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Buyers | 5 Posts
Community | 1 Posts
Market Update | 7 Posts
August
5

If you're looking for a buyer's market, Buckeye, Queen Creek, and Maricopa will provide buyers with the upper hand when it comes to negotiating. Here is a look at the rest of the Phoenix metro area real estate market. 

This chart shows you the Cromford Market Index (CMI)

CMI > 110 = Favors Sellers

CMI of 90-110 = Balanced Market

CMI < 90 = Favors Buyers

Cromford Market Index Report Aug 2022

As you can see, Gilbert is on the cusp of a buyer's market and Surprise and Tempe could follow within days.  This week, just 6 of the 17 largest cities in the Phoenix Metro area are statistically in a seller's market.  Two of those cities, Goodyear and Avondale, could move into a balanced market shortly. 

Overall, the demand for the entire Phoenix Metro area is currently at 81%. Supply is at 65.6%. Supply has increased significantly during the past 3+ months. In late April 2022, supply was at 24% and demand was at 108%.  Higher interest rates are the primary reason demand has fallen. With fewer sales, supply has been able to accumulate.

Bottom Line: Emotions are crashing, not the real estate market. The market is cooling quicker than anticipated partly due to an overreaction to higher interest rates.

For buyers, you finally have more homes to choose from and less competition. Explore your financing options. Ask about loan programs such as a 2/1 Buydown to obtain a lower interest rate. The 2/1 Buydown allows you to take 2% off the current interest rate for the 1st year, followed by 1% off during the 2nd year, then the original interest rate resumes thereafter. If interest rates drop, buyers can refinance to lock in a lower permanent interest rate. And the BEST part is many sellers are currently contributing towards the buydown fee. 

For sellers, gone are the days when homes sold over a weekend. Now you can expect to wait about 21 days before you have an executed contract. Of course, it depends on your location and price point among other factors. A conservative pricing strategy typically results in more showings and shorter days on the market. Decluttering and first impressions go a long way. Be prepared to make repairs but don't jump the gun until you confirm which ones will give you the results you're looking for. If you also need to buy a home, there's a great possibility you can purchase a home with a contingency to sell your home first. 


Cindy Nelson is an Arizona native and Realtor with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. Cindy is a subscriber to the Cromford Market Report and an active Trusted Advisor University member. 

June
10

Is the greater Phoenix real estate market crashing?  The short answer is no, but it is cooling at a much faster rate than anticipated. This chart shows you the Cromford Market Index (CMI) since 2001. Here is what you need to know about this report:

CMI of 90-110 = balanced market

CMI > 110 = favors sellers

CMI < 90 = favors buyers

Cromford Market Index June 2022

The drop from May 2022 to June 2022 decreased from 385.2 to 272.2 during that time. That's the fastest decline in the history of the Cromford Market Index. This decline was impacted by rising interest rates and increasing supply. 

As you can see, sellers are losing their leverage quickly. This means sellers need to be prepared for longer days on the market, fewer offers, the possibility of having to make buyer-requested repairs and/or offering a credit, and maybe even offering a home warranty.

Buyers, don't be fooled by this weakening Seller's market. While we are presently seeing more list price reductions, this hasn't impacted the purchase price at this time. The gap between supply and demand is still great, so home prices are presently still rising. Now is a great time to take advantage of a loan program with the option to lock in an interest rate prior to finding a home. Also keep in mind, before we reach the point where home prices start decreasing, we must reach a balanced market first. 

Supply and Demand June 2022

While it's not possible to predict where the market will be a year from now, these two reports provide great indicators for what lies ahead in the coming months. 


Cindy Nelson is an Arizona native and Realtor with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. Cindy is a subscriber to the Cromford Market Report and an active Trusted Advisor University member. 

May
20

May 2022 Market Update

For Buyers:
It's the moment you've been waiting for, less competition and more supply in Greater Phoenix! Active supply is up 40% from this time last year, but all that gain has been achieved over the last 6 weeks with an increase of 45%. This is an enormous change from April's report where supply was only up 16% over last year and still below the count reported on January 1st. As of this report, the supply count is 7,157, still 72% below normal for this time of year but rising quickly.

The annual change in inventory is impressive, but it's the short-term growth that is sending shock waves throughout the market. Inventory listed between $400K-$500K is up 35% in just 3 weeks. Counts in all segments between $500K-$1M are up 99% in 6 weeks and the count from $1M-$1.5M is up 54%, also within 6 weeks. Not all price ranges are rising in inventory. Properties listed below $400K are still flying off the shelves and declining in supply.

The increase in inventory may seem like an early Christmas miracle, but it's not coming from a massive flood of new listings hitting the market. Visualize supply counts as the level of water in a bathtub, with new listings coming through the faucet and accepted contracts going down the drain. The water level can rise if there are more new listings coming through the faucet, or if there are fewer accepted contracts flowing down the drain. In this case, new listings are at normal levels and not excessive, but fast rising mortgage rates have reduced the number of accepted contracts and closed the drain. This is what is causing inventory in the "bathtub" to increase dramatically.

While recent interest rates are disappointing for many buyers, causing some to drop out and wait, history has shown us that they rarely stay high, or low, forever. While it's near impossible to predict when interest rates may begin to decline, if we look over the last decade when interest rates have risen by 1% or more within a year, it has taken anywhere from 1 to 3 years for them to return to their original starting point. Even when rates increased by a whopping 5% over 14 months from 1980-1981, it only took 1.5yrs to drop back to where they started. Future expected interest rate drops over the next few years along with moderate home price appreciation and monthly principal reductions may provide today's buyers the opportunity to lower their payments by hundreds of dollars down the road.

For Sellers:
The market is in the early stage of shifting out of an insane seller market and into a mere frenzy seller market. Before we know it, it could be a regular old hot seller market where properties still appreciate but take multiple weeks to sell, buyers don't waive their appraisal contingency, and sellers happily pay for home warranties. But before all of that happens, it starts with one simple act from a seller, a list price reduction.

As inventory has risen at a fast pace over the past 6 weeks, so have the number of weekly price reductions as sellers compete for fewer buyers. Listings between $400K-$500K have seen a 103% increase, with the median price drop at $13,000. Price drops in $500K-$800K range increased 157%, with median drops between $16,000 and $20,000. Drops in the $800K-1.5M range increased 125%, with a median drop between $25,000 to $50,000.

So far, price reductions have proven effective in keeping the median days prior to contract around 7 days. However, as inventory continues to rise in the coming weeks, price reductions may not be enough to keep some properties from lingering longer in active status, creating more choice for buyers and strengthening their bargaining power.

While the market is still strongly in favor of sellers, it is changing rapidly. For those sellers waiting to sell close the peak of price, this may be the time to list. Prices are still projected to continue rising, but at a slower pace over the next few months.

May 2022 Market Update Infographic

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2022 Cromford Associates LLC and Tamboer Consulting LLC

February
1

December
23

Sold in 3 days! Sold thousands over asking price! Watching these ads may give you the impression you're getting something out of the ordinary. In this brief market update, I review the Phoenix market conditions so you have a clear and accurate picture of what's normal. Those high-dollar ads come at a price. Find out how to choose the best real estate agent when it's time to sell or purchase a home. 

Cindy Nelson is an Arizona native and Realtor with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. This includes Phoenix, Gilbert, Mesa, Chandler, Tempe, Apache Junction, Queen Creek, Gold Canyon, Maricopa, Scottsdale, Phoenix, Glendale, Buckeye, Peoria, Surprise, Tolleson, Laveen, Sun City, Sun City Grand, Fountain Hills, Sun Lakes, Goodyear, Litchfield Park, San Tan Valley, Pinetop, Lakeside and Show Low.

December
15

Dec 2021 Phoenix Market Update

For Buyers: 
Does anyone know what a normal, or balanced, housing market looks like anymore?  In Greater Phoenix, the supply and demand indices have only come together twice in the past 21 years to form a balanced market.  First from 2000-2003, then again from 2014-2015.  There have only been two buyer markets recorded during that same time frame, from 2006-2009 (extreme) and a brief 3 months in 2010 (mild).  Seller markets were recorded from 2003-2005, 2011-2013, and 2015-2021. The last 18 months have been extreme to say the least.

Over the past 21 years, Greater Phoenix has been in a buyer market for a combined total of 43 months (3.6 years), a balanced market for 55 months (4.6 years) and a seller market for 155 months (12.9 years).  This is important to discuss because the longer seller markets last, the more human beings change their definition of what "normal" looks and feels like. 

"Normal" for Greater Phoenix is not a balanced market, it's a seller market. The years from 2015-2019 got us used to 2-3 months to sell a home, 15-19% of sales closing over list price, $2,500 over list considered an amazing offer, 25-28% of sales with closing cost assistance and 5-9% annual appreciation.

The last 18 months have shifted our expectations to 1 month to sell a home start-to-finish, 40-60% of sales closing over list price, $10,000 over asking price to start the bid, only 2-3% of sales with closing cost assistance and 27-39% annual appreciation.

So when national analysts suggest the housing market will cool off in 2022, many (if not most) local housing analysts believe it will remain a seller market, but a weaker one.  Prices don't decline in seller markets, but listings may stay active for a few more days before accepting a contract. A full price offer may be enough to win a home. Buyers may have less pressure to waive appraisal and repairs.

However, after the last 18 months of extreme seller market conditions, anything less than sheer lunacy could feel like the sky is falling.

For Sellers:
With all the talk of 2022 predictions and uncertainty, it's important for sellers to stay in the moment and lean into what is known.  The reality of the Greater Phoenix housing market is that supply is 67% below normal and dropping.  Demand is 23% above normal and stable for now.  Until these two indicators start moving towards each other, the housing market will not see prices stabilize. If anything were to negatively affect Wall-Street-financed corporate iBuyers and institutional landlords, then that would cause a shift downward in demand.  That could happen someday, but it isn't happening today.

Even if demand were to decline tomorrow, sale price measures are the last to change in a shifting market. The first thing to go up would be the cost of the sale for the seller.  For example, days on market will increase, list price reductions will increase and then eventually seller concessions will increase before anything is reflected in the final sales price.  The pattern goes like this; homes are on the market longer than expected as sellers push the boundaries on price. If the market resists in the form of zero offers, a price reduction is recorded in response.  If demand dwindles to where only one offer is received instead of multiple offers, more pressure is placed on sellers to offer home warranties, do repairs, or consent to closing cost assistance in order to secure closing at their desired price. None of these indicators appear to be shifting at the moment, but that could change.  The key for sellers in 2022 is to stay on top of current market trends, listen to your REALTOR®, and be the first to shift expectations if buyer demand drops.  A wise REALTOR® once said, "If you can't be with the buyer you love, love the one you're with."

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2021 Cromford Associates LLC and Tamboer Consulting LLC

December 2021 Market Update Data

August
11

How long will it be before we hit a balanced market in the Phoenix metro area? In this brief video, I'll compare the 2005 real estate market to 2021, plus I'll explain what you can expect in the months ahead for both buyers and sellers.


Cindy Nelson is an Arizona native and Realtor with Realty ONE Group and serves the Phoenix Metro area and the White Mountain region. This includes Phoenix, Gilbert, Mesa, Chandler, Tempe, Apache Junction, Queen Creek, Gold Canyon, Maricopa, Scottsdale, Phoenix, Glendale, Buckeye, Peoria, Surprise, Tolleson, Laveen, Sun City, Sun City Grand, Fountain Hills, Sun Lakes, Goodyear, Litchfield Park, San Tan Valley, Pinetop, Lakeside and Show Low.

July
19

I-10 Broadway Curve Project

Watch out Valley drivers! The Interstate-10 Broadway Curve construction project is underway.  The expected completion date is late 2024. The project is intense, so I recommend you check the project website often and sign up for traffic and construction alerts. 

Here are the improvements ADOT is making:

  • Widening Interstate 10 to six general purpose lanes and two high-occupancy vehicle (HOV) lanes in each direction between US 60 (Superstition Freeway) and Interstate 17, and adding a fourth general purpose lane in each direction between Ray Road and US 60
  •  Adding Collector-Distributor roads parallel to I-10 between Baseline Road and 40th Street to separate through-traffic on I-10 from local traffic entering or exiting the highway
  • Rebuilding the I-10 interchange with State Route 143 to improve traffic flow and create direct connections to and from SR 143 for drivers in the I-10 high-occupancy vehicle (HOV) lanes
  • Replacing the Broadway Road bridge over I-10
  • Replacing the 48th Street bridges over I-10
  • Widening the I-10 bridges over the Salt River
  • Building two bridges for pedestrians and bicyclists over I-10 between Baseline and Broadway roads (at Alameda Drive and the Western Canal) and improving the Sun Circle Trail crossing at Guadalupe Road
  • Building sound and retaining walls where warranted

Source: Arizona Department of Transportation

For project details and to sign up for traffic and construction alerts, visit https://i10broadwaycurve.com/

Disclaimer: All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) or information provider(s) shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumers personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Information on this site was last updated 10/06/2022. The listing information on this page last changed on 10/06/2022. The data relating to real estate for sale on this website comes in part from the Internet Data Exchange program of ARMLS (last updated Thu 10/06/2022 10:56:06 PM EST). Real estate listings held by brokerage firms other than Cindy Nelson - Realty One Group may be marked with the Internet Data Exchange logo and detailed information about those properties will include the name of the listing broker(s) when required by the MLS. All rights reserved. --

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