Jan 12 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities *Cromford Demand Index™ is a value that provides a short-term forecast for the demand for resale homes in the market. It is derived from the trends in pending and sold listings compared with historical data over the previous four years. Values above 100 indicate more demand than usual, while values below 100 indicate less demand than usual. A value of 100 indicates the demand is close to normal.
This has been another week in which the balance in the market moved strongly in favor of sellers. The average change in the CMI over the past month is 22%, up from 21% last week.
Paradise Valley continues to improve for sellers at a rapid rate. Its supply index is down from 52.1 to 43.2 and its demand index is up from 57.6 to 73.2. So demand is still well below normal, but supply is below normal to a far greater degree. Surprisingly, the average $/SF in PV is already starting to rise, across active, under-contract, and even closed listings.
Also improving fast for sellers are Chandler, Mesa, Avondale - all up 39% or more for the last month. These are leading the charge.
Above 20%, we have Phoenix, Tempe and Glendale, while Peoria, Gilbert, Cave Creek, Queen Creek, Surprise, Fountain Hills and Buckeye are above 10%.
Scottsdale, Maricopa and Goodyear are below 10% but all improving, unlike last week when Goodyear was still going backward.
Remember that the Cromford® Market Index is the earliest of the leading indicators. It tends to go down before most people expect it to and it goes back up before people think it should. It can be up to a month before other market indicators follow suit. For example, last year it peaked on February 7 and started to weaken. During the bubble years, it reached an all-time low of 26.5 on November 6, 2007 and then rose very slowly over the following 2 years, not exceeding 100 until May 2009.
Among the 17 largest cities we see 6 currently in a buyer's market below 90, 4 balanced between 90 and 110, and 7 in a seller's market over 110.
Loan officers nationwide report that new mortgage applications are rising in volume. This could have something to do with the fact that typical 30-year fixed mortgage rates have dropped by 0.5% since the start of the year.
The time may soon come to replace skepticism with hope. Despair is so 2022, and no longer fashionable.
During the pandemic, second homes became popular because of the rise in work-from-home flexibility. That’s because owning a second home, especially in the luxury market, allowed those homeowners to spend more time in their favorite places or with different home features. Keep in mind, a luxury home isn’t only defined by price. In a recent article, Investopedia shares additional factors that push a home into this category: location, such as a home on the water or in a desirable city, and features, the things that make the home itself feel luxurious.
A recent report from the Institute for Luxury Home Marketing (ILHM) explains just how much remote work impacted the demand for second and luxury homes:
“The unprecedented ten-fold increase towards remote work since the pandemic is an historic development that will continue to fuel second home demand for many years to come.”
But what if you bought a second home that you no longer use? If you’re now shifting back into the office or are seeing your priorities and needs change, you may find you’re not utilizing your second home as much. If so, it may be time to sell it.
And if you own what’s considered a luxury home, buyer demand for it may be even greater. In another report, the Institute for Luxury Home Marketingexplains:
“. . . the last few years have left their legacy for the luxury market. While it might only represent a small percentage of the overall real estate market, luxury homeownership’s influence is growing. Not only has the purchase of homes valued over $1 million (a figure considered by the National Association of Realtors to be a benchmark for luxury) tripled from 2.6% to 6.5% since 2018, but demand for multiple luxury properties has soared over the last two years.
This phenomenal increase has been driven by a growing affluent demographic who consider owning a luxury property a necessity in their asset portfolio. All indications are that this trend is here to stay, albeit that demand is set to return to a more sustainable level.”
If you own a luxury second home that isn’t being used as much anymore, now’s the time to sell. There are still buyers in the market who are looking for a home like yours today.
Bottom Line
Connect with your real estate advisor to explore the benefits of selling your second home this year.
Scottsdale Phoenix Paradise Valley Cave Creek Carefree Fountain Hills Mesa Tempe Chandler Gilbert Glendale Peoria
Dennis Carr - Realtor, GRI Licensed in AZ and CA 480.825.2870
Thinking of Selling or Buying?
Thank you for reading the Arizona Metro Market Report. I hope this newsletter helps you stay informed about local real estate trends.
The Phoenix real estate market continues to be one of the most attractive locations within the United States. An exodus from Los Angeles and Seattle has helped fuel the growth. In spite of historically high prices in Arizona, the cost of housing continues to be a bargain for many out-of-state buyers. Recent market activity has become more favorable to buyers vs sellers, as overall supply has increased while prices have decreased. The significance of market changes within the Phoenix Metro is impacted by location and price point. Contact me for a more targeted view of a particular location within the Phoenix Metro you are interested in.
If you are considering purchasing in Arizona and would like to discuss the possibility of buying or selling without being pressured, contact meso I can learn more about your timeline and real estate goals. It is important to plan ahead and develop a strategy for success.
