Arizona Real Estate News

 

April 26, 2024

Arizona real estate market update | April 2024

Greetings, 
I wanted to take a quick look at the market and provide a market update for your review. 
Let's jump in. 
"The first quarter housing numbers are in the books and the hoped-for increase in transactional sales volume has not come to fruition. Housing demand, as reported by ARMLS, for Q1 was down approximately 5% year over year. With pesky inflation holding ground, the hope that the Federal Reserve would implement three rate cuts this year is dimming. With mortgage rates in the 7% range, we expect Q2’s upcoming sales volume to remain challenged, with total sales volume remaining lower year over year, most likely seeing year-over-year declines in the 5-7% range. While three months is too soon to judge our 2024 housing market
Sales price has risen 6.69% year over year. This is a nice rebound from the start of the year. 
March 2024 Housing Numbers • The Cromford Index is currently reporting 111.6, a modest nod towards sellers. • In the first quarter, demand was approximately 5% lower year over year. • In February and March, in terms of sales per day, there were 15 fewer sales per day this year compared to last.  • Demand is down approximately 26.02% from the first quarter of 2020. (pre-COVID) • Sales volume for Q1 2024 is down 31.61% from Q1 2021. (COVID buying frenzy) • The median sales price is 5.65% higher year over year, home prices are stable. • As reported by Freddie Mac, the 30-year FRM averaged 6.88%as of April 11, 2024. • The 30-year FRM is up .06% from last week and .61% year over year. • Historically, ARMLS reports the highest yearly total for accepted contracts in the 30day window between late March and late April. • Late March and April’s contracts become May and June’s closings.   The market hit its lowest point in terms of prices in January 2023. Since then, prices have stabilized and are rising. As reported earlier, the current median sales price is $445,000, with foreclosure activity practically nil. "

sales price.png

Days on market has fallen a whopping 12% year over year. 
days on market .png
New list price is up 6.5% year over year. 
newlist price.png
Absorption rate measures the the rate at which homes sell in a given area. It is calculated by taking the number of homes sold in a month and dividing it by the number of homes on the market. Generally speaking an absorption rate greater than 20% represents a sellers market. 
absorbtion rate and months supply.png
Active listings are up 22% from this time last year. Still well below a normal market, which would carry around 25/k active listings.
active listings.png
Sold listings are  down 12% year over year. 
sold listings.png
thank you,
Posted in Market
Jan. 31, 2024

Arizona real estate market update | January 2024

Let's start with sales volume:
Year over year sales volume is down a whopping 37.3%. Month over month 14.4%. This is primarily due to higher interest rates in combination with higher home values given the run up over the past 3 years. 
salesvolume.png
Let's look at total inventory: 
Year over year inventory is up an astounding 114.8% while decreasing 1.6% for the month over month. Inventory still sits at about half of where we should be in a "normal" market. 

total inventory .png

Let's look at sales price:
The year over year median sales price is down 5.7% 
and the average sales price is down 4.5%
sales price.png
Lets check on distressed sales:
They re up 56.9% year over year and monthly over month 8.3%- this will be an important number to watch as we move through the rest of 2024. 
Keep in mind this is still approximately 24/k less than the market burst of 2008-2010 where we saw about half of all listings as REO or short sale. We had approximately 50/k listings at the peak of the housing crisis. 
distressed sales.png
 
Looking at the time it takes to sell a home we are up 43 days year over year and 9 days month over month. 
average days on market .png
Let's look at how interest rates affect demand:
rates and demand.png
Commentary:
January by the Numbers With mortgage rates hovering around 7% from mid-October through mid-November, January’s extremely low sales volume came as no surprise. The 4,265 home sales, as reported by ARMLS, were the second lowest sales total for January in the last 20 years, as only 2008 reported fewer sales. January sales were down 37.3% year over year, while the median sales price was down 5.7% year over year but only down 0.5% month over month. Today, mortgage rates have fallen nearly a full point from their peak. On Nov. 10, the 30-year fixed rate was 7.08%. The current 30-year fixed rate, as reported by Freddie Mac, is 6.12%. According to Freddie Mac research, this one percentage point reduction in rates could allow as many as three million more mortgage-ready consumers to qualify and afford a $400,000 loan. Volumes are still well below normal, but they are recovering nicely and promise better times when the Spring buying season gets fully underway. Clearly, buyers now have a lot more enthusiasm than they did in December. Our local housing market has experienced several wardrobe changes over the past year. The primary catalyst for these changes has been mortgage rates. It would be great for mortgage rates to find their happy space and for the market to settle. There are some signals this may be occurring. In the meantime, if rates go up, sales volume will go down. If rates come down, sales will go up. 
Read the full report here: 
Thank you very much and please reach out to me with any real estate related needs or just to say hello!
I love hearing from you all! 
Best regards 
Posted in Market
March 24, 2023

Arizona real estate market update | March 2023 | Consolidation is the theme

Market update March 2023 #EricWilliamsonRealtor 602.435.6708  

Overall the market is stable, low inventory but low buyer demand have created a consolidation zone for home prices. 
I hope you enjoy the information and please let me know if you have any questions. 

Posted in Market
Oct. 25, 2022

Arizona real estate market update | October 2022 | Markets move in waves

I hope you enjoy the information and please let me know if you have any questions. 

Kind regards. 🏡

Highlights below | October 2022

 

Monthly Sales: 

The big takeaway here is sales are down about 30% year over year. 

New inventory:

New listings have slowed at a record place (already trending into December's number of listings taken- traditionally our slowest month) this is a good thing for sellers - more listings would lead to further price declines. 

The bigger story is that new listings are up about 93% year over year. 

Monthly median sales price: 

We are seeing about an 8-10% price reduction in sales price over the last few weeks from the "peak" 

Active listings:

21,219 as of this morning, keep in mind at our market "peak" there were about 4000 active listings. 

Listings Under contract: 

This is an interesting one because we are seeing a big drop in homes under contract vs last 3 years. 

 

Contract ratio:

This ratio is a rough measure of a market's "overall health."

For every 100 homes that are "active listings" divided by the number of homes that are pending or under contract and moving towards COE. 

At our market "peak" we had about 258 homes pending for every 100 for sale. Now we have around 32 homes pending for every 100 for sale. 

The good news is we are still up on appreciation year over year... 

 

Posted in Market
March 23, 2022

Arizona real estate market update | February 2022, the highest median price, average price, and price per square foot on record!

This year, February 2022, reported the highest median price, average price, and price per square foot on record, up year-over-year 28.5%, 22.5% and 27.21%, respectively. ARMLS reported a staggering $7,876,294,827 in gross dollar volume, currently 19.1% ahead of last year’s pace. 
Average new list prices are up +24.5% year-overyear. The yearover-year median is up +25.3%. &    The average sales price is up +22.5% year-over-year while the yearover-year median sales price is also up +28.5%.
Monthly sales-
Sales are up +11.1% month-over-month. The year-over-year comparison is down -1.3%.  
New inventory has a month-overmonth decrease of -0.6% while the year-overyear comparison decreased by -1.2%.  
Total inventory has a month-overmonth decrease of -1.3% while yearover-year reflects a decrease of -1.7%.  
Cash investors continue to drive demand and pricing, public records data tells us our market is being driven by non-primary buyers purchasing with cash. Non-primary buyers accounted for 36% of all home purchases in February, while 29.2% were cash.
The Absorption Rate is Up Month Over Month and Comparable Year Over Year The term absorption rate refers to a metric used in the real estate market to evaluate the rate at which available homes are sold in a specific market during a given time. It is calculated by dividing the number of homes sold in the allotted time by the number of available homes. Historically, an absorption rate of 20 would be considered a balanced market. Today our absorption rate stands at 191.51. Last February, the reading was 193.06. While the pending price data confirms rising prices, the absorption rate table explains why prices are rising.   
Since the beginning of last year, institutional buyers have acquired, through purchases and building, over 9,000 homes. Most of these purchases are SFR in the $250,000 to $500,000 price range. Their model, buy/build, hold, and rent.
Although the re-sale and new homes markets continue to show very little sign of weakness, the same cannot be said of the rental market. The vast majority of rentals do not hit the MLS, so we have to be careful because of the poor sample size. However, the ARMLS rentals database shows us that the market is nowhere near as favorable to landlords as it was this time last year. Here is why we say that: • Available supply is up from 1,543 to 2,138 units, a rise of 39%, meaning tenants are getting more choice • New rental listings are up 20% year to date compared with 2021, so supply is arriving faster • New rental listings are up 26% over the past 4 weeks, compared with 2021, telling us that the increased supply trend is strengthening • The average lease list price per sq. ft. is $1.80, down from $1.93 this time last year • The average lease list price per sq. ft. peaked at $2.01 on May 22, 2021, fell back then peaked again at $2.00 on Jul 29 before falling again - it is unable to convincingly break the $2 resistance level and has made no attempt to do so in the last 7 months These conditions suggest that the era of quickly rising rents in Greater Phoenix may be coming to an end. A large amount of new rental supply is coming on board this year, judging by the number of multi-family permits issued in the last 2 years. Rent looks likely to stay fairly flat, which will change the buy versus rent equation as home prices and mortgage rates continue to increase. In the longer term, this could seriously dampen demand for homes to buy. Interestingly, the supply of active listings varies a lot by dwelling type. • Apartments to rent are down 33% • Townhouses to rent are up just 1% • Single-family detached homes to rent are up 99% - there are 1,546 versus only 777 this time last year .
US birth rates are very low by historic standards and with the baby boomers reaching advanced ages, we can expect natural growth in the population to be small, or even negative. Population growth will be entirely dependent on incoming transfers from other states or foreign countries. Ivy Zelman has been bearish on the housing market for a couple of years, primarily because of these demographic trends. She has been completely wrong about the market so far, but she is right that the demographics are fundamentally unfavorable for housing in the longer term. In Arizona we are atypical in that so many people have been moving here. This hides the weak natural growth in population (births minus deaths) and has driven our prices up faster than almost any other part of the USA. This will not last forever. In Arizona, we have a history of building more and more homes until there is a very obvious reason to stop. There will come a time, and nobody knows exactly when it will be, when we have built enough shelter for the population and demand sinks below supply. It seems likely that we will see that in rentals before we see it in homes for purchase.  
As always very best regards and please let me know if I can help with your real estate goals in any way! 
#EricWilliamsonRealtor
6024356708
** quotes from ARMLS STAT
Posted in Market
Feb. 1, 2022

Market update January 2022 | Rinse repeat and appreciate!

This housing market in sunny AZ 🌵 continues to 🏠🔥 stay on fire! 
Key takeaways:
*ARMLS reported the highest sales volume of any January in our history. The 7,076 home sales this January eclipsed the prior January record for ARMLS sales by 6.69%. There were 6,632 sales reported by ARMLS in January 200
*Highest average sales price ever ($439,620) and you arrive at an astounding gross dollar volume of $3.11 billion dollars, an annual increase of 35%. It should also be noted that on a historical basis, January is the slowest month of the year for sales, making January activity that much more impressive. There were two fewer days to conduct business than last year. 
*Last year we discussed falling interest rates, falling inventories, higher sales volume and rising prices. We described our market as a full-blown sellers’ market with the added caveat, “Anyone waiting for prices to fall, well, they’ll be waiting.” Now jump forward to January 2021. The current interest rate for a 30-year fixed-rate mortgage is now 2.73% compared to 3.47% one year ago. Year-over-year, active listings are down 58%, sales volume is up 11.8% and the median sales price is up 17.28%. And now we are entering our traditional buying season. We are now facing a “full-blown sellers’ market” on steroids.
*ARMLS active listings by dwelling type and tracks their descent over the past 24 months. In February 2019 ARMLS was reporting only 18,131 total active listings, which was 37% below what we would define as a typical market. At the time of this report, ARMLS is reporting only 4,488 active listings without a contract. To place this number in a historical perspective, current listings are 84% below what would be considered a typical market. The inventory for manufactured/mobile homes has shown little change over the past two years, while detached single-family listings have declined over 78%. 
*The January reported median was $340,000. For the ninth straight month our mathematical model slightly underestimated our reported median sales price. Looking ahead to February, the ARMLS Pending Price Index is projecting a median sales price of $345,000. 
*We began February with 6,714 pending contracts, 4,256 UCB listings and 347 CCBS giving us a total of 11,317 residential listings practically under contract. This compares to 10,693 of the same type of listings one year ago. At the beginning of February, the pending contracts were 5.84% higher than last year. There were 19 business days in February of 2020 and 19 this year. ARMLS reported 7,279 sales in February of 2020. We should see yearover-year sales gains this February. The highest sales volume ever in February occurred in 2005 when ARMLS reported 7,781 home sales. The February sales volume should approach or possibly even exceed the volume in 2005.  
Posted in Market
Sept. 29, 2021

September 2021 Residential Real Estate Market Update.

We are still in the best sellers market EVER. Even though things have cooled off slightly from the activity we saw in March 2021, you can still sell your home for the absolute top dollar with all the ease and convenience possible. 

They say that markets trade on momentum, well it is pretty clear we still have momentum towards a continued strong sellers market.... 

 

Here are some market updates and highlights:

 

Sales are down -9.8% month-over month. The year over-year comparison is down -15.4%.  

 

Pricing:

For nearly 2.5 months the median sales price has been right around $400,000. The monthly mortgage payment for the median house is $1,859. Up nearly 23% from November 2020 when it was $1,518.

 

There is even less relief for renters. To rent the same median property, renters are now spending $2,195 a month.

 

Affordability:

As many suspected, affordability declined in Q2 2021 and the US as a whole and Greater Phoenix fell below the ideal affordable range of 60-75 for the first time since late 2018. Through Q2 2021 in Greater Phoenix a household earning the median income ($79,000 annually), can afford 56.4% of what is for sale. A year ago, it was 70%.

 

The low interest rates have worked in our favor for a long time. When rates increased up to 5% at the end of 2018, we dipped below the ideal affordability range and demand declined. When affordability drops below 60, we begin to see demand resistance.

 

iBuyers:

The affordability trends will impact corporate investors and iBuyers. Demand declines when things are not affordable, and it can shift quickly. In 2005 affordability went from 75 to 27. If not enough people can afford what is on the market, properties will sit for longer and price reductions increase.

 

iBuyer acquisitions are up 573%, their inventory is up 544%, and their sales are up 93% year over year. Both Opendoor and Zillow had their largest acquisition month ever in July. Offerpad is not as aggressive as the others (which could be why Offerpad was profitable for the first time ever in Q2 2021 and both Opendoor and Zillow Homes lost money).

 

iBuyer offers are excessively high, sometimes bidding against their own offers. According to a recent report from Mike DelPrete, Opendoor paid 7.7% above market value on its acquisitions in Q2 2021 nationally. Tina mentioned instances of offers over $75,000 above market value. Other people’s money is very easy to spend.

 

A year ago, owner occupants drove the housing market. People were buying houses to live in. Today much of the demand is led by iBuyers and investors, both large and small. Since June 23% of Opendoor’s sales, 19% of Zillow’s sales, and 11% of Offerpad’s sales have gone to corporate investors.

 

Over inflating values and creating false demand is extremely unhealthy for a market. This is not what the market is supposed to do. The iBuyers will either have to wait for the market to catch up or sell for a loss. The 3.1% monthly appreciation rate from the spring has slowed and is expected to slow further, likely down to 0.5% or 1% a month by the end of the year.

 

Forbearance:

Forbearance numbers are only available on a national level and continue to improve. As of Monday, there are about 1.6 million borrowers in a forbearance plan, a huge decline from the over 8 million in a plan last May.

 

The majority of borrowers exiting forbearance are staying in their home, no flood of foreclosures coming. Estimates could go as high as about 20% of borrowers will need to sell at the end of their forbearance plan. 20% of 1.6 million is 320,000. If we divide that by the 50 states, then each state (if divided evenly) would see about 6,400 foreclosures.

 

 

Supply: 

Over the past 10 years our population grew by 20% and total inventory grew by 11%. We have more demand than we have houses.

 

Single family permits are up 39.7%. And builders are struggling to keep up with the demand due to supply chain shortages and labor shortages. It is now taking 10-14 months to build a house.

 

 

Supply stopped dropping in February. It is up 61% since February and up 44.3% since May. There was an initial shift in February and then a bigger shift in May as prices continued rising.

 

Supply Increases by Price:

  • $300K - $400K up 62.4% since February and up 47.6% since May
  • $400K - $500K up 187% since February and up 99.7% since May
  • $500K - $600K up 171% since March and up 76.9% since May
  • $600K - $800K up 149% since February and up 64.5% since May
  • $800K - $1M up 100% since February and up 38.5% since June
  • $1M - $1.5M up 50.9% since February
  • $2M - $3M down 5.3% since March
  • $3M+ is up 2.1% since March

 

 

 

 

Demand:

We have been hanging around normal demand for the past few months. Then last week demand increased. Where did that come from? Investors? iBuyers? The increased demand will keep us in a seller’s market longer. Increased supply decreases the strength of the seller’s market and increased demand increases the strength of a seller’s market.

 

ibuyers have no effect on supply since they buy and sell. They impact demand. Show an extra transaction which can inflate demand metrics because they never have an occupant in the property.

 

2019 had slightly above normal demand. Today there are 6.2% more listings under contract than in 2019 but 12.9% lower than in at this time last year.

 

Typically demand decreases in Q3 and Q4. We should see inventory gains and fewer buyers. Many listings will likely be over-priced, and buyers will not pay over asking when they have a lot of options.

 

We are still having a record year for luxury, amazingly high demand remains, usually this late in the year, luxury slows down as owners pull their unsold properties off the market by about June.

 

Cromford Market Index (CMI):

The best tool for predicting future price appreciation trends and is available on the main page of the Cromford Report: https://cromfordreport.com/ (without a subscription)

 

 

 

  • 100 is balanced and prices rise at the rate of inflation (currently 5.4%), below 100 is a buyer’s market, above 100 is a seller’s market, prices drop below 90, prices rise at 110. 2014 was a balanced market.
  • On 3/20/2020 we were at 241
  • On 5/15/2020 we were at 145.2
  • Yesterday we were at 349.7
  • We peaked on 3/14/2021 at 514.9
  • Prior to this run, the previous peak was 312.9 in the spring of 2005.
  • CMI is the predictor, it moves first and then appreciation follows. Cannot predict the CMI. It tells us where we are.

 

When the CMI weakens we see other weakening follow, like sales prices, appreciation, over asking, etc. We are now averaging a decline of 29.3 points over 30 days. Previously it was dropping 50 points over 30 days. It is slowing due to the increased demand.

 

While the CMI will probably not move in a straight line, we are moving towards a weaker seller’s market. Tina expects we may level out around 200-240. It will feel like a buyer’s market but it won’t be. Likely will get to the 2019 numbers.

 

As the seller’s market weakens, people will get very nervous about a market crash and declining property values. Remember demand needs to be lower than supply for prices to drop. With supply 69% below normal and demand nearly 9% above normal, it will take a long time for demand to be lower than supply. Before the 2008 crash there were 57,000 active listings. Today there are fewer than 7,100 active listings.

 

Using 4 week averages and tons of past data, we can draw a trendline from the CMI, illustrating when we might reach a balanced market. No reason to believe that this will stay in a basic trendline. It will adjust and probably stay in the 200-240 range. It is only what we know today. Since each city is so different, it is best to check each one weekly. To show the variation between cities, these are the timelines in which they could reach balance: estimated --- 

 

  • Phoenix 7.3 months
  • Chandler 3.6 months
  • Glendale 3.8 months
  • Mesa 5.8 months
  • Gilbert 5.6 months

 

 

Appreciation:

CMI moves first and then appreciation follows, usually about 3-6 months later. In a seller’s market the rate of appreciation is higher than the rate of inflation. The luxury market is pushing appreciation rates up even higher.

  

Appreciation rates are slowing. It has gone from a year over year increase of 39.3% in May to 28.4% in August.

 

 

 

Full Cromford report

 

Posted in Market
Aug. 25, 2021

August 2021Residential Real Estate Market Update.

We are still in the best sellers market EVER. Even though things have cooled off slightly from the activity we saw in March 2021, you can still sell your home for the absolute top dollar with all the ease and convenience possible. 

They say that markets trade on momentum, well it is pretty clear we still have momentum towards a continued strong sellers market.... 

 

Here are some market updates and highlights:

 

Sales are down -9.8% month-over month. The year over-year comparison is down -15.4%.  

1.PNG

  
New inventory has a month-over month increase of +0.03% while the year-over year comparison increased by +3.4%.  

 

2.PNG
  
Total inventory has a month-over month increase of +6.7% while year over-year reflects a decrease of -17.0%.  

3.PNG
  Months supply of inventory for June was 1.05 with July at 1.24.  
4.PNG
  Average new list prices are up +24.0% year-overyear. The yearover-year median is up +26.2%.  
5.PNG
The average sales price is up +27.3% year-over-year while the year over-year median sales price is also up +28.6%.  
6.PNG

 

 

Pricing:

For nearly 2.5 months the median sales price has been right around $400,000. The monthly mortgage payment for the median house is $1,859. Up nearly 23% from November 2020 when it was $1,518.

 

There is even less relief for renters. To rent the same median property, renters are now spending $2,195 a month.

 

 

 

 

Affordability:

As many suspected, affordability declined in Q2 2021 and the US as a whole and Greater Phoenix fell below the ideal affordable range of 60-75 for the first time since late 2018. Through Q2 2021 in Greater Phoenix a household earning the median income ($79,000 annually), can afford 56.4% of what is for sale. A year ago, it was 70%.

 

The low interest rates have worked in our favor for a long time. When rates increased up to 5% at the end of 2018, we dipped below the ideal affordability range and demand declined. When affordability drops below 60, we begin to see demand resistance.

 

 

iBuyers:

The affordability trends will impact corporate investors and iBuyers. Demand declines when things are not affordable, and it can shift quickly. In 2005 affordability went from 75 to 27. If not enough people can afford what is on the market, properties will sit for longer and price reductions increase.

 

iBuyer acquisitions are up 573%, their inventory is up 544%, and their sales are up 93% year over year. Both Opendoor and Zillow had their largest acquisition month ever in July. Offerpad is not as aggressive as the others (which could be why Offerpad was profitable for the first time ever in Q2 2021 and both Opendoor and Zillow Homes lost money).

 

iBuyer offers are excessively high, sometimes bidding against their own offers. According to a recent report from Mike DelPrete, Opendoor paid 7.7% above market value on its acquisitions in Q2 2021 nationally. Tina mentioned instances of offers over $75,000 above market value. Other people’s money is very easy to spend.

 

A year ago, owner occupants drove the housing market. People were buying houses to live in. Today much of the demand is led by iBuyers and investors, both large and small. Since June 23% of Opendoor’s sales, 19% of Zillow’s sales, and 11% of Offerpad’s sales have gone to corporate investors.

 

Over inflating values and creating false demand is extremely unhealthy for a market. This is not what the market is supposed to do. The iBuyers will either have to wait for the market to catch up or sell for a loss. The 3.1% monthly appreciation rate from the spring has slowed and is expected to slow further, likely down to 0.5% or 1% a month by the end of the year.

 

 

 

Forbearance:

Forbearance numbers are only available on a national level and continue to improve. As of Monday, there are about 1.6 million borrowers in a forbearance plan, a huge decline from the over 8 million in a plan last May.

 

The majority of borrowers exiting forbearance are staying in their home, no flood of foreclosures coming. Estimates could go as high as about 20% of borrowers will need to sell at the end of their forbearance plan. 20% of 1.6 million is 320,000. If we divide that by the 50 states, then each state (if divided evenly) would see about 6,400 foreclosures.

 

 

Supply: 

Over the past 10 years our population grew by 20% and total inventory grew by 11%. We have more demand than we have houses.

 

Single family permits are up 39.7%. And builders are struggling to keep up with the demand due to supply chain shortages and labor shortages. It is now taking 10-14 months to build a house.

 


Supply stopped dropping in February. It is up 61% since February and up 44.3% since May. There was an initial shift in February and then a bigger shift in May as prices continued rising.

 

Supply Increases by Price:

  • $300K - $400K up 62.4% since February and up 47.6% since May
  • $400K - $500K up 187% since February and up 99.7% since May
  • $500K - $600K up 171% since March and up 76.9% since May
  • $600K - $800K up 149% since February and up 64.5% since May
  • $800K - $1M up 100% since February and up 38.5% since June
  • $1M - $1.5M up 50.9% since February
  • $2M - $3M down 5.3% since March
  • $3M+ is up 2.1% since March

 

 

 

 

Demand:

We have been hanging around normal demand for the past few months. Then last week demand increased. Where did that come from? Investors? iBuyers? The increased demand will keep us in a seller’s market longer. Increased supply decreases the strength of the seller’s market and increased demand increases the strength of a seller’s market.

 

ibuyers have no effect on supply since they buy and sell. They impact demand. Show an extra transaction which can inflate demand metrics because they never have an occupant in the property.

 

2019 had slightly above normal demand. Today there are 6.2% more listings under contract than in 2019 but 12.9% lower than in at this time last year.

 

Typically demand decreases in Q3 and Q4. We should see inventory gains and fewer buyers. Many listings will likely be over-priced, and buyers will not pay over asking when they have a lot of options.

 

We are still having a record year for luxury, amazingly high demand remains, usually this late in the year, luxury slows down as owners pull their unsold properties off the market by about June.

 

Cromford Market Index (CMI):

The best tool for predicting future price appreciation trends and is available on the main page of the Cromford Report: https://cromfordreport.com/ (without a subscription)

 


 

  • 100 is balanced and prices rise at the rate of inflation (currently 5.4%), below 100 is a buyer’s market, above 100 is a seller’s market, prices drop below 90, prices rise at 110. 2014 was a balanced market.
  • On 3/20/2020 we were at 241
  • On 5/15/2020 we were at 145.2
  • Yesterday we were at 349.7
  • We peaked on 3/14/2021 at 514.9
  • Prior to this run, the previous peak was 312.9 in the spring of 2005.
  • CMI is the predictor, it moves first and then appreciation follows. Cannot predict the CMI. It tells us where we are.

 

When the CMI weakens we see other weakening follow, like sales prices, appreciation, over asking, etc. We are now averaging a decline of 29.3 points over 30 days. Previously it was dropping 50 points over 30 days. It is slowing due to the increased demand.

 

While the CMI will probably not move in a straight line, we are moving towards a weaker seller’s market. Tina expects we may level out around 200-240. It will feel like a buyer’s market but it won’t be. Likely will get to the 2019 numbers.

 

As the seller’s market weakens, people will get very nervous about a market crash and declining property values. Remember demand needs to be lower than supply for prices to drop. With supply 69% below normal and demand nearly 9% above normal, it will take a long time for demand to be lower than supply. Before the 2008 crash there were 57,000 active listings. Today there are fewer than 7,100 active listings.

 

Using 4 week averages and tons of past data, we can draw a trendline from the CMI, illustrating when we might reach a balanced market. No reason to believe that this will stay in a basic trendline. It will adjust and probably stay in the 200-240 range. It is only what we know today. Since each city is so different, it is best to check each one weekly. To show the variation between cities, these are the timelines in which they could reach balance: estimated --- 

 

  • Phoenix 7.3 months
  • Chandler 3.6 months
  • Glendale 3.8 months
  • Mesa 5.8 months
  • Gilbert 5.6 months

 

 

 

Appreciation:

CMI moves first and then appreciation follows, usually about 3-6 months later. In a seller’s market the rate of appreciation is higher than the rate of inflation. The luxury market is pushing appreciation rates up even higher.

  

Appreciation rates are slowing. It has gone from a year over year increase of 39.3% in May to 28.4% in August.

 

 

I hope you all find this useful and please let me know if I can help you achieve your real estate destinations. 

Kind regards. 

 

Full Cromford report

 

Posted in Market
June 21, 2021

May 2021 Residential Real Estate Market Update

Some exciting news from Eric Williamson Realtor.
We have been busy selling homes ($7.4 million dollars in volume year to date) however I came across an opportunity to serve my clients in a much more efficient way, deliver better customer service to all my clients and increase my personal sales production by joining the Hague Partners at 72 sold- https://haguepartners.com | https://72sold.com/ . 
The model at Open Door is great for some people but after 6 months I decided it was not a good fit for me so I found a new home at the Hague Partners and I am"too the moon" 🌛 excited to be here! FYI they are the #1 brokerage per agent in sales volume and listings sold for 29 months in a row in the entire state of Arizona, what a winning team to be on! 📢
Also My daughter Hannah turned 1 - look at this baby, the love of my life!!!!
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Now into the good stuff- what is going on in the Arizona Real Estate Market! 
 
Arizona Housing Market update! 
This real estate market is great, there is not a crash coming so nothing to worry about. We are in a long term housing shortage nationally, so real estate values especially in our market in Arizona are going to be strong and continue to be a sound investment. 
  -Sales are down -3.7% month-overmonth. The yearover-year comparison is up +33.0%.  
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  - New inventory is down -7.1% month-overmonth while the year-over-year comparison increased by +10.4%.
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   - Months supply of inventory for April was 0.96 with May at 1.05.
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  -  The average sales price is up +43.2% year-over-year while the yearover-year median sales price is also up +32.2%.
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iBuyers and Institutional Buyers We currently have four iBuyers active in Maricopa County: Opendoor, Offerpad, Zillow and Redfin. The iBuyers have a buy and sell philosophy while the Institutional buyers have a buy, hold and rent strategy. In May iBuyers accounted for 3.72% of all purchases in Maricopa County while the Institutional buyers had a market share of 4.98%.   
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We are still in a strong sellers market but we have seen some small trends showing the market is cooling slightly. Last month the STAT mathematical model projected a median sales price for May of $386,500, which slightly underestimated the May reported median of $390,000. Looking ahead to June, the ARMLS Pending Price Index is projecting a median sales price of $400,000. When the June median sales price is reported we are projecting a year-over-year gain of 31.15%. We began June with 6,766 pending contracts, 4,077 UCB listings and 307 CCBS giving us a total of 11,150 residential listings practically under contract. This compares to 12,577 of the same type of listings one year ago. At the beginning of June, the pending contracts were 11.3% lower than last year. There were 22 business days in June of 2020 and 22 this year. ARMLS reported 9,508 sales in June of 2020. The highest sales volume ever in June occurred in 2011 when ARMLS reported 10,345 home sales. We will see where June numbers end up! 
I do want to let you all know I am always here to serve you in any way you need to help get you to your real estate destination and achieve your real estate goals! 
If ever I can be of service to you, family, friends or anyone looking to buy or sell please let me know and I value the opportunity to work with them and the referrals you send my way. 
Thank you. 
Eric Williamson
Realtor 
The Hague Partners 
Posted in Market
April 2, 2021

March 2021 Residential Real Estate Market Update

Wow is March over already? I just want to take a moment and say HOLLY SMOKES!!!!
I have never seen a hotter housing market than what we are in right now. Here are the numbers: 
An increase is forecasted in March for both average and median sales prices.  
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  New inventory is up +0.1% monthover-month while the year-overyear comparison decreased by -11.7%.   
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  . Average new list prices are up +14.1% year-overyear. The yearover-year median is up +14.3%.   The average sales price is up +22.3% year-over-year while the yearover-year median sales price is also up +18.6%.
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Sales are up +8.2% month-over-month. The year-over-year comparison is up +5.2%.  
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February reported the highest median price, average price and price per square foot on record, which is up year-over-year 18.6%, 22.3% and 21.0% respectively. ARMLS reported a staggering $6,612,744,621 in gross dollar volume, currently 32% ahead of the record pace of last year. When March numbers are reported these records will be broken again, and by the time June sales figures report, the current chatter will reach a roar. Our current market conditions are a direct result of extremely low supply, steady demand and historically low interest rates.   
Please let me know if you, a friend,  or a family member has any questions about buying or selling. 
I appreciate the opportunity to work with you and hope you all have a wonderful day! 
**** cited from armls STAT- https://armls.com/statistics
Posted in Market