline has been very slow so there is no likelihood of anyone feeling the difference from one week to the next. However supply keeps creeping higher and demand remains very weak.

There is also a big difference between areas like Chandler and Gilbert which remain under firm control by sellers and areas like Maricopa and Buckeye where buyers have a strong advantage due to the plentiful supply, which includes a large number of newly built homes.

©2023 Cromford Associat LLC

May 9 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

Once again we are seeing small signs of improvement in the market for sellers in certain sub-markets.

The average change in CMI over the past month is +1.8%, up from +1.7 last week and continuing a mild trend that started five weeks ago.

We have 10 cities showing an increase in their Cromford® Market Index over the past month, while 7 have declined. This is less positive than last week.

Paradise Valley, Peoria, Fountain Hills and Goodyear are the biggest moves in favor of sellers, followed by Avondale. Tempe, Queen Creek, Maricopa and Cave Creek are the primary locations moving in favor of buyers. Buckeye remains at the bottom of the table but Maricopa is looking very likely to take its place. Chandler is still far out in front at the top.

11 out of 17 cities are seller's markets now that Paradise Valley has joined the group. We have 2 cities (Goodyear and Surprise) that are balanced, while 4 are buyer's markets. 

©2023 Cromford Associat LLC

May 5 - Over the last 4 days the monthly average price per square foot for closed listings for all areas and types in the ARMLS database has exceeded $308.

This means it has made a new all-time record high - $308.01.

While they continue to predict a massive imminent price drop, as they have done continuously since 2018, the usual YouTube housing pundits must be feeling less than thrilled to be proven so completely wrong year after year. However they remain undaunted. Their predictions have little to no substance behind them and I notice a lack of confidence creeping into their voices. Bad news attracts clicks is something they do understand.

Again and again, they make the mistake of thinking a weakening of demand will force prices down. The market sees low volumes when demand is weak, but to get prices to come down you need excess supply and desperate sellers.

There was a 7 month period from June to December 2022 when the iBuyers were those desperate sellers. They had spent the previous year loading up on homes at excessive prices in an apparent attempt to grab market share in a booming market. The wheels came off that particular bus when interest rates were raised sharply. Finding themselves with too much unsold inventory, they got rid of it in the second half of 2022 by pricing their homes below market.

Obviously buying above market and selling below market is not great for their profits and this was reflected in their quarterly and annual results. What the rest of us experienced was excess supply and desperate sellers, even though the number of desperate sellers was low (2). Prices did indeed come down sharply during the second half of 2022 but they stabilized in 2023 and have been trending gently higher now that the excess inventory is gone.

I expect the usual seasonal decline in average $/SF during the 3Q, but for now, the market deserves some respect for its resilience and sellers can celebrate the new all-time high.

©2023 Cromford Associat LLC

May 4 - The affidavits of value have been counted and analyzed for Maricopa County's April filings and here is what we found:

  • There were 7,248 closed transactions, up 6% from 6,840 in April 2023 and up 5% from March.
  • There were 1,430 closed new homes, up less than 1% from 1,423 in April 2023 and down 8% from March.
  • There were 5,818 closed re-sale transactions, up 7% from 5,517 in April 2023 and up 9% from March.
  • The overall median sales price in April was $476,545, up 4.7% from April 2023 and up 0.3% from March.
  • The re-sale median sales price was $465,000, up 6.9% from April 2023 and up 1.3% from March.
  • The new home median sales price was $515,279, up 0.4% from April 2023 and also up 0.4% from March.

Closing counts look quite a bit stronger in April 2024 for re-sales, but we must bear in mind that April 2024 contained 10% more working days than April 2023.

New homes did not perform quite so well in April as they have been doing over the last year, and their market share dropped to 19.7%, their lowest percentage since July 2022.

These numbers are for single family and townhouse / condo homes.

©2023 Cromford Associat LLC

May 2 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

Once again we are seeing small signs of improvement in the market for sellers in certain sub-markets.

The average change in CMI over the past month is +1.7%, up from +1.4% last week and continuing a trend that started four weeks ago.

We have 11 cities showing an increase in their Cromford® Market Index over the past month, while 6 have declined. This is also better than last week.

Paradise Valley, Peoria and Goodyear are the biggest moves in favor of sellers, followed by Avondale and Chandler. Queen Creek, Maricopa and Cave Creek are the primary locations moving in favor of buyers. Buckeye remains at the bottom of the table but Maricopa is threatening to take its place. Chandler is still far out in front at the top. Queen Creek is now well below 80 while Maricopa has joined Buckeye below the 70 level. Buyers have strong negotiating power at these three locations.

11 out of 17 cities are seller's markets now that Paradise Valley has joined the group. We have 1 city (Surprise) that is balanced, while 5 are buyer's markets, although Goodyear looks set to leave that group very shortly.

©2023 Cromford Associat LLC            

Apr 30 - The latest S&P / Case-Shiller® Home Price Index® numbers were published this Tuesday.

The new report covers home sales during the period December 2023 to February 2024. This means the typical home sale closed in mid January, more than 3 months ago. Please remember that Case-Shiller data is fairly old, even on the day it is released.

A big turn-around has taken place since last month. We have 17 of the 20 cities showing rising prices for last month, with a higher index for Phoenix for the first time in 4 months. Only 3 cities declined over the last month with former high-fliers Miami and Tampa the most affected. The Pacific coast had a remarkably strong month.

Comparing with the previous month's series we see the following changes:

  1. Seattle +2.27%
  2. San Diego +1.69%
  3. San Francisco +1.66%
  4. Portland +1.17%
  5. Washington +1.12%
  6. Los Angeles +1.06%
  7. Chicago +1.05%
  8. Boston +0.99%
  9. Denver +0.86%
  10. New York +0.76%
  11. Minneapolis +0.74%
  12. Las Vegas +0.64%
  13. Dallas +0.58%
  14. Phoenix +0.45%
  15. Detroit +0.45%
  16. Atlanta +0.43%
  17. Charlotte +0.20%
  18. Cleveland -0.01%
  19. Miami +0.09%
  20. Tampa -0.32%

Phoenix has risen from 16th to 14th place since last month. The national average increase month to month was 0.59%, so Phoenix under-performed against that benchmark.

Comparing year over year, we see the following changes:

  1. San Diego +11.4%
  2. Chicago +9.0%
  3. Detroit +8.9%
  4. Los Angeles +8.7%
  5. New York +8.7%
  6. Charlotte +8.2%
  7. Boston +8.0%
  8. Miami +8.0%
  9. Las Vegas +7.3%
  10. Washington +7.1%
  11. Seattle +7.1%
  12. Cleveland +7.0%
  13. Atlanta +6.4%
  14. San Francisco +5.2%
  15. Phoenix +4.9%
  16. Tampa +4.3%
  17. Minneapolis +3.9%
  18. Dallas +3.5%
  19. Denver +2.8%
  20. Portland +2.2%

Phoenix slipped from 14th to15th place, and is still in the bottom half on a year over year basis. All 20 of the cities are now showing positive price movement from one year ago with Portland once again at the bottom. Southern California and the North are in the lead.

The national average is +6.4% year over year. Phoenix is below that percentage, and more so than last month. 

©2023 Cromford Associat LLC

Apr 28 - We are seeing almost 9,000 price cuts over the last 4 weeks, a level we have not seen since January last year. 

Excluding the period between June and December 2022, when iBuyers were chopping prices like crazy across all their excessive inventory, we are at one of the highest levels for price cuts since 2020. Almost 56% of the active listings have seen a price reduction in the last 4 weeks.

Although their listings are far less numerous, homes over $3 million are also seeing far more price cuts than usual, as seen in the chart below: 

They tend to stay on market for a much longer time and their price reductions are usually spread out over many months.184 homes over $3 million saw a price cut over the last 4 weeks, Since there are 668 in total this is 27.5% of the high-end listings getting reduced. It seems to be most prevalent in the range $3 million to $5 million, of which 32.4% have seen a price cut in the last 4 weeks. A smaller percentage of homes over $5 million have been reduced - 22%.

©2023 Cromford Associat LLC

Apr 25 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

We are starting to see few signs of improvement in the market for sellers, at least in certain sub-markets.

The average change in CMI over the past month is +1.4%, up from +1.1% last week and continuing a trend that started three weeks ago.

We have 10 cities showing an increase in their Cromford® Market Index over the past month, while 7 have declined. This is also better than last week.

Goodyear and Paradise Valley are the biggest moves in favor of sellers, followed by Chandler. Queen Creek, Cave Creek and Maricopa are the primary locations moving in favor of buyers. Buckeye remains adrift at the bottom of the table while Chandler is still way out in front at the top. Queen Creek is now well below 80 while Maricopa has joined Buckeye below the 70 level. Buyers have strong negotiating power at these three locations.

10 out of 17 cities are seller's markets. We have 2 cities that are balanced, while 5 are buyer's markets. Paradise Valley looks set to become a seller's market by next week.

It is much easier to create new supply in the outlying areas, but as we move towards the center of the valley, supply gets tighter and market starts to increasingly favor sellers.

©2023 Cromford Associat LLC

Apr 24 - Single-family building permits are still running far ahead of last year and the total of 8,334 for the first quarter of 2024 across Maricopa and Pinal was the highest quarterly number since Q1 2022.

The top 10 locations for new permits during the first quarter of 2024 were:

  1. Phoenix (1,250)
  2. Surprise (1,005)
  3. Unincorporated Pinal County (993)
  4. Unincorporated Maricopa County (669)
  5. Buckeye (583)
  6. Peoria (572)
  7. Queen Creek (540)
  8. Goodyear (540)
  9. Maricopa (333)
  10. Mesa (291)

Peoria showed the largest growth over last year, when there were only 54.

One of the reasons Chandler scores so high in the CMI ranking table below is that there are so few new homes being created. Just 29 permits were issued during the first quarter, but at least that is up from 11 during Q1 last year. Gilbert only gave us 72, down from 123 in 2023 and Tempe saw only 25.

New supply is mainly being created outside these "older" cities on the fringes of the built-up area.

©2023 Cromford Associat LLC

Apr 21 - The average price per square foot for all areas & types has breached the $300 level again.

The record stands at $306.39, set on June 10, 2022. This was followed by a 14% correction down to a low of $263.83 on January 17, 2023, which was partly fueled by an excessive inventory sell-off from the iBuyers. Since January 2023, prices have been generally moving higher. We were at $279.86 one year ago and prices have risen 7.3% over the last 12 months.

They would only have to rise by 2% to establish a new all-time high

©2023 Cromford Associat LLC

Apr 18 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities


The average change in CMI over the past month is +1.1%, up from +0.3% last week.

We have 9 cities showing an increase in their Cromford® Market Index over the past month, while 8 have declined. This is worse than last week. Mixed signals again.

Tempe, Goodyear and Paradise Valley are the biggest moves in favor of sellers, followed by Scottsdale. Fountain Hills, Queen Creek, Cave Creek are the primary locations moving in favor of buyers. Buckeye remains adrift at the bottom of the table while Chandler is still way out in front at the top. Gilbert is attempting to challenge Chandler while Queen Creek has joined Maricopa below the 80 level.

10 out of 17 cities are seller's markets. We have 2 cities that are balanced, while 5 are buyer's markets. This mix is weaker than last week thanks to Cave Creek moving from balanced to a buyer's market.

©2023 Cromford Associat LLC

Apr 17 - This observation is from Callum Williams at the Economist. In many ways Generation Z - people born between 1997 and 2012 - have had a tough time. The covid-19 pandemic disrupted their schooling and stopped them from seeing friends. The past couple of years have been marked by geopolitical ructions, from war in Ukraine to the Israel-Hamas conflict. And some researchers believe that smart-phones are damaging their mental wellbeing.

So far, so bad. But as we report this week, there is another side to the story. Gen Z is rich. Millennials - those born between 1980 and 1996 - had to deal with sky-high rates of youth unemployment during the early 2010s. Gen Z-ers, by contrast, look for work during a global labor shortage. Youth unemployment is at its lowest in decades. Gen-Z job-hunters are able to demand much higher wages.

Evidence from America finds that in 2022 Gen Z-ers’ pay packets were rising at an astonishing rate of 13% year on year. This is unprecedented, both in absolute terms and relative to the pay rises of people of other ages. Robust evidence finds that Gen Z-ers are far better off than Millennials were at the same age. We find similar evidence elsewhere in the rich world.

The obvious counterargument relates to housing and education. Aren’t these pricier than ever? On education, possibly not. Housing is expensive, but Gen Z-ers’ pay packets are unusually large, meaning they can cope with the additional costs. Our analysis for America finds that under-25s are spending slightly less on education and housing, as a share of their income, than the long-run average. Although housing has become less affordable since the 1980s, home-ownership rates for Gen Z are higher than for previous generations at the same age.

Gen Z-ers’ economic advantages may not last for ever. If a recession hits while the generation is still young, they will be the first to suffer. Artificial intelligence is potentially a big threat to livelihoods. But for now, things are looking good.

I find the Economist a good source for fresh ideas and this particular piece suggests demand for housing from Gen-Z may be stronger than we expect over the next several years. We should not assume their tastes to be the same as previous generations. My son Luke has recently joined the Cromford® team full-time and is from Gen-Z, having been born in California in 2001 and raised in Arizona from 2002 to 2017. He has dual citizenship (USA and UK).

©2023 Cromford Associat LLC

Apr 14 - I have not had a question or comment about the iBuyers in over a year now, but they have not gone away. Well Zillow has (as an iBuyer), but that is old news and they were only around for a very brief time.

Opendoor has been selling about 40 homes a month in Greater Phoenix. We saw a consistent volume at this level over the 5 months from September to January. But in February that popped up to 63. However this is a seasonal effect and still far below what they used to achieve, with sales over 100 a month for most of 2017. Their current monthly volume is 90% below than their peak sales in March 2022.

So Opendoor is still around but operating at a tiny fraction of its volumes between 2016 and 2022. With a 0.9% market share after 10 years of operation, I would anticipate that they see this as a huge disappointment relative to their original strategic objectives.

What of OfferPad?

Their monthly sales volume is hovering around 15 sales per month. This is less than half their 2017 volume and also more than 90% down from their peak in March 2022. They have been up and running in Phoenix since 2015 so after 9 years they have achieved a market penetration of 0.2%. Barely more than a rounding error, to be honest. You can investigate these monthly volumes in the Cromford® Public section of this site.

In their heyday of Q1 2022, when they were both buying homes for more than they were worth, the iBuyer market share reached as high as 5.7%. So their present 1.1% combined market share represents a crash back to earth for their transaction volumes as well as their stock prices.

In contrast, money invested in any of the public homebuilders, such as D R Horton, Pulte, Lennar, Meritage, MDC, Toll Brothers, etc. has performed extremely well, despite their more traditional business model. The model might be old, but it has the great but unfashionable feature of generating healthy profits, even after interest, tax, depreciation and amortization. You may call me old fashioned, but I still like that feature.

©2023 Cromford Associat LLC

Apr 12 - We don't go in for advertising at the Cromford Report, relying instead on word of mouth among agents and investors. This keeps out prices down because our marketing budget is zero.

There has been a lot of chit-chat about artificial intelligence over the past year, to put it mildly. So I asked ChatGPT to write a review about the Cromford Report. Here is what it said:

The Cromford Report is an invaluable tool for anyone involved or interested in the real estate market, particularly in the Arizona area. As a comprehensive analysis of the local housing market, it offers insights and data that are essential for making informed decisions, whether you're a buyer, seller, investor, or industry professional.

One of the standout features of the Cromford Report is its depth of analysis. It doesn't just provide surface-level information; instead, it delves into the nuances of the market, examining trends, patterns, and factors influencing supply, demand, and pricing. This level of detail allows users to gain a thorough understanding of what's driving the market at any given time.

Furthermore, the Cromford Report's commitment to accuracy and reliability is commendable. Its data is meticulously gathered and analyzed, ensuring that users can trust the information they're receiving. This reliability is crucial in an industry where even small fluctuations can have significant implications.

Another strength of the Cromford Report is its accessibility. While the real estate market can be complex and intimidating for those without specialized knowledge, the report presents information in a clear and understandable manner. Whether you're a seasoned real estate professional or a newcomer to the industry, you'll find the Cromford Report to be user-friendly and informative.

Overall, the Cromford Report is an indispensable resource for anyone with an interest in the Arizona real estate market. Its thorough analysis, commitment to accuracy, and accessibility make it a valuable tool for making informed decisions in a dynamic and ever-changing industry.

Thanks ChatGPT. You made me blush.

©2023 Cromford Associat LLC

Apr 11 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The average change in CMI over the past month is +0.3%, up from zero last week. The picture is remarkably mixed with some locations improving sharply for sellers over the last months and other deteriorating badly,

We have 10 cities showing an increase in their Cromford® Market Index over the past month, while 7 have declined. This is the same as last week.

Tempe, Goodyear and Paradise Valley are the biggest moves in favor of sellers, followed by Avondale and Scottsdale. Fountain Hills, Queen Creek, Cave Creek and Buckeye are the primary locations moving in favor of buyers, with Peoria just behind. Buckeye remains adrift at the bottom of the table while Chandler is way out in front at the top.

10 out of 17 cities are seller's markets. We have 3 cities that are balanced, while 4 are buyer's markets. This mix is unchanged from last week.

©2023 Cromford Associat LLC

Apr 10 - From the Cromford® Public section we extracted this list of the top cities by Dollar Volume over the 12 month period March 2023 - Feb 2024.

It is noticeable how strong Scottsdale and Paradise Valley were over this period. Scottsdale produced almost as much home sales revenue as Phoenix, while Paradise Valley comfortably exceeded Queen Creek and is catching up on Glendale. The unit volumes are substantially lower, of course, in Scottsdale and PV, with the difference being the much higher pricing.

However the really interesting contrast is with 12 months earlier:

During March 2022 - Feb 2023, Scottsdale was substantially behind Phoenix and Paradise Valley ranked lower than Queen Creek and far behind Glendale.

Dollar volume in Scottsdale declined between the two periods, but only by less than 3%. Dollar volume in Phoenix declined by a massive 20%, and other cities saw similar drops.

Despite the overall market declining, dollar volume in Paradise Valley increased by 18%. Not only did the super-luxury market remain very active in 2023, pricing increased dramatically, far more than in the rest of the market.

©2023 Cromford Associat LLC

Apr 8 - Fifteen years ago, 90% of the housing market talk was about foreclosures. These days, we go from one month to the next without thinking about foreclosures at all. How times have changed!

There are always foreclosures going on and for the homeowner and borrower involved it can be a desperate and difficult situation. It is not too great for the lender either.

But the number of foreclosures taking place this year is so low compared with 15 years ago that foreclosure have almost no impact on the general housing market. It does not look like they will do in the medium term either.

Looking at the foreclosure pending chart you can see that we currently have slightly under 1,000 in process across the whole of Maricopa County. This is 17% below last year at the same time and 98% below the count 15 years ago.

These days foreclosure notices usually result in the homeowner selling privately well before the trustee sale takes place. We currently have about 20 homes auction by the trustee per month - about one per day. Back in 2009 it was not unusual to see 250 homes auctioned in a single day.

Over the past 5 years there have been several times when self-appointed "pundits" popped up and predicted massive rises in foreclosures. All these "pundits" have been proven completely wrong.

©2023 Cromford Associat LLC

Apr 6 - The affidavits of value have been counted and analyzed for Maricopa County's March filings and here is what we found:

  • There were 6,891 closed transactions, down 13% from 7,880 in March 2023 and but up 16% from February.
  • There were 1,559 closed new homes, down 8% from 1,699 in March 2023 but up 16% from February.
  • There were 5,332 closed re-sale transactions, down 14% from 6,181 in March 2023 but up 16% from February.
  • The overall median sales price in March was $475,000, up 6.3% from March 2023 and up 1.7% from February.
  • The re-sale median sales price was $459,000, up 7.0% from March 2023 and up 2.0% from February.
  • The new home median sales price was $513,285, up 1.1% from March 2023 but down 0.6% from February.

Closing counts were very weak in March for re-sales, and not impressive for new homes. Pricing continued to advanced for re-sales but weakened a little for new homes, up only 1.1% from a year ago.

New homes took 22.6% market share. Three years ago new homes were less than 15% of the total units sold.

These numbers are for single family and townhouse / condo homes.

©2023 Cromford Associat LLC

Apr4 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The average change in CMI over the past month is zero, down from +0.4% last week.

We have 10 cities showing an increase in their Cromford® Market Index over the past month, while 7 have declined. This is an improvement over last week. an improvement for sellers instead of a deterioration.

Tempe and Avondale are the primary moves in favor of sellers, aided by Maricopa and Scottsdale. Peoria, Queen Creek, Cave Creek and Buckeye are moving in favor of buyers, with Fountain Hills just behind. Buckeye remains by far the weakest of the large cities with an excess of available inventory. Chandler is way out in front at the top of the table with a shortage of available inventory. Paradise Valley managed a slight rise from last month.

10 out of 17 cities are still seller's markets, though this will shortly drop to 9 as Peoria declines. We have 3 cities that are balanced and 4 are buyer's markets.

©2023 Cromford Associat LLC

Apr 1 - Transaction volumes have been low for many months in the re-sale segment of the housing market. However the same cannot be said of the new home segment.

During the first 2 months of 2024, new home builders closed on a total of 3,351 homes across Maricopa and Pinal counties.

This is the highest total since 2006 and is up almost 16% from last year. New homes are taking a lot of the demand away from re-sales. This is particularly true of Pinal County, where closings were up almost 32% from last year.

New home closings are up just over 10% in Maricopa County. Re-sale closings are down 0.4% compared to the first 2 months of 2023.

New homes are very competitive on price. It might surprise you to learn that the average price per square foot for new homes across Maricopa and Pinal counties was $269.75 in February 2024, which is far below the resale average of $298.55. New homes are normally more expensive than re-sales, but this is only true if you are looking at homes in the same location. In Greater Phoenix, new homes tend to be located further away from the center of the valley in areas that are cheaper per sq. ft. because the land is cheaper out there.

As with most things in real estate the answer is location, location, location. The is the one thing you cannot change about real property. With working from home become more common, you can save yourself a lot of dollars if you are willing to live further out.

All these numbers come from the Cromford® Public section of the site, an optional subscription upgrade which relies on public records instead of ARMLS data. As such, Cromford® Public has the disadvantage of being a lot less timely, but it benefits from being far more complete and usually a little more accurate. After all, completing an Affidavit of Value is subject to the laws of perjury, whereas the content of MLS listings is patrolled by the Data Integrity team within the MLS. We have to make dozens of error corrections each day to MLS data before using it in our charts and tables.

The majority of new home sales do not touch the MLS, so we have to rely on public record data when analyzing the new home market.

©2023 Cromford Associat LLC

Mar 28 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The average change in CMI over the past month is +0.4%, up from +0.1% last week.

We have 8 cities showing an increase in their Cromford® Market Index over the past month, while 9 have declined. This is also slight improvement over last week. The change is minimal but it is the first time since January 18 that we have seen an improvement for sellers instead of a deterioration.

Tempe and Avondale are primarily responsible for the positive average, aided by Maricopa. Scottsdale is starting to show a little momentum at +4%. Peoria and Buckeye are leading the downward movement, with Cave Creek also weakening. Buckeye remains by far the weakest market now that Maricopa is improving. Chandler is so far ahead at the top of the table that it has no serious rival at the moment, with the next 3 cities all in decline.

10 out of 17 cities are still seller's markets. We have 3 cities that are balanced and 4 are buyer's markets.

©2023 Cromford Associat LLC

Mar 26 - The latest S&P / Case-Shiller® Home Price Index® numbers were published this Tuesday.

The new report covers home sales during the period November 2023 to January 2024. This means the typical home sale closed in mid December, more than 3 months ago. Please remember that Case-Shiller data is fairly old, even on the day it is released.

We have 3 of the 20 cities showing rising prices for last month, with a lower index for Phoenix for the third time in 10 months. 17 cities declined over the last month with Cleveland the most affected. San Diego stands out with a significant rise unlike all other US cities studied by Case-Shiller.

Comparing with the previous month's series we see the following changes:

  1. San Diego +1.8%
  2. Washington +0.5%
  3. Los Angeles +0.1%
  4. Dallas -0.0%
  5. Miami -0.1%
  6. Atlanta -0.1%
  7. San Francisco -0.1%
  8. Charlotte -0.1%
  9. Las Vegas -0.1%
  10. Tampa -0.2%
  11. Portland -0.2%
  12. Dallas -0.2%
  13. New York -0.3%
  14. Denver -0.5%
  15. Chicago -0.5%
  16. Phoenix -0.5%
  17. Boston -0.5%
  18. Minneapolis -0.6%
  19. Detroit -0.7%
  20. Cleveland -0.9%

Phoenix has dropped from 12th to 16th place since last month. The national average increase month to month was -0.1%, so Phoenix fell well below that standard.

Comparing year over year, we see the following changes:

  1. San Diego +11.2%
  2. Los Angeles +8.6%
  3. Detroit +8.2%
  4. Charlotte +8.1%
  5. Chicago +8.0%
  6. New York +7.6%
  7. Miami +7.5%
  8. Boston +7.0%
  9. Cleveland +5.9%
  10. Atlanta +6.4%
  11. Washington +6.3%
  12. Las Vegas +5.6%
  13. Tampa +4.6%
  14. Phoenix +4.6%
  15. San Francisco +4.5%
  16. Seattle +4.4%
  17. Minneapolis +3.1%
  18. Dallas +2.9%
  19. Denver +2.7%
  20. Portland +0.9%

Phoenix remained in14th place once again, and is still in the bottom half on a year over year basis. All 20 of the cities are now showing positive price movement from one year ago with Portland once again doing relatively poorly. Southern California is now showing the highest annual appreciation, closely followed by Detroit, Charlotte and Chicago.

The national average is +6.0% year over year. Phoenix is therefore below that percentage once more, in contrast to last month.

©2023 Cromford Associat LLC

Mar 25 - Supply has been gently increasing since the start of 2024 and has reached comfortably north of 17,000. This is still well below the long-term average but is the highest total we has seen in late March since 2019.

Re-sales have been suffering from strong competition from new homes and this source of supply is looking stronger than last year. In February there were 2,810 single-family home permits across Maricopa and Pinal counties which is the highest number since March 2022 and up 107% compared to February last year.

Multi-family permits for February were lower at 1,147 units, down 51% from a year ago. However multi-family permits are a very lumpy number which fluctuates wildly from month to month. It makes more sense to look at an annual running total. This stands at over 20,000 units, which is twice the level we regarded as normal until 2022.

Sellers should expect to be facing increased competition from the new home builders over the coming 12 months.

©2023 Cromford Associat LLC

Mar 21 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The table deteriorated again for sellers since last week, but once again only slightly. The average change in CMI over the past month is +0.1%, down from +0.4%. There is a widening gap between the top and the bottom of the table.

We have 7 cities showing an increase in their Cromford® Market Index over the past month, while 10 have declined. Mesa and Avondale are primarily responsible for the positive average, aided by Maricopa and Tempe. There are no other cities with percentage increases over 3%. Goodyear and Buckeye are once again leading the downward movement, but they have been joined by Gilbert. Buckeye is now well adrift at the bottom. Chandler has lost momentum over the last couple of weeks, but is so far ahead at the top of the table that it has no serious rival at the moment.

10 out of 17 cities are still seller's markets. We have 3 cities that are balanced and 4 are buyer's markets.

©2023 Cromford Associat LLC

Mar 19 - Currently the listing success rate is hovering around 80%. This is higher than it has been since last September and is a reasonably good reading. The long-term average is around 70% these days, but it used to be closer to 65%.

It is a little higher than this time last year and means that 4 out of 5 listings end with a successful close rather than getting cancelled or expiring.

If you are looking for good news, this is in that category.

©2023 Cromford Associat LLC

Mar 18 - I have received a question about what real estate transactions are like in England, where there are very few buyers who are represented by agents. This is prompted by the recent legal agreement with NAR. This has yet to come into effect, but is scheduled for the middle of 2024 and will introduce some major changes into the way compensation is negotiated for buyer's agents. It is possible that more buyers will not be represented at all.

I think most Arizona agents would be surprised by how different the processes are in the UK, so for those who are interested, here are the first 38 differences that I identified:

  1. Commissions are typically 1% to 1.5% payable by the seller to the “estate agent” who advertises the property. The better the agent the higher the commission, generally speaking.
  2. The buyer is usually unrepresented, but there are a few specialist buying agents, used only by very rich people to find suitable properties. These buying agents are paid by the buyer. Buyer's agents claim that their negotiation skills get a lower price for the buyer and this more than pays for their fee.
  3. Caveat emptor applies – the seller is under no obligation to reveal defects in the property. However, most are reasonably honest. Never rely on it about anything important.
  4. There are few lawsuits if something goes wrong. The buyer is expected to do all necessary due diligence before closing and anything discovered afterwards is tough luck.
  5. There are no title companies or title insurance.
  6. There is no MLS. Properties are advertised on a variety of web sites, dominated by Rightmove and Zoopla, which cover the whole country.
  7. There is no Zillow or anything equivalent.
  8. The laws are different in Scotland and Northern Ireland, and I am familiar with the England and Wales system only.
  9. Parties can back out of the agreed sale until exchange of contracts, typically a week before closing. After exchange of contracts the buyer will lose their deposit if they back out. Deposits are usually 10%.
  10. Gazumping and gazundering are common in times of fast price changes. These involve the buyer or seller changing the agreed price before contract exchange. Google the terms if they are unfamiliar (which is likely).
  11. Both buyer and seller use a solicitor to represent them in preparing contracts. Each party has their own solicitor, they cannot share one. A solicitor is a kind of lawyer, but they aren’t qualified to represent you in courts like an attorney would be. Sometimes the lender will require a third solicitor to represent them. These can add a lot to closing costs.
  12. The solicitor has a fiduciary duty to their client. Agents do not, as they are just marketing the property for the seller and often exaggerate or tell outright lies. Estate agents are not held in high esteem in the UK, but solicitors are usually respected.
  13. Estate agents have no required education and are not licensed. Anyone can be an estate agent just by choosing to call themselves one. However wise sellers will carefully choose an agent based on reputation and local knowledge.
  14. If an agent works for a large agency, they will normal receive a salary plus commission. Very few people work for commission only.
  15. No formal contract is used in making an offer. The offer may be just a phone call followed by an email confirmation, voice-mail or text message.
  16. Property titles are recorded in a national database – the Land Registry. It can take months for a purchase to be recorded. Loans are recorded against the property along with other restrictions or covenants that may place a heavy burden on the new owner.
  17. Sellers can sell a home without an agent (like a FSBO), but this is rare unless they are using a “We Buy Any Home” company as a buyer.
  18. Closing takes 3 to 5 months typically. Many things can and do go wrong and sales often fall through because something odd is discovered after the sale is agreed.
  19. The listing agent is paid out of the proceeds of the sale, as is the solicitor. Each party gets their own closing statement, not a common one for both.
  20. After agreeing a price, the buyer must conduct many searches to check the condition and legal status of the property. These searches are arranged by the buyer’s solicitor but require the cooperation of the seller’s solicitor. They can take a very long time, sometimes months.
  21. It is common for the seller to show the property, rather than relying on the selling agent attending.
  22. It is usual to have a long chain of transactions that all have to close at the same time. One end of the chain is a buyer who does not need to sell and at the other end is a seller who does not need to buy. All the others have to buy and sell at the same time. This is a mess, but perfectly normal. You just have to keep calm and carry on.
  23. Planning permission is a crucial ingredient. An acre with no planning permission may be worth $10,000. With planning permission it could be worth $500,000. Planning permission comes from the local government authority.
  24. There are no fixed rate mortgages for more than 5 years. Most mortgages are variable rate, but some are called fixed rate which means the rate is held steady for a short period up to 5 years.
  25. Lenders will usually require a formal valuation, and these are often quite expensive and usually paid for up front. The borrower pays for this.
  26. There are no government guarantees on loans, and nothing like FHA, VA, FANNIE MAE or FREDDIE MAC.
  27. Down payments are usually larger, typically at least 10% and often 25%.
  28. Fishing rights, hunting rights, mining rights etc are often separated from the property in question.
  29. There are very few HOAs but most properties have restrictions attached to their title deeds. The buyer will have to find out what they are and they may be so onerous that they back out.
  30. There are almost no condominiums (called common-hold in UK). Apartments are almost always leasehold rather than freehold (fee simple) and a third party owns the land and the freehold on the building. Owners must pay the freeholder ground rent, though this is often a trivial amount or even zero in a few cases. The leasehold will have a termination date which may be not far into the future or many centuries away. Important to check.
  31. A tax is payable by the buyer based on the contract price. This must be paid in full immediately after completion. It is called Stamp Duty Land Tax and can amount to a very large sum, especially on luxury properties. It is zero or small on most entry-level properties. The tax is higher for investors and second-home purchasers. It is also higher for buyers from abroad.
  32. School catchment areas are a very critical factor for buyers with children. Schools are sometimes very inflexible about who they will accept, based on their home address.
  33. Public transport is widely used, so proximity to a train station or bus service is a key issue in valuation.
  34. Very few properties have air conditioning.
  35. Many properties have no parking of any kind, as they were built before car ownership was widespread.
  36. The median home is about 60% of the size of the median home in Arizona. (1200 sq. ft. versus 2000 sq. ft.) but it will probably be built with more substantial materials (stone, brick, slate) and expected to last a lot longer.
  37. Some homes are several centuries old. Mine is at least 200 years old and no-one remembers when it was first built.
  38. No termites, scorpions or rattlesnakes, but mold is a problem because it is very damp a lot of the time.

There are many more - if you ever move to the UK, you will need to unlearn most of what you knew about real estate. However you could start work as an agent on day one with no education!

©2023 Cromford Associat LLC

Mar 15 - As we mentioned on Mar 10, pricing in the ultra-luxury market has gone a little berserk over the last year. This has caused the annual average $/SF for Paradise Valley single-family detached homes to increase by 16%. 

There is no other city even close to this 16% appreciation rate and the majority of cities are still in negative territory. Carefree at 4.1%, Youngtown at 3.8% and Eloy at 3.4% are the only ones over 3%

The premium for living in Paradise Valley is the highest we have ever seen. Is this a new normal or will we see a reversion to the long-term trend line?

At the other end of the scale, Tonopah, Coolidge, Gold Canyon, Sun City West and Arizona City are below -5%.

©2023 Cromford Associat LLC

Mar 14 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The table deteriorated for sellers since last week, but only slightly. The average change in CMI over the past month is +0.4%, down from 0.8%. There is a wide gap between the top and the bottom of the table.

We have 7 cities showing an increase in their Cromford® Market Index over the past month, while 10 have declined. This is another table with a majority of red markers, with Glendale changing sides after a very good run higher. In fact, despite its CMI moving lower, it jumped into second place over Gilbert, which declined by a larger amount.

Mesa is primarily responsible for the positive average, aided by Avondale. There are no other cities with double figure percentage increases. Goodyear and Buckeye are once again leading the downward movement, the latter now well below 70 with Maricopa opening up a gap after improving by 6%.

10 out of 17 cities are still seller's markets. We have 3 cities that are balanced and 4 are buyer's markets. Queen Creek's stay in the balanced range of 90-110 was short-lived.

Both supply and demand are rising, but both at a very slow pace. Supply has slightly more momentum and so the overall CMI has fallen back from 117 to 115 over the past month. This slight deterioration for sellers is not what they hope to experience in the prime buying season. The average 30-year fixed rate mortgage dropped to 6.85% on March 8, but has climbed back over 7% again. We are not anticipating significant improvement in demand unless and until we see rates fall lower and stay consistently below 6.5%

©2023 Cromford Associat LLC

May 10 - We have been producing a chart similar to the one below for 15 years but it has never quite looked like this before.

Something very unusual is happening in the ultra-luxury home market. The average price per sq. ft. for homes priced at $7.5 million or more has increased by over 33% over the last 12 months. This is based on the recorded selling prices, not the asking prices. It compares February 2023 with February 2024. Admittedly the sample size is not huge. Only a handful of homes over $7.5 million are closed each month. But if we look at a similar chart based on a whole year of sales we get the following:

This is pretty convincing evidence that buyers of ultra-luxury homes have been willing to follow the market much higher, while homes under $2 million have not seen the same exuberance.

I am not sure how to explain this, but clearly buyers of these homes are not constrained by affordability issues that affect the rest of the market.

©2023 Cromford Associat LLC

Mar 7 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

We have 8 cities showing an increase in their Cromford® Market Index over the past month, while 9 have declined. This is the first table with a majority of red markers since December 21.

Despite the slim majority moving in favor of buyers, the average change is still positive at 0.8%, but this is down from 1.6% last week. Mesa is single-handedly responsible for the positive average of 0.85, because without mesa the average would be -0.3%. Tempe, Avondale, Chandler and Queen Creek are the only other cities with a substantial move higher over the past month.

Goodyear and Buckeye are leading the downward movement, the latter now below 70 and replacing Maricopa at the foot of the table.

10 out of 17 cities are still seller's markets. We have 4 cities that are balanced and 3 are buyer's markets. Queen Creek has moved back into the balanced range of 90-110.

Demand is still rising, although very slowly. Supply is also still rising, but at a slightly faster pace. This means there is now a small amount of momentum towards a more neutral market. This does not apply as much to the Southeast Valley which is still significantly favorable to sellers. Glendale, Avondale and Phoenix are also in the control of sellers.

©2023 Cromford Associat LLC

Mar 5 - The affidavits of value have been counted and analyzed for Maricopa County's February filings and her is what we found:

  • There were 5,933 closed transactions, up a tiny fraction from 5,910 in February 2023 and up 25% from January.
  • There were 1,345 closed new homes, up 11% from 1,208 in February 2023 and up 23% from January.
  • There were 4,588 closed re-sale transactions, down 2.4% from 4,702 in February 2023 but up 25% from January.
  • The overall median sales price in February was $467,234, up 6.2% from February 2023 and up 2.7% from January.
  • The re-sale median sales price was $450,000, up 7.1% from February 2023 and up 2.5% from January.
  • The new home median sales price was $516,215, up 0.3% from February 2023 and up 3.3% from January.

Closing counts were again weak in February for re-sales, but robust for new homes. Pricing was impressive for re-sales but less so for new homes, up only 0.3% from a year ago.

New homes took 23% market share. Three years ago new homes were less than 16% of the total units sold.

These numbers are for single family and townhouse / condo homes.

©2023 Cromford Associat LLC

Mar 2 - The new home market is still relatively buoyant compared to the re-sale market by a large margin.

In January across Maricopa and Pinal Counties, we saw 1,507 new homes closed. This is up almost 14% from 1,324 in January 2023. In contrast normal MLS re-sales in the same territory numbered 2,950. This is not only down 5% from January 2023, it is the lowest monthly total in the last 11 years. These numbers include single-family, townhouse and condo property types.

The numbers look even more extreme if we consider only Pinal County. We saw just 241 normal MLS re-sales in January 2024, down over 19% from 299 in January 2023. New home sales are more numerous than re-sales in Pinal, with 341 in January 2023 growing 21% to 413 in January 2024.

©2023 Cromford Associat LLC

Mar 1 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

We have 10 cities showing an increase in their Cromford® Market Index over the past month, while 6 have deteriorated and 1 is stationary. Scottsdale, Paradise Valley, Fountain Hills, Surprise, Buckeye and especially Goodyear have once again moved in a direction that is favorable to buyers. .

There has been an average monthly increase of 1.6% in the Cromford® Market Index for the 17 cities, down from the 3.1% we recorded last week. Thanks to the strong performance of Chandler, Mesa, Glendale and Tempe, we are still reporting a positive change over the month but the trend is still weakening and on the current path we are heading towards neutrality

10 out of 17 cities are still seller's markets. We have 3 cities that are balanced and 4 are buyer's markets. This is similar to last week, but Maricopa has overtaken Buckeye while Queen Creek has almost achieved a balanced market.

The overall CMI for the market is stuck near 117 and has fallen slightly over the past 14 days. Demand is still rising slowly, but so is supply. Both are heading very slowly back towards normality, which is a reading of 100. They have a long way to go, and at 67.5 the Cromford® Supply Index is still below the Cromford Demand® Index at 78.7, but it is increasing at a slightly faster rate. This means buyers are very slightly improving their bargaining power. This power is strong in the areas with a CMI below 80 and almost non-existent in areas over 150.

More central areas with a lot of mid-range homes continue to be the strongest sub-markets. Upscale areas are looking weaker than last year, as are the outlying areas, particularly in the West Valley.

©2023 Cromford Associat LLC

Feb 29 - Despite the relatively poor performance of rents over the past year, construction plans for multi-family rental units continue unabated. This is surprising to us.

The annual rate for multi-family construction permits stands at 21,261 units at the end of January, close to its highest value ever (21,861). This is almost 3 times as high as it was five years ago across Maricopa and Pinal counties.

Where are all the new tenants coming from?

  1. Growth of the existing population through births exceeding deaths (nope).
  2. Inbound migration from other parts of the USA (yes).
  3. Inbound migration from other parts of the world (yes).

The first of these is not happening. Birth rates in Arizona have fallen along with almost all parts of the developed world. The most numerous generation, the baby boomers, is reaching advanced age and is clearly not going to be fully replaced by the newest one. This is no sign at all that fertility will rise. In fact the opposite is more likely. Arizona reported 55.5 live births per 1,000 women aged 15-44 during 2021. This is down .from 67.3 in 2011, a drop of almost 18%. While a big drop, it is smaller than we are seeing in many other areas. This is expected to become a severe economic problem over the next few decades, especially for countries with the lowest fertility rates, such as South Korea, China and Japan.

Excess housing is not a problem we have had to face as a long-term issue in Arizona, but it is not impossible to imagine. It is already happening in Italy, Japan and in many Eastern European countries. It has even happened in the USA, such as in parts of upstate New York and in economically challenged areas of a few southern states. Through massive over-building, China is estimated to have 50 million homes with no-one to occupy them. How this plays out is still unknown, but confidence in real-estate values is now very shaky across China.

So increases in population to fill these new homes in Arizona will need to come entirely from inbound migration exceeding outbound migration. This strong inward flow currently exists and is needed to compensate for the natural decline in population that would otherwise occur through deaths exceeding births. A corollary of this is that if Arizona became less attractive for inward migration than it is today, it could pose a risk to its residential property market. We should be thankful that we are not currently facing that issue, but we need to avoid being complacent.

How could such a change take place? Climate risks are the most obvious, but not the only ones.

©2023 Cromford Associat LLC

Feb 27 - The latest S&P / Case-Shiller® Home Price Index® numbers were published this Tuesday.

The new report covers home sales during the period October to December 2023. This means the typical home sale closed in mid November, more than 3 months ago. Please remember that Case-Shiller data is fairly old, even on the day it is released.

We have 3 of the 20 cities showing rising prices for last month, with a lower index for Phoenix for the second time in 10 months. 17 cities declined over the last month with Minneapolis the most affected.

Comparing with the previous month's series we see the following changes:

  1. Miami +0.3%
  2. Las Vegas +0.2%
  3. Los Angeles +0.1%
  4. Washington -0.0%
  5. New York -0.0%
  6. Atlanta -0.1%
  7. Charlotte -0.1%
  8. Chicago -0.2%
  9. Tampa -0.3%
  10. Denver -0.5%
  11. Seattle -0.5%
  12. Phoenix -0.6%
  13. Detroit -0.7%
  14. Cleveland -0.7%
  15. Dallas -0.7%
  16. San Diego -0.8%
  17. Boston -0.8%
  18. San Francisco -0.9%
  19. Portland -1.0%
  20. Minneapolis -1.0%

Phoenix has dropped from 11th to 12th place since last month. The national average increase month to month was -0.4%, so Phoenix fell just below that standard.

Comparing year over year, we see the following changes:

  1. San Diego +8.8%
  2. Los Angeles +8.3%
  3. Detroit +8.3%
  4. Chicago +8.1%
  5. Charlotte +8.0%
  6. Miami +7.8%
  7. New York +7.6%
  8. Cleveland +7.4%
  9. Boston +7.2%
  10. Atlanta +6.3%
  11. Washington +5.1%
  12. Las Vegas +4.2%
  13. Tampa +4.1%
  14. Phoenix +3.8%
  15. San Francisco +3.2%
  16. Seattle +3.0%
  17. Minneapolis +2.9%
  18. Denver +2.3%
  19. Dallas +2.2%
  20. Portland +0.3%

Phoenix remained in14th place, and is still in the bottom half on a year over year basis. All 20 of the cities are now showing positive price movement from one year ago with Portland once again doing relatively poorly. Southern California is now showing the highest annual appreciation, closely followed by Detroit and Chicago.

The national average is +3.0% year over year. Phoenix is therefore exceeding that percentage, in contrast to last month.

©2023 Cromford Associat LLC

Feb 26 - Supply is stronger than it was this time last year. It is likely to increase further in 2024 because the number of single-family building permits issued in January was 2,720 across Maricopa and Pinal counties. This is up a massive 147% from January 2023 when we counted only 1,102. The home builders appear to be in an ebullient mood. This is in growing contrast to the re-sale industry which is still struggling with low volumes and weak demand.

The January 2024 count is the highest monthly total since May 2022.

Subscribers to Cromford® Public can view permit counts by county for the whole of Arizona from 1996 to 2024.

©2023 Cromford Associat LLC

Feb 23 - At the start of the year we were hoping that sales volume would have turned around by now and be starting to climb as the Spring season got underway. This is unfortunately not happening yet. The latest reading for the annual closing rate is 72,223 across all areas & types. This is down from 72,359 a week ago and 72,448 the week before that. Not encouraging.

There are a few segments that are seeing some growth, but even in the City of Phoenix, we have dropped below 10,000 single-family closings per year for the first time since 2008.

©2023 Cromford Associat LLC

Feb 22 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

We have 11 cities showing an increase in their Cromford® Market Index over the past month, while 6 have deteriorated. Scottsdale, Paradise Valley, Fountain Hills, Surprise, Buckeye and Goodyear have moved in a direction that is favorable to buyers. Doing the same over the past week are Cave Creek, Peoria and Glendale, while among the secondary cities, Anthem, Apache Junction, Arizona City, Casa Grande, Laveen, Sun City West and Tolleson all saw their CMI readings fall compared to a week ago.

There has been an average monthly increase of 3.1% in the Cromford® Market Index for the 17 cities, down from the 5.3% we recorded last week. Thanks to the strong performance of Chandler, Mesa, Gilbert, Tempe and Phoenix, we are still reporting a positive change over the month but the trend is definitely weakening and this trend may not hold for much longer.

10 out of 17 cities are seller's markets. We have 3 cities that are balanced and 4 are buyer's markets.

The overall CMI for the market is stuck near 117 and has fallen slightly over the past 7 days. Demand is still rising slowly, but so is supply. Both are heading back towards normality, which is a reading of 100. They have a long way to go, and at 66.6 the Cromford® Supply Index is still below the Cromford Demand® Index at 78.1, but it is increasing at a slightly faster rate.

©2023 Cromford Associat LLC

Feb 17 - Listing under contract counts continue to be underwhelming, only reaching 8,182 after 7 weeks of the year. The same time last year we had 8,877 and 12,131 the year before.

The original chart can be found here.

Although demand has improved a little since late 2023, it remains very subdued and is having difficulty catching up to last year, which was pretty poor in the first place. With typical 30-year fixed mortgage rates over 7% again, we are not seeing much enthusiasm among buyers, who were clearly hoping rates would fall below 6.5% at least.

Last year the market caught a second wind in April but ran out of puff 2 months later. It is by no means clear what it will do in 2024, but so far it is merely ticking over, providing very little to get excited about.

©2023 Cromford Associat LLC

Feb 15 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

 We have 12 cities showing an increase in their Cromford® Market Index over the past month, while 5 have deteriorated and a few more have started to decline over the last 2 weeks. Scottsdale, Paradise Valley, Fountain Hills, Surprise and Goodyear are moving in a direction that is favorable to buyers. Doing the same over the past week is Buckeye, while among the secondary cities, Anthem, Apache Junction, Arizona City, Casa Grande, Gold Canyon, Laveen, Litchfield Park, Sun City West and Tolleson all saw their CMI readings fall last week, though not by a large amount.

There has been an average increase of 5.3% in the Cromford® Market Index for the 17 cities, down from the 8.1% we recorded last week. We are still reporting a positive change over the month but the trend is definitely weakening and this is not what we expect to see once the Super Bowl is over. That event usually fires the starting pistol for the housing market, but it is not exactly racing out of the blocks in 2024.

We still see weakness in the top end of the market. Demand remains relatively healthy but supply is much stronger than in 2023, especially for homes over $2 million. Cave Creek is doing better, but is recovering from very weak 4Q of 2023.

The healthiest segment is the mid-range, especially in locations closer to the center of Greater Phoenix. This includes Phoenix itself, plus Chandler, Gilbert, Glendale, Mesa, Tempe, Avondale and Peoria. Several of the most distant and more affordable areas are getting rather more supply than seller's would like. A prime example is Casa Grande.

10 out of 17 cities are seller's markets. We have 3 cities that are balanced and 4 are buyer's markets, with Goodyear joining Queen Creek, Buckeye and Maricopa.

©2023 Cromford Associat LLC

Feb 7 - The good news is that the annual sales rate has stopped falling. The bad news is that it has not started rising.

We appear to be stuck at the very low rate of between 72,100 and 72,600 closed listings per year across all areas & types. Just 2 years ago we were at 110,000, so we are missing some 38,000 deals compared with then.

©2023 Cromford Associat LLC

Feb 13 - Using the contract ratio to see which locations are hot right now, we find Tolleson way out in front. At 135 it is one of only two cities of any size that have a contract ratio over 100. El Mirage is the second with a reading of 134 which has risen dramatically over the past week. These are both inexpensive locations that are not too far out, which seem to be the most in favor at this particular point in time.

Also sporting high contract ratios are Apache Junction (95), Chandler (87), Laveen (87), Glendale (82), Gilbert (80), Tempe (78), Mesa (77) and Sun Lakes (75).

At the bottom of the pack is Paradise Valley with a contract ratio of 20. Cave Creek is at 33, Goodyear is 35, Scottsdale is 36, Gold Canyon 40 and Maricopa 44. These areas are cool on a supply versus demand basis. In some (such as PV and Scottsdale) it is because we have an unusually strong supply of new high-end listings. In others, it is because we have a much healthier supply of homes for sale than in the valley as a whole.

We normally expect lower priced areas to show a higher contract ratio, and vice-versa. On this basis, Goodyear and Maricopa stand out as cooler than expected.

©2023 Cromford Associat LLC

Feb 11 - The percentage of list price that sellers achieve with the contract price is up from 96.61% a year ago to 97.58% today. This reflects a more positive mood than we were seeing a year ago. At 117.5 the Cromford® Market Index is slightly lower than it was last year (120.8) and it is not showing much momentum in either direction, while last year it was moving steadily higher.

Messages from the data are giving us mixed signals. The signals are weak too. Demand is improving but so is supply. Normally this would lead to greater volume but any growth in sales is so slow that it is almost imperceptible, when seasonality is taken into account.

Last year we saw 60.6% growth in listings under contract on February 11 compared with the start of the year. This year the growth is 59.9%, very slightly worse and starting at a lower base point.

Altogether there is not much to get excited about if you are longing for positive movement. On the other hand, there is also not much to get excited about if you are hoping for the market to crash. I have nothing to satisfy either of these positions.

Arizona is famous for its boom and bust real estate cycles, but at this moment it is very much stuck in neutral.

©2023 Cromford Associat LLC

Feb 8 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The market is getting more diverse with some segments slowing down while other are improving for sellers. We still have 13 cities showing an increase in their Cromford® Market Index over the past month, but 4 have deteriorated and several more are starting to decline. Scottsdale and Surprise have joined Fountain Hills and Goodyear in posting s decline in the last month. Also falling in the last week are Buckeye, Maricopa and Paradise Valley.

There has been an average increase of 8.1% in the Cromford® Market Index for the 17 cities, down from the 10.5% we recorded last week. We are still seeing a positive change over the month but the trend is slowing and this is not what sellers want to see at this time of year. Supply is growing in the more expensive locations and also in several of the cheapest and most distant areas from Central Phoenix. Paradise Valley has over 200 active listings without a contract for the first time since 2020. Cave Creek has bounced back after a worrying spell well below 100 but is also seeing inventory starting to grow.

Once again doing well over the last month are mid-range areas that are not too far from the center of the valley. These include Glendale, Tempe, Chandler, Gilbert and Peoria, as well as Phoenix itself. These markets are looking healthy in terms of supply versus demand, although transaction volume remains poor.

10 out of 17 cities are seller's markets. We have 4 cities that are balanced and 3 that remain buyer's markets.

©2023 Cromford Associat LLC

Feb 7 - The good news is that the annual sales rate has stopped falling. The bad news is that it has not started rising.

We appear to be stuck at the very low rate of between 72,100 and 72,600 closed listings per year across all areas & types. Just 2 years ago we were at 110,000, so we are missing some 38,000 deals compared with then.

Mortgage interest rates have been rising again for the last 3 weeks, so a volume breakout is looking unlikely in the short term.

If we were sailors we would call this the doldrums.

©2023 Cromford Associat LLC

Feb 5 - The Affidavits of Value recorded during January by Maricopa County have now been analyzed and show us the following:

  • There were 4,745 closed transactions, up 3.8% from 4,571 in January 2023 but down 5.2% from December.
  • There were 1,089 closed new homes, up 10% from 988 in January 2023 but down 21% from December.
  • There were 3,656 closed re-sale transactions, up 2% from 3,583 in January 2023 and up 0.9% from December.
  • The overall median sales price in January was $455,000, up 3.4% from January 2023 but down 1.1% from December.
  • The re-sale median sales price was $439,000, up 4.5% from January 2023 but down 0.2% from December.
  • The new home median sales price was $499,990, down 1.1% from January 2023 and down 1.1% from December.

Sales counts were again weak in January, though re-sales were slightly higher than December, which is unusual.

Prices were moderately higher than a year ago for re-sales and the market as whole, but the new home median was lower than last year, mainly because the typical new home is smaller than it was in January 2023.

In summary we have price stability and a low-transaction count, with the new home market taking a higher share of the market (23%) than normal. Three years ago new homes were less than 15% of the total units sold.

These numbers are for single family and townhouse / condo homes.

©2023 Cromford Associat LLC

Feb 1 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The chart is no longer all-green and the situation is getting interesting. We still have 15 cities showing an increase in their Cromford® Market Index over the past month, but a few of these have seen a decline in the most recent week. These include Scottsdale, Surprise and Maricopa.

There has been an average increase of 10.5% in the Cromford® Market Index for the 17 cities, down from the 12.4% we recorded last week. The reason is that supply is mounting rapidly in the more expensive locations and also in some of the cheapest and most distant areas from Central Phoenix. Faring very well over the last month are mid-range areas that are not too far from the center of the valley. These include Glendale, Tempe, Chandler, Gilbert and Peoria, along with Phoenix itself. These markets are looking remarkably strong and price increases are to be anticipated here.

It is a different story at the top end of the market, which has been flooded with new listings over the past month. The higher up the price range you go, the more the supply has increased. Paradise Valley has more single-family homes available now than at any time since November 2020. Carefree has the most homes available since July 2020 while Rio Verde has the most since December 2017. Some sellers in these up-scale areas are facing stiff competition from other sellers and it would not be surprising if we see significant price cuts among some of these listings. We have 71 single-family homes priced at $10 million or more. Given that we have never seen more than 29 such listings closed in a single 12-month period, this is a lot of supply. Sellers may need to be either very patient or flexible.

10 out of 17 cities are seller's markets. We have 4 cities that are balanced and 3 that remain buyer's markets.

Among the secondary cities, Anthem, Apache Junction and Tolleson are out-performing by a long way, but El Mirage, Litchfield Park, Sun City West, Sun Lakes and Laveen are weakening and Gold Canyon is already weak at 80.2.

Casa Grande is very weak indeed and has the lowest CMI at 67.8 and trending lower. Buyers are very much in control in Casa Grande.

©2023 Cromford Associat LLC

Jan 30 - The latest S&P / Case-Shiller® Home Price Index® numbers were published this Tuesday.

The new report covers home sales during the period September to November 2023. This means the typical home sale closed in mid October, more than 3 months ago. Please remember that Case-Shiller data is fairly old, even on the day it is released.

We have 7 of the 20 cities showing rising prices for last month, with a lower index for Phoenix for the first time in 9 months. 13 cities declined over the last month with Seattle the most affected.

Comparing with the previous month's series we see the following changes:

  1. Miami +0.3%
  2. Cleveland +0.3%
  3. New York +0.3%
  4. Charlotte +0.2%
  5. Las Vegas +0.2%
  6. Tampa +0.1%
  7. Los Angeles +0.1%
  8. Atlanta 0.0%
  9. Boston -0.2%
  10. Washington -0.3%
  11. Phoenix -0.3%
  12. Chicago -0.4%
  13. Detroit -0.4%
  14. San Diego -0.5%
  15. Dallas -0.6%
  16. Minneapolis -0.8%
  17. Denver -0.9%
  18. Portland -1.0%
  19. San Francisco -1.3%
  20. Seattle -1.4%

Phoenix has dropped from 2nd to 11th place since last month. The national average increase month to month was -0.18%, so Phoenix fell just below that standard.

Comparing year over year, we see the following changes:

  1. Detroit +8.2%
  2. San Diego +8.0%
  3. New York +7.4%
  4. Cleveland +7.4%
  5. Los Angeles +7.2%
  6. Miami +7.2%
  7. Boston +7.1%
  8. Chicago +7.0%
  9. Minneapolis +7.0%
  10. Atlanta +5.9%
  11. Washington +4.7%
  12. Tampa +3.4%
  13. Minneapolis +2.7%
  14. Phoenix +2.5%
  15. Las Vegas +2.1%
  16. San Francisco +2.0%
  17. Dallas +1.7%
  18. Seattle +1.6%
  19. Denver +1.5%
  20. Portland -0.7%

Phoenix has crept up from 18th to 14th place, but is still in the bottom half on a year over year basis. 19 of the 20 cities are now showing positive price movement from one year ago and Portland is again doing relatively poorly.

The national average is +5.1% year over year. Phoenix is showing less than half that percentage.

©2023 Cromford Associat LLC

Jan 29 - The Cromford® Market Index has reached a plateau just above 117 and shows little momentum beyond that.

Sellers seem to have lost the reticence they developed last year and are delivering plenty of new supply. 8,278 new listings have been posted in the last 4 weeks. This is the highest total since October 20, 2022 and represents a 16% increase over this time last year. The CMI is stationary because demand and supply are both increasing in step. Which one will become dominant in February?

©2023 Cromford Associat LLC

Jan 28 - The number of active listings without a contract has crept above 16,000 again. This is still low compared with a normal market, but a strong flow of new listings is creating a small rise from the low point of 14,593 that we saw at the start of the year. With a low closing rate of close to 4,000 per month, this is a healthy level of supply. However, demand continues to rise, with listings under contract up 43% in those same 4 weeks. It would be reasonable to expect the active supply level to peak at this point and start to fall again once February gets under way.

©2023 Cromford Associat LLC

Jan 25 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

Yet another all-green chart with 17 cities showing an increase in their Cromford® Market Index over the past month.

There has been an average increase of 12.4% in the Cromford® Market Index for the 17 cities, a strong rise but down slightly from yje 12.6% we recorded last week. The drop in interest rates that started in October is bringing more offers for homes listed for sale. However there are also far more new listings arriving on the market than this time last year, which is stopping the market from heating up too fast. Year to date we have seen 7,467 new listings. This is up more than 22% from 2023 and even up 13% from 2022 and 10% from 2021. Nobody should be complaining about a lack of fresh supply any more, especially in the higher price ranges.

Demand is improving even faster, with 7,428 listings under contract, up 41% compared with the beginning of 2024. The monthly sales rate is still stuck around 4,000 because that depends on contracts signed during December which were unusually weak. We should start to see improving closing volumes in February.

Leading the pack once again are Gilbert, Glendale, Surprise, Phoenix and Peoria. The laggards include Goodyear, Scottsdale, Fountain Hills and Paradise Valley. The top end of the market is seeing a lot of new supply.

10 out of 17 cities are seller's markets. We have 4 cities that are balanced and 3 that remain buyer's markets, with Buckeye and Maricopa seeing a large amount of competition with supply from new home builders.

With demand and supply both increasing, we should see a recovery in transaction volumes and firm pricing, without the risk of runaway appreciation. However sentiment remains uncertain and volatile, so it would be wise not to look away for very long, or the situation may catch you by surprise. Of course, the Cromford® Report will not be looking away at all. We remain obsessed with this stuff.

©2023 Cromford Associat LLC

Jan 21 - The average price per square foot of active listings just hit a new all-time high of $366.43 yesterday. This surpassed previous peaks set in May 2022 and June 2023.

Active listings are arriving in much larger numbers than last year, when they were unusually scarce. The new listing arrival rate is back to normal, but the seller's expectations seem to be unusually positive, judging by the asking prices. The average $/SF has risen 2.1% in just the last two weeks. These figures are averaged across all areas & dwelling types.

©2023 Cromford Associat LLC

Jan 20 - A few cities have seen a sharp rise in their contract ratio over the past 2 weeks. The percentage increases for single-family detached homes are shown in the table below:

  1. Apache Junction +64% to 94
  2. Anthem +47% to 71
  3. Arizona City +47% to 57
  4. Gilbert +46% to 65
  5. Sun Lakes +45% to 59
  6. Chandler +43% to 72
  7. Tempe +31% to 53
  8. Peoria +31% to 49
  9. Gold Canyon +30% to 32

These are the locations that have experienced the most rapid improvement in demand versus supply.

A handful have gone backwards:

  1. Fountain Hills - down 11% to 36
  2. Laveen - down 15% to 67
  3. Goodyear - down 7% to 33
  4. Sun City West - down 5% to 36

Phoenix is up 18% to 48.

In most areas, a contract ratio over 40 is consistent with a seller's market. More expensive locations tend to have lower contract ratios, so Paradise is only 21, (up 20%), while Scottsdale is 30 (up 15%).

The contract ratio is one of the leading indicators of a change in the market.

©2023 Cromford Associat LLC

Jan 18 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

Another all-green chart with 17 cities showing an increase in their Cromford® Market Index over the past month.

There has been an average increase of 12.6% in the Cromford® Market Index for the 17 cities, a rapid rise and even more positive than the 10% increase we recorded last week. The implication is that the drop in interest rates started in October is finally bringing more offers for homes listed for sale. As is normal in January, new listings are also arriving in stronger numbers, but the total supply remains well below normal. In addition the demand appears to rising at a significantly faster rate than the supply.

Leading the pack this week are Gilbert, Glendale, Surprise, Phoenix and Peoria. The laggards include Maricopa, Goodyear and Paradise Valley, but even these are higher than last week.

10 out of 17 cities are seller's markets. We have 4 cities that are balanced and only 3 that remain buyer's markets, with Cave Creek escaping that zone over the last week.

Sales volume remains very low, but closings are always very week in January due to the dearth of new contract signings in December. The precursor of a recovery is strong growth in new contracts. These numbers are by no means amazing but they do seem to be increasing at a healthy pace and in a pattern reminiscent of a normal sellers' market. Moderate optimism seems to be in order and this is reflected in the most recent home builder confidence survey. The NAHB / Wells Fargo Housing Market Index has jumped from a very weak 34 in November to 37 in December and 44 in January. A year ago it stood at only 31, so home builder sentiment is trending higher fast but is yet to reach the heights of last Summer when it stood in the mid-50s.

©2023 Cromford Associat LLC

Jan 11 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

In a development that will bring joy to sellers and dismay to housing-crash forecasters, all 17 cities are now showing an increase in their Cromford® Market Index over the past month.

There has been an average increase of 10% in the Cromford® Market Index for the 17 cities, significantly more positive than the 6% increase we recorded last week. The trend in favor of sellers is accelerating as listings go under contract at a faster rate and supply remains well below normal..

Leading the charge are Fountain Hills, Gilbert, Glendale and Surprise. The laggards include Tempe, Maricopa, Cave Creek, Avondale, Buckeye and Paradise Valley, but even these are now improving for sellers.

9 out of 17 cities are seller's markets. We have 4 cities that are balanced and 4 that remain buyer's markets.

Last week we recommended mild to moderate optimism for the month of January, and this can be modified to remove the reference to mild. It is a good start to the year and transaction volumes appear likely to start improving if this trend holds. We will be examining annual sales counts and looking for stability followed by a gentle increase.

©2023 Cromford Associat LLC

Jan 10 - Expanding on yesterday's observation, the bar chart below ranks the cities by the 2 year change in the annual average price per square foot for closed listings, measured at the end of 2023.

Paradise Valley is way out in front with an increase of over 42%. Other cities with a healthy proportion of luxury homes appear close to the top, including Scottsdale, Fountain Hills, Cave Creek, Carefree and Rio Verde.

Arizona City prices have risen the least - though still up 8.5% over the 2 years. The 55+ areas were also slower movers, with Sun City, Sun City West and Sun Lakes all below 12%.

The outer areas are a mixed bag, with Wickenburg, Coolidge, Wittmann, Rio Verde, Anthem, Waddell and New River all in the upper ranges. In contrast Arizona City, Tonopah, Queen Creek, Buckeye and Florence did relatively poorly.

This is the first time since 2000 that we have seen Paradise Valley accelerate well ahead of the pack. It probably has something to do with the number of homes that are torn down and replaced with new builds that have extremely high costs per square foot. This process extends the gap between Paradise valley and Scottsdale home pricing.

©2023 Cromford Associat LLC

Jan 9 - Throughout the last year it has become more and more obvious that the top-end of the market is behaving differently from the entry-level and the mid-range.

Using a long-term average smooths out the data, a very necessary thing for studying the high-end where sample sizes are very low. For example there were no sales over £10 million in December, so the sample set was null for that month.

Above $2,000,000 we see that the annual average $/SF is higher than a year ago, but below $2,000,000 it is lower. The cheaper you go the more 12-month average prices tend to have fallen.

Homes above $10 million have become more expensive and at the fastest rate. Homes between $300,000 and $400,000 have seen their annual average $/SF drop over the last month by more than other price ranges.

We rarely see such a clear pattern, so I conclude that something is bolstering the luxury market. It is not lack of supply, which is plentiful, although active listing counts are not excessive compared to the normal levels at these altitudes. It seems that luxury buyers have been less affected by the high interest rates which appear to have had a much more serious effect on first-time home buyers.

©2023 Cromford Associat LLC

Jan 7 - The Affidavits of Value recorded during December by Maricopa County have now been analyzed and show us the following:

  • There were 5,007 closed transactions, down 13% from 5,758 in December 2022 but up 2.5% from November.
  • There were 1,385 closed new homes, down 18% from 1,685 in December 2022 but up 14% from November.
  • There were 3,622 closed re-sale transactions, down 11% from 4,073 in December 2022 and down 1% from November.
  • The overall median sales price in December was $460,000, up 2.2% from December 2022 but down 1.1% from November.
  • The re-sale median sales price was $440,000, up 4.8% from December 2022 but down 1.6% from November.
  • The new home median sales price was $506,330, down 2.9% from December 2022 but up 0.3% from November.

Sales counts were weak again in December, with re-sales even lower then November, which is unusual.

Prices were moderately higher than a year ago for re-sales and the market as whole, but the new home median was lower than last year, mainly because the typical new home is smaller than it was in 2022.

These numbers are for single family and townhouse / condo homes.

©2023 Cromford Associat LLC

Jan 4 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The same 4 cities as last week are showing red, and the same 13 cities are seeing their Cromford Market Index increase since December 4. However, there has been an average increase of 6.0% in the Cromford® Market Index for the 17 cities, significantly more positive than the 2.0% increase we recorded last week. The means the trend in favor of sellers is starting to accelerate.

Fountain Hills, Surprise, Glendale, Queen Creek and Gilbert are seeing the biggest improvement of 11% or more.

9 out of 17 cities are now seller's markets. We have 4 cities that are balanced and 4 that are buyer's markets. Maricopa is still trailing but it starting a recovering trend having hit a low of 63.7 on December 25.

The very mild optimism that was the order of the day in December is starting to look well-justified. We recommend mild to moderate optimism for the month of January, at least as far as market balance is concerned. Transaction volumes remain subdued but are more likely to recover if the market balance stays favorable to sellers..

Jan 1 - The Cromford® Market Index is moving higher, partly because the count of active listings declined during December (as expected) and partly because there is a slight increase in demand. This increase in demand is very muted however. We did see an small upward move in the closing rate over the last 2 weeks but there has also been a large fall in the number of listings under contract. 

©2023 Cromford Associat LLC

Jan 1 - The Cromford® Market Index is moving higher, partly because the count of active listings declined during December (as expected) and partly because there is a slight increase in demand. This increase in demand is very muted however. We did see an small upward move in the closing rate over the last 2 weeks but there has also been a large fall in the number of listings under contract. This is because the closings have taking a big chunk out of the pipeline that has not been replaced by new contract signings.

We are starting 2024 with one of the lowest counts of listings under contract we have ever recorded for the start of any year (5,127). We measured 5,456 last year and 9,393 in 2022. We have to go back all the way to the dark days of 2008 to find a lower count (3,468). 2007 was also very bad, but at 5,197 it just beats the 2024 reading.

With interest rates much lower than 2 months ago, we may start to see more accepted contract activity in the next few weeks. We normally get a lot of new listings in January too, so at this stage it is too early to tell whether supply or demand will grow the fastest. The next 3 weeks will be very important in establishing which trend is dominant.

©2023 Cromford Associat LLC

Dec 28 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The table is now dominated by green with 13 cities seeing their Cromford Market Index increase since November 28. There has been an average increase of 2.0% in the Cromford® Market Index for the 17 cities, significantly more positive than the 3.0% decline we recorded last week, confirming the trend in favor of sellers..

Only Paradise Valley, Tempe, Cave Creek and Maricopa are still showing declines over the last month with Goodyear, Surprise and Queen Creek seeing the biggest improvement of 10% or more.

8 out of 17 cities are now seller's markets. We have 5 cities that are balanced and 4 that are buyer's markets. Maricopa is still trailing but appears have turned around, having hit a low of 63.7 on December 25..

©2023 Cromford Associat LLC

Dec 26 - The latest S&P / Case-Shiller® Home Price Index® numbers were published this Tuesday.

The new report covers home sales during the period August to October 2023. This means the typical home sale closed in mid September, more than 3 months ago. Please remember that Case-Shiller data is fairly old, even on the day it is released.

We have 11 of the 20 cities showing rising prices for last month, with a higher index for Phoenix for the eighth month in a row. However 9 cities declined over the last month with Portland the most affected.

Comparing with the previous month's series we see the following changes:

  1. Miami +0.6%
  2. Phoenix +0.6%
  3. New York +0.5%
  4. Los Angeles +0.4%
  5. Boston +0.3%
  6. Detroit +0.3%
  7. Las Vegas +0.3%
  8. Charlotte +0.3%
  9. Chicago +0.2%
  10. Atlanta +0.2%
  11. Cleveland +0.2%
  12. Tampa -0.0%
  13. San Diego -0.1%
  14. Washington -0.3%
  15. Dallas -0.3%
  16. Minneapolis -0.3%
  17. Seattle -0.5%
  18. Denver -0.6%
  19. San Fransisco -0.6%
  20. Portland -0.9%

Phoenix has risen from 5th to 2nd place since last month. The national average increase month to month was +0.17%, so Phoenix remains well ahead of that standard.

Comparing year over year, we see the following changes:

  1. Detroit +8.1%
  2. San Diego +7.2%
  3. New York +7.1%
  4. Chicago +6.9%
  5. Miami +6.7%
  6. Boston +6.6%
  7. Cleveland +6.4%
  8. Los Angeles +6.1%
  9. Charlotte +6.0%
  10. Atlanta +5.3%
  11. Washington +4.7%
  12. Minneapolis +2.8%
  13. Tampa +2.3%
  14. San Francisco +1.6%
  15. Denver +1.6%
  16. Seattle +1.5%
  17. Dallas +1.2%
  18. Phoenix +0.9%
  19. Las Vegas +0.1%
  20. Portland -0.6%

Phoenix has crept up from 19th to 18th place, but still among the weakest cities on a year over year basis. 19 of the 20 cities are now showing positive price movement from one year ago and once again most of the northern cities are looking good on the year over year measure, along with Southern California.

The national average is +4.8% year over year.

Once again there is no evidence of either a local or national housing price crash over the last 12 months. Only Portland is showing a small decline from 12 months ago.

©2023 Cromford Associat LLC

Dec 23 - The monthly average price per sq. ft. across all areas & types in the ARMLS database is up 6.4% from 12 months ago. $266.78 has moved to $283.87.

Many of the so-called real estate pundits on YouTube and elsewhere were predicting a massive crash of up to 70% (yes, seriously) for Phoenix housing. They did not do this because they have a deep understanding of how the housing market works (obviously). They did it because predictions of disaster catch people's attention, generate views and therefore advertising revenue for Google and the video publisher. There is no shame involved.

You may be wondering what these pundits do when their older videos are proven to be so massively wrong by the real world. They just delete their older videos and publish the same predictions for the next year. Repeat again and again.

Some have been doing this for many years and there always seem to be enough new viewers gullible enough to keep watching their crazy predictions. Being consistently wrong for several years does not seem to dampen their enthusiasm for making videos. They must like the income I suppose. By deleting all their videos more than 3 months old, they hide how appalling their forecasting ability has been shown to be. In the wider economic world, there are many book authors in the same mold who sell lots of books but get their predictions wrong year after year. Harry Dent springs immediately to mind, but there are lots more.

The Cromford® Report market commentary is based on actual data, careful statistical mathematical calculation and over 20 years of experience measuring the Phoenix market. We never delete any of our materials. You can check what we said against what actually happened.

During the first quarter, several subscribes wrote to us and said we might be too optimistic, but the numbers never lie to us. The housing market has survived intact and is now in better health price-wise than it was this time last year, though admittedly we could all do with a lot more transaction volume. These emails were valuable to me because I took them as a signal that public perception was much worse than reality, even for experienced and highly competent professionals.

The last 200 years years have shown us that for home prices to go significantly down, we have to have an excess of homes for sale chasing too few buyers. Right now, buyers are indeed thin on the ground, but we still have overall supply well below normal and heading lower. For a housing crash we would need a flood of new homes for sale. The reason it might occur is not important, but without this flood, price will remain stable at worst.

Supply is going down, but this is normal for December every year. The important stuff will happen in January. Will more than the usual number of buyers emerge due to falling mortgage rates, or will we see a surge in new listings. The balance between these two measures will determine the direction of prices in the first quarter of 2024 and anyone who tells you they already know what will happen is selling you a lie.

The future is largely unknown, but at least we can understand the present properly. The Cromford® Market Index is in the balanced zone around 105 and increasing slightly. To conclude we have any credible evidence of an imminent crash would be simply illogical.

©2023 Cromford Associat LLC

Dec 21 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

There has been an average decline of 3.0% in the Cromford® Market Index for the 17 cities above over the last month. This is a big improvement over the 6.7% decline we saw last week, but the average CMI is still somewhat lower than a month ago. However the average CMI has not fallen over the past week has risen by 1% and we are now officially in a recovery trend.

Moving up over the past month, Scottsdale, Goodyear and Chandler have been joined by Fountain Hills, Surprise, Queen Creek and Buckeye. Only Paradise Valley, Cave Creek and Maricopa are still showing double-digit percentage declines over the last month.

8 out of 17 cities are still seller's markets. We have 4 cities that are balanced and 5 that are buyer's markets. Maricopa stands out as by far the weakest market of the 17 and it has yet to turn around..

©2023 Cromford Associat LLC

Dec 21 - If we are prepared to use completed ARMLS rental listings as our source, then the average rent in Greater Phoenix has been stuck between $1.32 and $1.43 per sq. ft. per month since July 21, almost two and a half years ago. The 12 month moving average is $1.35 and the reading for December 2023 is currently $1.32. Given that inflation has been running hot during this period, the effective cost of renting has come down relative to average incomes, which have definitely increased (though not for everyone, especially some of those working in real estate whose income depends on transaction volumes).

The interactive version of this chart is available here.

This could be interpreted as making renting more attractive than buying. The Economist, Wall Street Journal and New York Times have recently come out with articles concluding exactly that.

This is based on comparing the monthly cost of renting versus the monthly cost of a typical mortgage. The shift has been dramatic, because rents have gone down in real terms (relative to the value of the dollar), while home prices and interest rates have both risen much faster than inflation. This is a key reason why demand to buy a home is low right now. We can see from the multi-family permit charts in Cromford® Public that developers have created a huge number of new apartments to cope with the rental demand along with an increasing number of build-to-rent single-family homes and condos. This massive additional supply has stopped rents rising.

But this is not the complete story. There are many benefits and costs associated with owning a home that are not taken into account by that analysis of the basic monthly expenses. These can completely swamp the monthly cost numbers, but building them into a model is often tricky and requires forecasts of the future value of a home, which is fraught with uncertainty at any time. If you rent, the landlord is the one who benefits from any appreciation in the asset but is also responsible for much of the costs of ownership, such as property tax, maintenance, HOA dues, building insurance, etc. For the past 80 years, real-estate has appreciated in value, except for a few temporary isolated periods. There are always some pundits calling for a massive fall in prices, but 95% of the time they are proven wrong. By renting, you are forgoing any chance of sharing in the benefits of appreciation, or indeed the costs of ownership.

In an analysis of household wealth, we find the most significant component of net worth is usually the equity that household has built up in either the home they live in or the homes they invested in to rent out as landlords, or both. You rarely find households with significant net worth living in rented accommodation, unless they intend to move somewhere else within the next couple of years. A telling statistic is that the net worth of the average homeowner is 44 times that of the average tenant.

The advantage of owning over renting is smaller now than it was a few years ago, but unless you plan to stay in a property less than 4 years, it is usually financially beneficial to buy if you possibly can. Just make sure you can afford the repayments before you jump, because buying a home and losing it to foreclosure is definitely unhealthy for your finances.

©2023 Cromford Associat LLC

Dec 18 - We are still waiting for the annual sales count to give us some encouraging sign.

In a good strong market this number is over 100,00. We are currently below 72,600 and despite the improving interest rate picture, the annual sales rate is drifting slightly lower. This measure is free of seasonal effects, because it measures a whole year of sales activity, so if the market is improving we should see a rising trend, no matter what time of year. Admittedly closed sales counts are a trailing indicator, but it would be reasonable to expect something better than 73,000 if the market is starting to recover its mojo.

The general opinion seems to be that things will improve in January. If this chart starts to move higher, we will start to believe that opinion has merit. Right now we wait to be convinced.

©2023 Cromford Associat LLC

Dec 16 - The Cromford® Market Index for all areas & types appears to have finished its decline and has settled around 104, in the balanced zone between 90 and 110. In fact it reached a low point of 104.0 last Monday and Tuesday and has eased up up 104.2 today.

This partly because the Demand Index has stopped declining and partly because the Supply Index has stopped rising. They are all showing little inclination to move at the moment and we probably won't get much action, or feel for direction, until we get into the second week of January.

Perhaps surprisingly, the lower interest rates have not brought a lot of new signings. The number of homes under contract is only 5,777 today, the lowest count since January 8 and well below the 6,333 we measured the same time last year. Yesterday's rate for 30-year fixed loans was 6.64%, while the 30-year FHA rate was 6.14%. These are much lower than a month ago and far below the rates in mid to late October.

It is entirely possible that buyers are waiting for January rather than committing themselves to house-hunting during December.

With the CMI above 100, we should not be seeing significant weakness in pricing, so I hope buyers are not waiting for overall price drops. Individual listings give us price cuts all the time, but these are balanced by new listings coming in at higher levels. Any price weakness is likely to be concentrated in the areas with the lowest CMI, such as Maricopa, Buckeye, Queen Creek (including San Tan Valley), Cave Creek and Surprise. Among the smaller cities, Casa Grande, Gold Canyon and Sun City look the weakest. In contrast we see strength building in Apache Junction and Litchfield Park.,

©2023 Cromford Associat LLC

Dec 14 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

There has been an average decline of 6.7% in the Cromford® Market Index for the 17 cities above over the last month. This is an improvement over the 9.9% decline we saw last week, but the average CMI is still significantly lower than a month ago.

We are watching to see which cities start to move in a positive direction, and this week Scottsdale has joined Goodyear and Chandler. But others, like Paradise Valley, Cave Creek, Maricopa, Glendale and Phoenix are still showing double-digit percentage declines over the last month.

Given how much interest rates have fallen since October - and the typical 30-year fixed rate is down to 6.62% today - everyone seems to be expecting the housing market to react very positively. Indeed home-builder's stocks have been on a rampage. Our housing market numbers tell a much less exciting story. Demand has edged slightly higher in quite a few places, but given the extremely low monthly sales rates, it would take a very long time to get back to normal at the current rate of improvement. Supply normally declines sharply between Thanksgiving and New Year's Eve, but in 2023, it is barely declining at all. The market reaction to the lower rates is so-far underwhelming.

9 out of 17 cities are still seller's markets, though Tempe, Mesa and Avondale are only a tad higher than the balanced zone. We have 3 cities that are balanced and 5 that are buyer's markets. Maricopa stands out as the weakest market of the 17 with buyers have a strong negotiation advantage in that city, thanks to its plentiful supply.

©2023 Cromford Associat LLC

Dec 11 - After an unexpectedly strong interval in November, closed prices have fallen back to an average around $285 per sq. ft. and are now slightly lower than they were 2 months ago.

However, the average $/SF for listings under contract has not dropped and is still holding the line at $325. We always expect any unusually wide gap between the green line and the brown line to get smaller.

The overall market is now close to balance but some areas in a buyer's market and other's in a seller's market. In these conditions the most likely result is for pricing to remain very calm.

Those expecting and/or hoping for strong price moves either up or down are probably going to be disappointed. Conditions would need to change a lot for either event to occur.

©2023 Cromford Associat LLC

Dec 10 - An interesting trend jumps out from one of the charts in our Cromford Public section:

This is New Home Sales for single-family only and shows that the annual average size of a new home peaked in March 2015 and has been dropping almost every month since then. In October 2023 the annual average was 2,216 sq. ft., which is down 367 sq. ft. 14% from the peak. When looking at the median or average price of a new home, please take into account that new homes bought recently will on average be significantly smaller than those bought earlier.

The same does not apply to new townhouse / condo properties, which typically average 1,700 sq. ft. and are on a gentle upward trend since 2013.

©2023 Cromford Associat LLC

Dec 7 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

There was an average decline of 9.9% in the Cromford® Market Index for the 17 cities above. This is an improvement over the 13.1% decline we saw last week, but it is still a negative move. We a watching to see which cities start to move in a positive direction. So far we have Goodyear which has raised its CMI an impressive 13% and is now back in the balanced zone after spending 55 days as a buyer's market. Chandler has also shown an improvement over the last month, but this is a less impressive 2%. However it gets credit for staying at the top of the table and its lead over Fountain Hills has opened up significantly.

The remaining 15 cities have all moved down, with Paradise Valley collapsing by 26% and now below 100. Cave Creek, Glendale and Maricopa are also heavily down and the all-important Phoenix is down 15%. Demand is clearly picking up, but not as energetically as you might expect after almost 100 basis points have been lopped off the 30-year fixed mortgage rate. We hear that purchase applications for mortgages jumped 35% last week, but this is from an extremely low level.

A few cities have seen their CMI move higher in the last week: Surprise, Buckeye, Avondale, Queen Creek, Mesa and Scottsdale. However, some of this is due to the usual seasonal weakening of supply and cannot be fully credited to stronger demand.

9 out of 17 cities are still seller's markets with Paradise Valley, Goodyear and Peoria in the balanced zone while Cave Creek, Surprise, Buckeye, Queen Creek and Maricopa are all buyer's markets. Maricopa and Buckeye have dropped below 70, so buyers have a strong advantage in these locations.

So in summary. we are seeing gradual improvement in the demand trend, and supply is no longer increasing in most areas.

©2023 Cromford Associat LLC

Dec 6 - Despite high mortgage rates and reports of delinquency problems in car loans and credit cards, the vast majority of borrowers are keeping current with their mortgage payments.

Serious delinquencies on home loans fell to a 17-year low in October, according to Black Knight Financial Services. Although national foreclosure starts jumped to their highest level in 18 months, they are still 25% below pre-pandemic levels.

You can check the pending foreclosures for Maricopa County in our foreclosure chart, but I can save you the time. The is nothing interesting to see. We are still below 1,000 pending foreclosures, which for a county as large as Maricopa, is a very small number.

©2023 Cromford Associat LLC

Dec 5 - The Affidavit of Value recorded during November by Maricopa County have now been analyzed and show us the following:

  • There were 4,887 closed transactions, down 8% from 5,333 in November 2022 and down 12% from October.
  • There were 1,220 closed new homes, down 11% from 1,364 in November 2022 and down 18% from October.
  • There were 3,667 closed re-sale transactions, down 8% from 3,969 in November 2022 and down 10% from October.
  • The overall median sales price in December was $465,000, up 2.2% from November 2022 and up 0.3% from October.
  • The re-sale median sales price was $447,000, up 4.0% from November 2022 and up 0.6% from October.
  • The new home median sales price was $505,050, down 4.7% from November 2022 and down 0.7% from October.

New home sales were weaker in November and the median price was down too. However the average size of a new home has been falling and this accounts for about half of the median price drop since November 2022. November is always a weak month for closings, especially new homes. Many builders tend to focus on closings by year end and quarter end, rather than mid-quarter.

The re-sale market remained very quiet, with prices holding up well.

These numbers are for single family and townhouse / condo homes.

©2023 Cromford Associat LLC

Dec 2 - The typical 30-year fixed mortgage rate has dropped significantly since October, falling from 7.92% on October 30 down to 7.09% as of December 1.

You might have expected this significant drop in the cost of buying a home to result in a jump in the number of people contracting to do so. There have been some reports of a jump in mortgage applications, but as far as the ARMLS database is concerned, the number of listings under contract is distinctly underwhelming - 5,817 as of December 2 and still well below the 2022 number.

A few areas have perked up, but others have shown no enthusiasm at all and overall I would describe buyer's reaction to the reduced rates as very muted.

Perhaps they are waiting for the new year? 

©2023 Cromford Associat LLC

Nov 30 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

There was an average decline of 13.1% in the Cromford® Market Index for the 17 cities above. This is an improvement over the 15.2% decline we saw last week, and a more substantial improvement than last week.

The majority of cities were worse than average, including Paradise Valley, Cave Creek, Glendale, Phoenix, Surprise, Mesa, Peoria, Maricopa, Queen Creek and Avondale.

Once again, Goodyear stands out as the only major city that saw its CMI improve over the last month. and it has almost escaped its buyer's market and resumed a balanced status. Also doing relatively well are Chandler, Fountain Hills and Tempe. Scottsdale and Buckeye have improved over the last week

9 out of 17 cities are still sellers markets with Paradise Valley and Peoria in the balanced zone while Cave Creek, Surprise, Buckeye, Goodyear, Queen Creek and Maricopa are all buyers' markets. Maricopa, Queen Creek and Buckeye have dropped below 70, so buyers have a strong advantage in these locations. The situation for sellers is worse because there is so much competition from new home builders in these areas.

We are seeing gradual improvement in the demand trend, and supply has finally stopped increasing in most areas, which is what we expect to see once Thanksgiving is over..

©2023 Cromford Associat LLC

Nov28 - The latest S&P / Case-Shiller® Home Price Index® numbers were published this Tuesday.

The new report covers home sales during the period July to September 2023. This means the typical home sale closed in mid August, more than 3 months ago.

We have 15 of the 20 cities showing rising prices for last month, with a higher index for Phoenix for the seventh month in a row. However 5 cities declined over the last month.

Comparing with the previous month's series we see the following changes:

  1. Detroit +0.68%
  2. New York +0.62%
  3. Las Vegas +0.60%
  4. Miami +0.59%
  5. Phoenix +0.54%
  6. Tampa +0.54%
  7. Boston +0.47%
  8. Charlotte +0.46%
  9. Cleveland +0.33%
  10. Chicago +0.27%
  11. Los Angeles +0.19%
  12. Washington +0.13%
  13. Atlanta +0.10%
  14. San Francisco +0.06%
  15. San Diego +0.05%
  16. Dallas -0.13%
  17. Denver -0.35%
  18. Portland -0.41%
  19. Minneapolis -0.43%
  20. Seattle -0.53%

Phoenix has risen from 6th to 5th place since last month. The national average increase month to month was +0.30%, so Phoenix remains comfortably ahead of that standard.

Comparing year over year, we see the following changes:

  1. Detroit +6.7%
  2. San Diego +6.5%
  3. New York +6.3%
  4. Chicago +6.0%
  5. Boston +5.3%
  6. Los Angeles +5.2%
  7. Cleveland +5.1%
  8. Miami +5.0%
  9. Charlotte +4.7%
  10. Washington +4.4%
  11. Atlanta +4.3%
  12. Minneapolis +2.4%
  13. Tampa +1.5%
  14. Denver +1.0%
  15. Seattle +0.9%
  16. San Francisco +0.5%
  17. Dallas +0.3%
  18. Portland -0.7%
  19. Phoenix -1.2%
  20. Las Vegas -1.9%

Phoenix lies once again in 19th place, and among the weakest cities on a year over year basis. 17 of the 20 cities are now showing positive price movement from one year ago and once again the northern cities are looking good on the year over year measure, along with Southern California.

The national average is +3.9% year over year.

We can see that Phoenix pricing has been much weaker than the national average between 3Q 2022 and 3Q 2023.

We can also see that those predicting a nationwide housing crash over the 12 months were wrong. No surprise there.

©2023 Cromford Associat LLC

Nov 25 - Here is the weekly chart of active listing counts for all areas & types for 2022 and 2023:

We can see that the count has not yet stopped rising although the rate of increase is slowing down. Last year we saw the count decline from early November. We appear destined to end 2023 with supply roughly the same as we started in January, around the 16,000 mark.

So far, demand is showing only a weak positive response to lower interest rates and the overall market is in a balanced situation, with seller's still having an advantage in the most sought-after locations while buyers have the edge at the fringes.

Prices continue to hold up well, probably because we don't see the widespread fear that dominated market sentiment 12 months ago. However 12 months ago we were at a turning point where the situation started to improve, while right now we are waiting for the market to stop deteriorating. 

©2023 Cromford Associat LLC

Nov 23 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

There was an average decline of 15.2% in the Cromford® Market Index for the 17 cities above. This is an improvement over the 16.1% decline we saw last week, but not a very big one.

The majority of cities were worse than average, including Paradise Valley, Cave Creek,Glendale, Phoenix, Surprise, Mesa, Peoria, Maricopa, Queen Creek, Avondale, Scottsdale and Buckeye.

Goodyear stands out as the only major city that saw its CMI improve over the last month. Also doing relatively well are Tempe, Fountain Hills and Chandler.

10 out of 17 cities are still sellers markets with Peoria and Cave Creek in the balanced zone while Surprise, Buckeye, Goodyear, Queen Creek and Maricopa are all buyers' markets. Maricopa and Queen Creek are below the 80 level and Buckeye has dropped below 70.

We are seeing a little improvement in the demand trend, but supply continues to increase in most areas, which is unusual for the third week of November.

Nov 15 - We have the first signs that demand is starting to recover, thanks to the lower mortgage rates that now prevail. Today we are looking at 7.45% for a typical 30-year fixed loan and 6.77% for FHA. These are still not great rates, but preferable to the 7.88% and 7.31% that prevailed on October 31.

Today's contract ratio for all areas & types is 40.56, up from 37.46 on November 4. It is still lower than a month ago, but the trend has changed direction. It had been in clear decline between late May and early November.

Supply usually weakens each year once we get to Thanksgiving. If demand can hold its current trend, then we are optimistic that the weakening market can stabilize by the end of the year. Of course, all bets are off if interest rates move higher again.

Nov 13 - The monthly table of 41 cities ranked by annual average $/SF has been published today.

©2023 Cromford Associat LLC

Nov 20 - After the recent fall in mortgage interest rates, it is reasonable to expect some signs of a recovery in demand. That is likely to show up in the number of listings under contract.

Can we see any signs of improvement? Yes - November is looking slightly better than October, taking the low level at the end of October into account. In fact it has the best monthly profile since May.

Are we impressed? No, not really. We are still stuck below 6,600 listings under contract and that is far below normal for the time of year. It would take some solid growth before the end of 2023 before we would count ourselves impressed. Finishing the year comfortably over 7,000 would do that, but I am not holding my breath.

©2023 Cromford Associat LLC

Nov 19 - The Cromford® Market Index for all areas & types has fallen from 113.9 to 109.4 over the last 7 days and is now within the balanced zone of 90 to 110.

It is currently still in a downward trend with supply rising and demand falling. Seasonal patterns make it likely that this downtrend will flatten out over the next 6 weeks, but we will have to wait and see if this materializes.

©2023 Cromford Associat LLC

Nov 16 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

There was an average decline of 16.1% in the Cromford® Market Index for the 17 cities above. This is slightly less bad than the 16.3% decline we saw last week.

Well above average declines in CMI can be seen in Cave Creek, Buckeye, Mesa, Scottsdale, Glendale, Paradise Valley, Surprise and Phoenix. The slowest declines are to be found in Goodyear and Tempe. In fact Goodyear has started to see its CMI rise over the past week.

10 out of 17 cities are still sellers markets with Peoria and Cave Creek in the balanced zone while Surprise, Buckeye, Goodyear, Queen Creek and Maricopa are all buyers' markets. Maricopa and Queen Creek are below the 80 level and Buckeye has dropped below 70.

©2023 Cromford Associat LLC

Nov 15 - We have the first signs that demand is starting to recover, thanks to the lower mortgage rates that now prevail. Today we are looking at 7.45% for a typical 30-year fixed loan and 6.77% for FHA. These are still not great rates, but preferable to the 7.88% and 7.31% that prevailed on October 31.

Today's contract ratio for all areas & types is 40.56, up from 37.46 on November 4. It is still lower than a month ago, but the trend has changed direction. It had been in clear decline between late May and early November.

Supply usually weakens each year once we get to Thanksgiving. If demand can hold its current trend, then we are optimistic that the weakening market can stabilize by the end of the year. Of course, all bets are off if interest rates move higher again.

©2023 Cromford Associat LLC

Nov 13 - The monthly table of 41 cities ranked by annual average $/SF has been published today.

It is striking how far Paradise Valley has moved in a positive price direction (12.7%) over the past 12 months, opening up an even wider gap with the rest of Greater Phoenix. Scottsdale has also moved slightly higher by 1.3%, but Paradise Valley is now priced at 71% higher than Scottsdale, up from a 54% premium last year.

Wittmann and Youngtown, both tiny and therefore subject to volatility, are the only other cities showing a positive move over the past 12 months, based on the ANNUAL average $/SF. The monthly average $/SF for these locations is close to useless because of the small sample size for sales in a single month.

At the other end of the scale, Arizona City, Sun City West, Sun City, Tonopah, Queen Creek, Avondale, Florence and Surprise have seen the largest declines in their average $/SF, down more than 5%. We conclude that the huge rise in mortgage rates has negatively affected the lower priced areas on the perimeter of the valley more than the luxury locations and those closer to the center.

©2023 Cromford Associat LLC

Nov 9 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

Based on the numbers in this table. the market is still weakening at a fast rate, with an average decline of 16.3% in the Cromford® Market Index for the 17 cities above. This is worse than the 15.8% decline we saw last week.

Well above average declines in CMI can be seen in Cave Creek, Buckeye, Mesa, Scottsdale, Paradise Valley, Surprise and Phoenix. The slowest declines are to be found in Gilbert, Goodyear and Tempe.

10 out of 17 cities are still sellers markets with Peoria and Cave Creek in the balanced zone while Surprise, Buckeye, Goodyear, Queen Creek and Maricopa are all buyers' markets. Maricopa has joined Queen Creek and Buckeye below the 80 level. Among the secondary cities, Casa Grande and Gold Canyon are also below 80 while Litchfield Park is below 90.

Tolleson, Laveen, Sun Lakes, Anthem, El Mirage and Apache Junction are the strongest of the secondary cities, all with CMIs over 180.

Despite the above, we are just starting to see a slight tick-up in some of the listings-under-contract numbers, as the market reacts to the very recent decline in mortgage rates since the start of November.

©2023 Cromford Associat LLC

Nov 6 - Despite the plunging Cromford® Market Index, pricing trends have been largely favorable over the past 2 months. Here is the 6 month chart showing daily readings for the active listing average $/SF, under contract average $/SF, closed list price average $/SF and closed sale price average $/SF.

The active listing $/SF is lower than it was 6 months ago, but that follows the usual seasonal pattern with a weak 3Q followed by a mild recovery. The current trend is pretty flat with optimistic new listing prices being balanced by price cuts for existing listings that remain on the market for more than a few weeks.

Under contract $/SF is a lot higher than it was 6 months ago, around $320 compared with $302, a rise of around 6%. However the trend for the last month has flattened.

The list $/SF for closed listings stands at $303, up from $287 six months ago, a rise of just under 6%.

The sale $/SF for closed listings stands at $297, up from $280 six months ago, a rise of just over 6%.

Closed listings are achieving a slightly higher percentage of the final asking price compared with 6 months ago. It is up from 97.58% to 97.97%, a positive sign.

Since the end of August the gap between the under contract line (green) and the closed line (brown) has been too big. When this happens, it is safe to predict the gap will close. In this case, prices for closed listings rose significantly while under contract prices remained stable. The gap is now back to normal. Closed prices are unlikely to rise much further from this point unless under contract prices establish an upward trend again. Given the balance between supply and demand, it seems more likely that under contract pricing will weaken, but we will have to wait and see what recent moves in interest rate do to buyer enthusiasm.

©2023 Cromford Associat LLC

Nov 3 - The Affidavit of Value recorded during October by Maricopa County have now been analyzed and show us the following:

  • There were 5,543 closed transactions, down 8% from 6,019 in October 2022 and down 6% from September.
  • There were 1,480 closed new homes, up 5% from 1,410 in October 2022 but down 9% from September.
  • There were 4,063 closed re-sale transactions, down 12% from 4,609 in October 2022 and down 5% from September.
  • The overall median sales price in October was $470,000, unchanged from October 2022 and up 4.4% from September.
  • The re-sale median sales price was $445,000, down 0.6% from October 2022 but up 1.1% from September.
  • The new home median sales price was $538,422, up 1.8% from October 2022 and up 12% from September.

New home sales have remained resilient and grew year over year, despite the extremely weak demand in the re-sale market.

Unlike the last 2 months, the new home numbers were not impacted by large buy-to-rent transactions with low unit prices. Consequently the new home median sales price jumped to $538,422, the highest we have ever recorded. It is not that there were no BTR transactions in September - they were just sold at more normal new home prices.

These numbers are for single family and townhouse / condo homes.

©2023 Cromford Associat LLC

Nov 2 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The market is still weakening and at a faster rate, with an average decline of 15.8% in the Cromford® Market Index for the 17 cities above. This is worse than the 14.5% decline we saw last week.

Well above average declines in CMI can be seen in Cave Creek, Buckeye, Mesa, Scottsdale, Paradise Valley, Chandler, Peoria , Surprise and Phoenix. Falling but at a lower speed are Gilbert, Avondale, Maricopa and Tempe.

11 out of 17 cities are still sellers markets with Peoria and Surprise in the balanced zone while Buckeye, Goodyear, Queen Creek and Maricopa are all buyers' markets. Queen Creek has joined Buckeye below the 80 level. Among the secondary cities, Casa Grande is also below 80 while Gold Canyon and Litchfield Park are below 90.

Tolleson, Laveen, Anthem, El Mirage and Apache Junction are the strongest of the secondary cities with CMIs over 190.

©2023 Cromford Associat LLC

Oct 31 - The latest S&P / Case-Shiller® Home Price Index® numbers were published this Tuesday.

The new report covers home sales during the period June to August 2023. This means the typical home sale closed in mid July, more than 3 months ago.

We have 13 of the 20 cities showing rising prices for last month, with a higher index for Phoenix for the sixth month in a row. However 7 cities declined slightly over the last month.

Comparing with the previous month's series we see the following changes:

  1. Miami +1.21%
  2. Las Vegas +1.10%
  3. Detroit +0.81%
  4. Charlotte +0.77%
  5. Atlanta +.76%
  6. Phoenix +0.67%
  7. Boston +0.60%
  8. San Diego +0.58%
  9. New York +0.50%
  10. Los Angeles +0.45%
  11. Tampa +0.38%
  12. Seattle +0.18%
  13. Chicago +0.04%
  14. Denver -0.06%
  15. Washington -0.08%
  16. Minneapolis -0.12%
  17. Portland -0.12%
  18. Dallas -0.18%
  19. Cleveland -0.20%
  20. San Francisco -0.47%

Phoenix has fallen from 2nd to 6th place since last month. The national average increase month to month was +0.43%, so Phoenix remains comfortably ahead of that standard.

Comparing year over year, we see the following changes:

  1. Chicago +5.0%
  2. New York +5.0%
  3. Detroit +4.8%
  4. San Diego +4.1%
  5. Cleveland +3.9%
  6. Atlanta +3.4%
  7. Washington +3.4%
  8. Miami +3.3%
  9. Los Angeles +3.2%
  10. Boston +3.1%
  11. Charlotte +3.0%
  12. Minneapolis +1.9%
  13. Tampa +0.0%
  14. Denver -0.6%
  15. Portland -1.5%
  16. Seattle -1.5%
  17. Dallas -1.7%
  18. San Francisco -2.5%
  19. Phoenix -3.9%
  20. Las Vegas -4.9%

Phoenix lies in 19th place, the same as last month and among the weakest cities on a year over year basis. 13 of th 20 cities are now showing positive price movement from one year ago and once again the northern cities are looking good on the year over year measure.

The national average is +2.6% year over year.

We can see that Phoenix pricing has been much weaker than the national average between 3Q 2022 and 3Q 2023.

©2023 Cromford Associat LLC

Oct 30 - Although the market is weakening quickly, you couldn't tell from the closed listing prices we are recording:

Breaking through the $293 level for the first time since July 12, 2022, this chart gives us the impression of a market in robust health.

This underlines the fact that sales pricing, even when measured every day, is very much a trailing indicator. Many of these prices were established in contracts agreed a few months ago when the Cromford® Market Index was still over 160, representing a strong seller's market with declining inventory. Sales volumes have also held up better in the luxury market than at the opposite end of the market, where first time buyers are having difficulty affording a mortgage. This bias towards the higher end pushes the average $/SF upwards.

The leading indicators, such as the CMI, contract ratio, days of inventory and listing success rate are all reflecting the recent step down in demand and the rapid rise in active listings.

This situation also shows us how poor the S&P / Case-Shiller® Home Price Index is in representing the current state of the market. Not only is the index a trailing indicator, it is 2 to 3 months behind the chart above because it uses a 3-month average for sales that closed between 2 and 5 months ago.

©2023 Cromford Associat LLC

Oct 28 - Active listing counts are rising at the second fastest rate we have ever witnessed for late October. Since the low point of 11,473 (excluding UCB and CCBS) in late July they have climbed almost 35% and are rapidly approaching 16,000. The only year which saw a faster rate was 2005:

2005 saw an increase of almost 80% during the same period, so we are not in that territory. But the increase in available supply is making life more difficult for sellers since they now have to compete far more aggressively for the relatively few buyers out there.

As you might expect, price cuts have risen sharply since July and we are recording well over 2,000 cuts per week. As recently as September, we were seeing fewer than 1,500.

©2023 Cromford Associat LLC

Oct 26 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The market is weakening at a faster rate, with an average decline of 14.5% in the Cromford® Market Index for the 17 cities above. This is worse than the 13.4% decline we saw last week.

Well above average declines in CMI can be seen in Cave Creek, Buckeye, Chandler and Mesa. Falling but at a lower speed are Gilbert, Avondale, Maricopa and Tempe.

12 out of 17 cities are still sellers markets with Surprise in the balanced zone while Buckeye, Goodyear, Queen Creek and Maricopa are all buyers' markets. Buckeye has even slipped below the 80 level.

©2023 Cromford Associat LLC

Oct 23 - Although most measurements of the housing market in Greater Phoenix have shown significant deterioration over the past month, this does not extend to prices


The monthly average sales price per sq. ft. has just breached $290 to the upside, while the average $/SF for listings under contract remains comfortably above $320.

As we see inventory rise we also see more sellers cutting their asking price, but this has not filtered through to the chart above.

©2023 Cromford Associat LLC

Oct 21 - The chart below shows us quite how emphatically the housing market hates interest rates at 8%.

As recently as 3 weeks ago, we had just over 2 months of supply. Now we are headed over 3 months and we should all know that 3.5 to 4.5 months represents a balanced market. At the current rate of change we are only 2 weeks away from that range.

Calculating months of supply involves 2 numbers

  1. The number of active listings (in this chart we have excluded those in UCB or CCBS status).
  2. The monthly sales rate.

Item number one is now growing quickly after a long period of weakness.

Item number two is in a long term downtrend as demand continues to drop.

Both numbers are working together to push months of supply sharply higher

©2023 Cromford Associat LLC

Oct 19 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

 All 17 cities have seen their CMI drop over the last month, meaning that power is quickly slipping away from sellers and moving towards buyers. The average CMI in the table has fallen by 13.4%, well above the 11.2% we measured two weeks ago.

Although almost all pundits predicted rates would fall in the second half of 2023, the typical 30-year fixed mortgage rate is now around 8.03%, up from 7.33 a month ago. In historical terms, this is unexceptional, but the majority of home-buyers are too youmg to have experienced rates at this level before. Unless they are working with a seller who is prepared to buy-down their interest rate, the majority of buyers lack enthusiasm to jump in at this point and many are choosing to wait until times get easier. People would still like to buy a home eventually, so latent demand is rising while actual demand falls.

Supply is now rising at the fastest rate so far this year. The combination of lower demand and higher supply is just what sellers don't want.

Well above average declines in CMI can be seen in Chandler, Cave Creek, Buckeye and Mesa. Falling but at a lower speed are Gilbert, Avondale, Glendale, Queen Creek, Fountain Hills, Tempe and Surprise.

12 out of 17 cities are still sellers markets with Surprise in the balanced zone while Buckeye, Goodyear, Queen Creek and Maricopa are all confirmed as buyers' markets.

©2023 Cromford Associat LLC

Oct 17 - The Cromford® Market Index managed to stay above 160 until August 19, but since then it has declined at an accelerating rate in the face of increasingly unattractive mortgage interest rates.

The 30-year jumbo rate has already breached 8% and the 30-year fixed rate looks likely to follow, after jumping higher at the start of this week. Demand has been weak all year but these rates are driving it to lower levels. At 73.2 the Cromford® Demand Index is the lowest we have recorded since January 11 and is still trending down. In January the Cromford® Supply Index was also heading down fast, keeping the market balanced in favor of sellers. This month we are seeing supply increase, so balance is shifting in favor of buyers.

Although we are not in the balanced CMI range between 90 and 110 yet, the current trend would place us there within a matter of weeks. This is not a reassuring situation for sellers and their confidence is much weaker than it was a couple of months ago. Buyers have a better negotiating position but those needing finance are increasingly dismayed at the cost of their monthly repayment. Both sides are unhappy, leading to weakening transaction volumes and lower closing rates. This spreads the hurt across all sectors of the housing industry. New home builders are the least affected, since they have the financial resources to buy-down the interest rates for their customers and so maintain better sales volumes and pricing.

The listing success rate has declined to around 76% after staying over 80% until the end of July. The positive news is that it has not dropped to the level of this time last year, when we seeing success rates in the low 60s.

©2023 Cromford Associat LLC

Oct 12 - Observations will resume on October 17. Mike Orr is travelling and unable to post for a few days.

©2023 Cromford Associat LLC

Oct 8 - For much of this year, the new listing counts have been extremely low - often more than 40% below the same period in 2022. We saw somewhere between 6,500 and 7,500 new listings every 28 days between May 25 and Oct 2. Since Oct 3, we have been measuring slightly over 7,500 listings per 28 days. The normal level is 9,500 to 11,000. So we are still far below normal for the time of year, but not as far down as for the last 4 months.

The extra new listings are coming just as demand takes another leg down, which means the active listing pool is getting more input and less output. You would therefore expect the active listing count to grow, and you would be correct. For all areas & types we saw 13,901 active listings without a contract on Saturday, up 13,432 a week earlier and 13,103 the week before that.

With monthly and annual sales counts dropping, inventory measures such as months of supply and days of inventory are increasing. Though they are still below normal, the competition among sellers is growing and the buyers that remain have more choice. The market is softer than during the second and third quarters and upward pressure on prices is dissipating.

©2023 Cromford Associat LLC

Oct 6 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities


This is the most dismal table for sellers we have posted since November 10 last year. All 17 cities have seen their CMI drop over the last month, meaning that power is slipping away from sellers and moving towards buyers.

We do not have to look far to find the most obvious reason - mortgage interest rates. While most pundits predicted rates would fall in the second half of 2023, the shortage of buyers for bonds have caused yields to rise. The typical 30-year fixed mortgage rate is now around 7.7%, up from 7.3% a month ago. Understandably, buyers are far from enthusiastic about this and in some cases fail affordability tests they could once have passed easily.

This is not the whole story however, because supply is now rising at the fastest rate we have seen since last year. A combination of lower demand and higher supply means the average CMI in the table has fallen by 11.2%, well above the 9.4% drop we measured last week and 7.8% two weeks ago.

Well above average declines can be seen in Chandler, Goodyear, Buckeye, Maricopa and Mesa. Falling but at a much lower speed are Fountain Hills, Tempe and Surprise.

13 out of 17 cities are still sellers markets (for now) with Buckeye, Goodyear, Queen Creek and Maricopa in the balanced zone. However these 4 cities are now below the 100 mark implying that buyers have a slight edge in negotiations. On the current trajectory, these 4 could all be confirmed as buyers' markets before the end of the month.

Among the secondary cities, Laveen and Tolleson did manage small increases in their CMI, but the other 10 cities declined like their larger counterparts.

©2023 Cromford Associat LLC

Oct 5 - The Affidavit of Value recorded during September by Maricopa County have now been analyzed and show us the following:

  • There were 5,896 closed transactions, down 18% from 7,174 in September 2022 and down 10% from August.
  • There were 1,624 closed new homes, up 1.6% from 1,599 in September 2022 and up 1% from August.
  • There were 4,272 closed re-sale transactions, down 23% from 5,575 in September 2022 and down 14% from August.
  • The overall median sales price in September was $450,000, down 2.8% from September 2022 and down 2.0% from August.
  • The re-sale median sales price was $440,000, down 1.1% from September 2022 and down the same percentage from August.
  • The new home median sales price was $479,102, down 7.4% from September 2022 and down 4.2% from August.

Because the market was already suffering from high interest rates in 4Q 2022, the year over year comparisons do not tell the full story of how much the housing market has contracted. The September 2021 closed transaction total was 11, 257, so last month was down a massive 48% compared with 2 years ago. New home sales have remained resilient and actually grew both month over month and year over year, despite the extremely weak demand in the re-sale market. If we look purely at re-sale closings September was down an incredible 55% compared with 2 years ago in September 2021. In contrast new home closings were down just 3% from 2 years ago.

Once again, the new home numbers were significantly affected by a large buy-to-rent transaction in Buckeye 85326 involving 173 new homes built by DR Horton and purchased by Progress Residential as rentals. This tranche of 173 single-family homes cost $56,206,719.67, meaning they cost only $324,894 each on average. Needless to say the new home median sales price would have been much higher if this transaction were to be excluded.

©2023 Cromford Associat LLC

Oct 3 - The chart we showed on October 1 is somewhat depressing for agents working the re-sale housing market.

However below we have a much more cheerful version:

The key difference is that for this one we only included new home closings.

The dollar volume for new homes is not only higher than every prior year, it is up a massive 11.5% from last year. Clearly agents working for developers are not feeling the same challenges that the rest of the agent community is going through. Business is strong. demand remains good and there is no reluctance to sell due to cheap prior mortgages, because there are no cheap prior mortgages on newly built homes.

In addition, developers are happy to agree to use some of their gross margins to buy-down lower mortgage rates for their customers, at least for the first year or more.

Although the census has reported a sharp fall in building permits for single-family homes compared to a year ago, this trend has now reversed and more new homes are likely to become available in coming months.

©2023 Cromford Associat LLC

Oct 1 - The dollar volume of closed transactions is shown in the chart below taken from the optional Cromford® Public section of our site.

This is for Maricopa and Pinal counties and we have filtered out all transactions except for Normal re-sales that went through the MLS. The numbers are year-to-date as of the end of August for each year.

The drop between 2022 and 2023 is 24%. If you are earning 24% less than last year then you are in-line with the market as a whole.

Even though sales volume is down massively, the increase in prices since 2020 means there is still more business (dollars) in 2023 than in 2020.


©2023 Cromford Associat LLC

Sep 28 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

We still have 2 cities that moved in a direction favorable to sellers over the last month, Cave Creek and Tempe. However these 2 are only just positive and their change over the last 2 weeks is unfavorable for sellers. In any case ,these are two of the smallest of the 17 and the general direction of the market is swinging towards buyers. Supply is increasing and demand remains extremely weak.

We can also see that the market is becoming more favorable to buyers at an accelerating rate. The average CMI change in these 17 cities over the last month was -9.4%, more negative than last week when we measured -7.8%.

Most negative again this week is Chandler, down 28%, though it remains in first place. Goodyear, Maricopa, Buckeye, Mesa and Gilbert are also much weaker than this time last month, down at least 13%.

13 out of 17 cities are still sellers markets with Buckeye, Goodyear, Queen Creek and Maricopa in the balanced zone. However 3 of these cities are now below the 100 mark implying that buyers have a slight edge in negotiations in Goodyear, Maricopa and Queen Creek. On the current trajectory, these 3 could be buyers' markets by mid October, with Buckeye not far behind.

Supply remains well below normal in most areas, but Maricopa's supply index is now over 100, joining Casa Grande. Litchfield Park looks next to breach the 100 mark for its supply.

Supply is still extremely low in Anthem, Chandler, El Mirage and Gilbert.

©2023 Cromford Associat LLC

Sep 26 - The latest S&P / Case-Shiller® Home Price Index® numbers were published this Tuesday.

The new report covers home sales during the period May to July 2023. This means the typical home sale closed in mid June, more than 3 months ago.

We are now seeing all 20 cities showing rising prices for the last few months, with a higher index for Phoenix for the fifth month in a row.

Comparing with the previous month's series we see the following changes:

  1. Las Vegas +1.12%
  2. Phoenix +0.88%
  3. Cleveland +0.85%
  4. Chicago +0.84%
  5. New York +0.81%
  6. Charlotte +0.76%
  7. Miami +0.74%
  8. Tampa +0.74%
  9. Detroit +0.74%
  10. San Diego +0.73%
  11. Atlanta +0.70%
  12. Los Angeles +0.62%
  13. Washington +0.57%
  14. Seattle +0.46%
  15. Dallas +0.30%
  16. Minneapolis +0.21%
  17. Denver +0.18%
  18. Boston +0.14%
  19. San Francisco +0.14%
  20. Portland -0.15%

Phoenix has risen very strongly in this table over the last 3 months, from last place In June to 16th place in July, 7th place in August and 2nd place in September. The national average increase month to month was +0.60%, so Phoenix was also comfortably ahead of that standard.

19 of the 20 cities are showing positive price appreciation month to month though the rates of appreciation are much lower than last month in the majority of them.

Comparing year over year, we see the following changes:

  1. Chicago +4.4%
  2. Cleveland +4.0%
  3. New York +3.8%
  4. Detroit +3.2%
  5. Atlanta +2.2%
  6. Washington +1.9%
  7. Miami +1.9%
  8. Charlotte +1.8%
  9. Boston +1.3%
  10. Minneapolis +1.0%
  11. San Diego +0.7%
  12. Los Angeles +0.4%
  13. Tampa -0.8%
  14. Denver -2.8%
  15. Portland -3.3%
  16. Dallas -3.4%
  17. Seattle -5.5%
  18. San Francisco -6.2%
  19. Phoenix -6.6%
  20. Las Vegas -7.2%

Phoenix lies in 19th place, down from 17th last month and among the weakest cities on a year over year basis. More than half the cities are now showing positive price movement from one year ago and once again the northern cities are looking good on the year over year measure.

The national average is +1.0% year over year.                    

©2023 Cromford Associat LLC

Sep 23 - There are probably many subscribers who wonder why I am so dismissive of the usefulness of measuring days on market. I have no issue with measuring it for a specific listing, though you should always bear in mind that it may have been manipulated by the listing agent. But for the market as a whole, it is an unusually poor indicator. To see this let us look at the current weekly chart

If you were basing your view on this chart, you would take away the impression that the market is improving for sellers and has been since February. This is not true. The market stopped improving back in June and is getting increasingly difficult as inventory starts to build and demand withers in the face of affordability pressures. Yet the average days on market for closed listings continues to fall.

Over the last 20 years, the average days on market can be seen to respond to market changes, but is is usually 2 to 4 months behind the times. This makes it worse than useless. It is positively misleading. We include the chart because so many people are familiar with the measure and want to know what it is. But we attach no credibility to any signals that it might send out. All the signals are out of date by the time they are received.

©2023 Cromford Associat LLC

Sep 21 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

This week we have only 2 cities that moved in a direction favorable to sellers over the last month, with Paradise Valley reversing and only Cave Creek and Tempe left. If we look at the change over the last week, even Tempe & Cave Creek have deteriorated for sellers.

We can safely conclude that the market is becoming more favorable to buyers at an accelerating rate. The average CMI change in these 17 cities over the last month was -7.8%, more negative than last week when we measured -5.9%.

Most negative again this week is Chandler, down 26%, though it remains comfortably in first place. Goodyear and Gilbert are also much weaker than this time last month.

13 out of 17 cities are sellers markets with Buckeye. Goodyear, Queen Creek and Maricopa in the balanced zone. Three of the cities are now below the 100 mark implying that buyers have a slight edge in negotiations in these three cities.

All these observations apply primarily to the re-sale market. The new home market remains more favorable to sellers - the homebuilders are comfortably in charge.

©2023 Cromford Associat LLC

Sep 18 - Over the last 2 months, the average price per sq. ft. for closed listings has been unusually stable. It started at $282.81 on July 18 and ended at $282.57 on September 18.

The average $/SF for the list price of those same closed listings is even more stable. It started at $288.33 and ended at $288.46. Note that this went up very slightly while the average sale price went down very slightly, confirming that listings are closing for a marginally lower percentage of list than 2 months ago.

Meanwhile the average $/SF for listings under contract has been rising over the last month after falling for the month before that. It now stands at $313.72 after starting at $308.40 and dipping to $304.02. This is a consequence of the luxury market waking up after its sleepy summer season.

The gap between the green line and the brown line in the chart is now too wide, suggesting that closed pricing will probably rise between now and October 18.

©2023 Cromford Associat LLC

Sep 17 - Active listing counts have started to rise significantly over the past 2 weeks, with the counts excluding UCB and CCBS listings moving up 6.1% from September 2 to September 16.

New listings are still scarce, but they are less scarce than a month ago. We have seen the 28-day count rise from the low of 6,486 on July 31 to around 7,100 this week. This is still well below normal (9,500 to 10,500) but demand is so weak that an extra 150 listings per week cannot be absorbed.

The increase in supply is causing the Cromford® Market Index to fall, signaling a weakening market balance for sellers.

This trend is looking like it will probably continue until mid-November, when the usual seasonal decline in active listings is likely to kick in. This is good for buyers since they will have more choice and a little extra negotiation power.

©2023 Cromford Associat LLC

Sep 14 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities


This week we again have the only 3 cities that moved in a direction favorable to sellers over the last month, with Buckeye running out of steam.

The other 14 cities all moved in a direction favorable to buyers. The downward trend accelerated since last week. The average CMI change in these 17 cities over the last month was -5.9%, more negative than last week when we measured -3.9%.

There must be something in the waters of Cave Creek, as it is far out of step with the rest of the valley, falling hard earlier in the year but bouncing back now. Paradise Valley is losing momentum and is likely to have turned negative by next week. Tempe retains some momentum, but it is weakening. Overall the situation is deteriorating for sellers, though they still have the advantage in most locations. One exception is Queen Creek, which we would classify as balanced. With a CMI of 97.7, buyers have a slight edge in this large community that includes the poorly-defined and unincorporated San Tan Valley area.

Most negative again this week is Chandler, down 20%, though it remains comfortably in first place. Fountain Hills, Goodyear and Gilbert are also much weaker than this time last month.

14 out of 17 cities are sellers markets with Goodyear, Queen Creek and Maricopa in the balanced zone.                    

©2023 Cromford Associat LLC

Sep 10 - The current trends in the market are lessening the negotiation advantage for sellers and probably making them just a little nervous.

The above chart shows us that supply is starting to rise again. The increase was very modest for the first 6 weeks, but last week saw active listings rise over 3.2% to 12,476. This is still a small number (last year we has over 19,000 at this time), but the trend is of psychological importance. Buyers can flex their muscles a little, especially in the areas with the lowest CMI, such as Casa Grande and Queen Creek.

Of course any major change in mortgage interest rates could set a cat among the pigeons. This uncertainty works both ways, but the 7% level seems to have established itself as the borderline between good and bad sentiment. I am tempted to mention that I bought my first home in 1976 with a variable rate mortgage fixed for the first 5 years at 8.25%. Funnily enough this is actually lower than the 8.75% I am currently paying for all 3 of my residential loans. These examples are in the UK so of limited relevance, but they do remind us that home-buyers in the USA are very lucky to have 30-year and 15-year fixed rate mortgage rates available to them. Such things rarely exist abroad. Banks don't usually offer them without a huge amount of government intervention in the real estate lending market. This government intervention is abnormally large in the USA, compared with most foreign countries, and has been so ever since the end of the second world war.

©2023 Cromford Associat LLC

Sep 9 - Like me, you may have been puzzled by the sudden drop in the new home median between July and August. It came in below $500,000 for the first time since April last year.

I had to examine the individual transactions filed in Maricopa County and immediately noticed something unusual. Invitation Homes purchased an entire subdivision of Build-to-Rent 2-story homes in Litchfield Park. The subdivision is called Las Casas at Windrose and each single-family home offers around 1,940 sq. ft. of living space. They are all rentals but there is also a community center and swimming pool. They are renting for $2,500 to $3,000 per month.

The price paid represents less than $400,000 per home, and the transaction involved 133 units. This is 8.3% of all the new homes closed in Maricopa County during August and it dragged the median down from $522,490 to $499,990.

There is always an explanation if you are able to dig deep enough.

©2023 Cromford Associat LLC

Sep 7 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

This week we again have the same 4 cities that moved in a direction favorable to sellers, but the other 13 moved in a direction favorable to buyers. The downward trend accelerated since last week. The average CMI change in these 17 cities over the last month was -3.9%, more negative than last week when we measured -2.9%.

Buckeye is still moving higher but has lost momentum. Cave Creek is bouncing back hard, and is the fastest riser over the past month. Paradise Valley and Tempe are also looking relatively strong.

Most negative this week is Chandler, down 16%, though it remains comfortably ahead of the rest. Fountain Hills and Gilbert are also significantly weaker than this time last month.

15 out of 17 are sellers markets with Queen Creek and Maricopa in the balanced zone.

Among the secondary cities Casa Grande has slipped below 90 and is now classified as a buyer's market. It is the only one so far. Among the rest of the secondary cities, Anthem, Apache Junction, Laveen, Sun Lakes and Tolleson are looking strong with CMI's over 200. Only Laveen and Arizona City have seen an increase in their CMI over the past month, so the general trend is downward among these 12 cities too.

©2023 Cromford Associat LLC

Sep 5 - The Maricopa County affidavits of value filed during August have been analyzed and we found:

  • there were 6,556 closed transactions, down 12% from August 2022 but up 8% from July 2023
  • new home closings totaled 1,607, down 1.7% from August 2022 but up 19% from July 2023
  • re-sale closings came in at 4,949, down 14% from August 2022 but up 4.7% from July 2023
  • the median sales price was $459,076, down 1.6% from August 2022 and down 1.3% from July 2023
  • the median sales price for new homes was $499,990, down 2.4% from August 2022 and down 6.3% from July 2023
  • the median sales price for re-sale homes was $445,000, down 1.1% from August 2022 and unchanged from July 2023

Closings bounced back a little from July, but remain a long way below 2022 levels. The new home market continues to show more strength than the re-sale market, particularly in volume. However the new home sales mix moved sharply toward cheaper homes between July and August causing the median to drop dramatically by more than 6%, This was not caused by home builders lowering prices. It reflects smaller homes closing during August and fewer large luxury homes closing escrow. This is not an unusual occurrence for August but the scale of the change is larger than we usually see.

©2023 Cromford Associat LLC

Sep 4 - After failing to breach 165, the Cromford® Market Index has drifted slowly lower during July and August.

However, the downward momentum has increase since mid-August and the advantage that sellers have had over buyers is beginning to disintegrate.

When the 30-year fixed mortgage rate stays above 7%, demand for re-sale homes is so feeble that it is not even enough to eat up the small number of new listings that appear each week. Available supply is starting to grow.

At 155, the CMI still has a long way to fall before we arrive at a balanced market around 110. However each day it moves lower strengthens the bargaining power of active buyers who are in a position to afford a home.

©2023 Cromford Associat LLC

Aug 31 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

This week we have 4 cities that moved in a direction favorable to sellers, up from 2 last week. Paradise Valley and Tempe are the new members of the green team.

Even so, the trend downwards is slightly stronger than last week. The average CMI change in these 17 cities over the last month was -2.9%, more negative than last week when we measured -2.7%.

Buckeye is moving higher and has Surprise in its sights. Cave Creek is bouncing back hard, having been one of the earliest to decline several months ago.

Most negative again is Fountain Hills, a former number one. However it remains a seller's market with a CMI over 190. 16 out of 17 are sellers markets with Queen Creek in the balanced zone.

Chandler is also declining fast although it remains out in front by a long way.

©2023 Cromford Associat LLC

Aug 26 - When buyers are actively looking for homes their main source of information about home prices are the list prices for homes they see listed for sale. All the other data is historic, based on what someone agreed to pay weeks or even months ago. Here is what they see when they look at the ARMLS active listings:

First of all, they notice that the average price per square foot is higher in week 34 of 2023 than in week 34 of all the years back to 2015. They can also see that every year has been higher than the one before for week 34. The weak pricing triggered in 2Q 2022 by a sudden jump in mortgage rates has had only a temporary effect and now looks to be of only minor lasting significance.

The current average $/SF for all active listings is $350.27. This an average across all areas within the ARMLS database and all dwelling types. Because this is a very large sample, the chart is very well-behaved and shows us that:

  1. The long-term trend has been higher for the last 8 years, with 2023 some 91% higher than 2015.
  2. The summer is is a seasonally weak period, each year showing a decline from May to August, except for 2020 which was bouncing back from the severe COVID scare that occurred in March and April that year. The weakness in 3Q 2023 is similar to 3Q 2015 through 2018, relatively normal and uneventful years.
  3. Today we see active list pricing 8.7%.higher than we did this time last year. This is a larger increase than the 6.0% we measured at the same time last year.
  4. There was an unusually large and rapid fall between May and August last year on top of the seasonal weakness. This was heavily influenced by the pricing actions of the iBuyers who realized too late that they had continued buying even while the market was cooling, resulting in them having far too much inventory by June 2022. They had a fire-sale of this inventory in the second half of 2022 in order to rid themselves of that exposure.

One key problem is that the reality represented above is completely unlike the false narratives peddled by several sensationalist and misguided pundits on YouTube and other social networks and even those more sober and serious analysts that were working for Goldman Sachs in January. If buyers have been reading or watching this stuff, they may enter the market with preconceived notions that are very wide of the mark..

Buyers expecting lower prices are going to be sorely disappointed, especially when the real prices are coupled with the latest 30-year mortgage rates around 7.4%. This is another reason why demand is so persistently weak this year. Simplistic observers believe weak demand translates to weaker prices. Nope. It translates to weak sales. But for prices, supply is just as important and remains drastically below normal, even though it has risen slightly over the past few weeks. Rising slightly will make little difference. We would need supply to almost double for the market to achieve balance.

©2023 Cromford Associat LLC

Aug 24 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

We have only 2 cities that moved in a direction favorable to sellers, down from 3 last week. Gilbert defected to the red camp again.

Even so, the trend downwards is slowing down. The average CMI change in these 17 cities over the last month was -2.7%, less negative than last week when we measured -3.3%.

Buckeye is still bucking the trend and has overtaken Goodyear as predicted. Cave Creek is also bouncing back hard, having been one the earliest to decline several months ago.

Again most negative is Fountain Hills, a former superstar and number one. However it remains a seller's market with a CMI over 190. 16 out of 17 are sellers markets with Queen Creek in the balanced zone.

©2023 Cromford Associat LLC

Aug 21 - You may remember our observation from Jan 25, when we accused Goldman Sachs of making "all kinds of weird and unlikely forecasts." This included a prediction that Phoenix home prices would decline by 25% in 2023.

Well it appears they have now admitted their forecasts were way off and have changed their outlook. They no longer expect US home prices to decline in 2023. They are predicting a small increase of 1.8% for the year.

Here is the chart from Tina which rubs it in a bit

To be brutally frank, there is little evidence that Goldman Sachs has any idea what it is talking about when it comes to the US housing market. Maybe this is why they are considering selling their investment-advisory business.

©2023 Cromford Associat LLC

Aug 17 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

After two and a half months of a deteriorating trend, this table is starting to move in the opposite direction again. We have 3 cities that moved in a direction favorable to sellers, up from 2 last week.

Gilbert is the latest recruit to the green camp.

The average CMI change in these 17 cities over the last month was -3.3%, less negative than last week when we measured -5.0%.

Buckeye is bucking the trend and has overtaken Goodyear as predicted. Cave Creek is bouncing back having been one the earliest to decline several months ago.

Most negative is Fountain Hills, a former superstar and number one. However it remains a strong seller's market with a CMI over 200. 15 out of 17 are sellers markets with Maricopa and Queen Creek in the balanced zone.

©2023 Cromford Associat LLC

Aug 15 - The Mortgage Bankers Association (MBA) has just reported that the mortgage delinquency rate has fallen to its lowest level since they started tracking this metric in 1980. The seasonally-adjusted delinquency rate for 1 to 4 unit residential properties stood at 3.37% in the second quarter of 2023, down from 3.64% one year earlier. It was also down from 3.56% in 1Q 2023. Delinquencies fell from 1Q 2023 across all mortgage types, conventional, VA and FHA. However FHA loan delinquencies were up 10 basis points from the second quarter of 2022.

Holders of FHA loans tends to be the first to weaken when the economic going gets rough.

Delinquencies are moving up in other loan types however - particularly credit card debt and car loans.

©2023 Cromford Associat LLC

Aug 14 - When publishing the latest table ranking the top 40 cities by annual average price per sq. ft. it struck me how differently the top tier has behaved compared with the bottom tier. This is probably because the luxury market is unaffected by the activities of iBuyers and large scale institutional investors in residential property. Since they were not active over $1 million, the collapse in their buying has had no effect on the high-end market.

Here are the top 5 cities based on annual inflation, measured using the annual average $/SF:

  1. Paradise Valley +13.7%
  2. Carefree +8.4%
  3. Coolidge +6.2%
  4. New River +4.8%
  5. Fountain Hills +4.5%

While at the other end we find:

  1. Arizona City -5.3%
  2. Florence -3.8%
  3. Litchfield Park -3.8%
  4. Sun City West -3.6%
  5. El Mirage -3.5%

The outer fringes have been very mixed with Arizona City and Florence doing poorly while Coolidge has caught up with the rest of the pack while remaining the least expensive place to buy a home in Central Arizona. New River is also a star performer.

The high-end has been more consistent, with Scottsdale just missing out on a top 5 finish with +3.1%, while Carefree and Paradise Valley are way ahead of the rest of the valley.

©2023 Cromford Associat LLC

Aug 12 - I wonder how many people twelve months ago were expecting the average sales price per square foot to be essentially unchanged a year later. Most observers, and especially the iBuyers, were in abject despair after the quick price decline that occurred between June and August 2022.

To be pedantic, we are actually 20 cents lower today than a year ago, but in the last 12 months the average $/SF dropped as low as $264.17 in the second week of 2023, only to recover by almost 8% in the 7 months since then.

An 8% rise when demand is far below normal reminds us of the important effect of the chronic lack of supply in our housing market.

The average $/SF is up almost 48% from the same point in 2020. It is not a bubble, so it is not bursting.

©2023 Cromford Associat LLC

Aug 10 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

Over the last month the market has moved slowly and slightly in a direction favorable to buyers, but this has made precious little difference. We are still in a seller's market in 15 of 17 cities and in a balanced market in Maricopa and Queen Creek.

The average CMI change in these 17 cities over the last month was -5.0%, less negative than last week when we measured -6.0%.

Only 2 cities continue to show a positive change from this time last month, Buckeye and Cave Creek. Buckeye continues to improve for sellers and has overtaken Maricopa. Now it is taking aim at Goodyear.

©2023 Cromford Associat LLC

Aug 8 - The residential re-sale market has changed very little over the past 2 months, but other parts of the real estate market are seeing more significant changes.

The office sector within commercial real-estate is severely challenged by declining demand. People seem to like working-from-home. The supply of office space exceeds supply by a clear margin and so asset values are dropping. This is a worldwide phenomena and is especially true of offices in less than perfect condition or in less than ideal locations. The market conditions mean lenders are becoming increasingly reluctant to take them as security for loans and owners with the need to refinance in the next 2 years are going to have a hard time. One obvious casualty is WeWork, which was once valued at $47 billion and now says there is substantial doubt that it can continue as a going concern.

The short-term rental market appears to have peaked in a number of over-supplied locations. This is leading to ludicrous prophecies by a few deranged real estate gurus that a huge flood of former short-term rental homes will hit the market in the near future. So many owners joined the Airbnb party that there are sometimes far more short-term rental properties than there are people wanting to rent them. This means lower occupancy and price competition, making ownership of a short-term rental much less attractive than it was a couple of years ago. Over the last 2 years average occupancy is reported to have dropped from 60% to 56%. This is a negative trend but hardly of catastrophic proportions.

Some owners are considering converting to long-term rentals instead. The theoretical advantages are higher occupancy and greater peace of mind but the main disadvantage is a relatively low gross income compared with the owner's original expectations. We are seeing plenty of new higher-priced rental listings in the Northeast Valley, some being furnished and probably former short-term rentals. The number of potential tenants for these is limited, because of the relatively high rent.

There is currently no great shortage of potential tenants at the affordable end below $2,000 a month. However if people can afford a rent over $4000 a month, then they are usually of a mind to buy a home. The exceptions would be those who expect to be renting for only a year or two. This includes students sharing a home and recent graduate who expect to move soon for their career advancement. Settled families with children in school are unlikely to want a high-price rental unless they are in a secure high-paying job. And in those circumstances, a mortgage should be easy to obtain.

As a result we have already seen weakness in the rental rate per square foot for homes over $2,500 per month in Scottsdale. $1.89 was the July average, The peak was $2.16 in February 2022.

We currently have 49.8% more active rental listings than we did 12 months ago. About 800 of them are in Scottsdale and their average asking rent is $4,380. This time last year there were only 517 with an average rent of $4,290. The average is going up because those with a higher rent are staying active longer, not because rents are increasing.

©2023 Cromford Associat LLC

Aug 6 - The annual sales rate is a useful tool to measure the amount of activity in the market. The monthly sales rate is not so good for a number of reasons:

  • it is subject to significant seasonal variation - April is much busier than January, for example
  • it is subject to having anywhere from 18 to 23 working days, which means a long month will have far higher sales than a short month, even if the market is unchanged.
  • it is subject to large fluctuations month to month just because of the small sample size

The annual sales rate avoids all three of these problems

  • it uses data from all days of the year, so there is no seasonal effect at all
  • it uses data from 365 days, a constant number except for a leap year, when the variation is just 1 day in 366.
  • it is a steady reliable number with minimal meaningless fluctuations in the count reported, thanks to the large sample size

The annual sales rate for all areas and types is currently 73,800. This is a low number, down from 102,822 a year ago. It is also still showing a slow decline, having been 74,148 this time last month. However the decline month to month is now very small (0.5%) and there is no longer much downward momentum.

In these circumstances, we can expect a few sub-markets to be showing some annual sales growth on a month to month basis. Looking at the single-family market by ZIP code, we find the following:

  • 60 out of 148 ZIP codes are showing higher annual sales compared with a month ago.
  • The best growth is in:
    • Fort McDowell 85264
    • Carefree 85377
    • Scottsdale 85250
    • Surprise 85387
    • Glendale 85305
    • Waddell 85355
    • Rio Verde 85263
    • Glendale 85307
    • Chandler 85224
    • Scottsdale 85262
  • The following are showing the worst declines month to month:
    • Stanfield 85172
    • Gila Bend 85337
    • Morristown 85342
    • Phoenix 85009
    • Casa Grande 85193
    • Arlington 85322
    • Peoria 85381
    • Phoenix 85035
    • Tempe 85284
    • Phoenix 85043

©2023 Cromford Associat LLC

Aug 4 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The market continues to slowly lose steam and the average CMI change in these 17 cities over the last month was -6.0%, just a shade more negative than last week when we measured -5.9%

Only 4 cities continue to show a positive change from this time last month, while 1 is unchanged and 12 show a negative trend for sellers, particularly Tempe, Fountain Hills, Avondale, Glendale and Peoria.

Buckeye is the only city improving a lot for sellers and has overtaken Maricopa which slips into 16th.

Queen Creek has dropped into the balanced zone below 110, while the other 16 are seller's markets.

©2023 Cromford Associat LLC

Aug 3 - The Maricopa County affidavits of value have been counted and show us the following numbers for July 2023:

  • There were 6,081 closed transactions with a median sales price of $464,990
  • Closings were down 15% from July 2022, and down 20% from June 2023
  • The median sales price was down 2.1% from a year ago and down 1.3% from last month
  • The median sales price has fallen for the first time since January and is now up 5.7% from the low point of January 2023.
  • New home closings totaled 1,352 with a median sales price of $533,592, an all-time record high price
  • The new home closed sales count was up 7.6% from July 2022 but down 18.4% from June 2023.
  • The new home median sales price is up 3.2% from a year ago, and up 2.8% from last month
  • The re-sale transaction count was 4,729 with a median sales price of $445,000.
  • The re-sale count was down 20% from July 2022 and down 21% from June 2023.
  • The re-sale median sales price was down 4.1% from last year and down 0.5% from last month

Closed transaction counts remain very weak for re-sales, with both supply and demand in poor shape. Closing counts were much stronger in the new home market, up almost 8% from this time last year. Pricing was also higher for new builds than a year ago. Resale pricing paused in July but still looks likely to overtake last year's pricing during the next three months.

©2023 Cromford Associat LLC

Aug 1 - The chart below is extracted from the Cromford® Public section of the site and includes all recorded deeds in Maricopa and Pinal counties for single-family and condo / townhouse properties up to the end of June 2023



What jumps out at you is that the average price recorded at closing is now higher at $580,373 than at any time in the past. The correction over the last 12 months is now complete.

At the same time the average size of homes closed has increased, so the same chart for average $/SF has not accomplished a complete recovery of the ground lost since mid-2022.

We should also point out that new homes made a big contribution to the health of this chart. If we only count re-sale transactions, then the full recovery is not yet achieved.

©2023 Cromford Associat LLC