This Dashboard provides a comprehensive summary of the current state of the overall residential resale market.
All the statistics shown are for the entire Arizona Regional area as defined by ARMLS. All residential resale transactions
recorded by ARMLS are included. Geographically, this includes Maricopa County, a large part of Pinal County and a small
part of Yavapai county. In addition, "out of area" listings recorded on ARMLS are included, although these usually
constitute a very small percentage of total sales and have very little effect on the data.
All dwelling types are included. For-sale-by-owner, auctions and other non-MLS transactions are not included. Land,
commercial units, and multiple dwelling units are also excluded.

Like last week, we see the market has improved significantly for sellers over the last month. We have
15 large cities showing an increase in their Cromford® Market Index over the past month and only 2
showing a decrease. These are the same cities as last week.
The average change in CMI over the past month is +10.4% while last week we saw +8.8%.
Tempe, Paradise Valley, Fountain Hills, Chandler, Scottsdale, Mesa, Glendale, Goodyear, Peoria and
Gilbert are all giving us double figure percentage improvements. The only cities that have still not
managed an improvement from one month ago are Maricopa and Surprise.
Unlike last week, we now have 11 cities that are seller's markets, only 1 that is balanced but still 5 that
are buyer's markets. Those 5 still have a long way to go to get back to balance.

 

Jan 10 - Time to take a look at the trends of the first full week of 2025.
• Active listings with no contract - these have increased 4.1% over the past week from 19,776 to 20,583
• Listings under contract - these have increased 4.4% over the past week from 5,496 to 5,737
• The contract ratio has moved very slightly higher from 27.79 to 27.87
We are trying to get a handle on the direction of the market, but to be honest there is not much to talk
about here. It's nice that listings under contract expanded by a higher percentage than active listings,
but the difference was so small it only added 0.29% to the contract ratio. This is not signaling a big
swing in favor of sellers, just more of the same as implied by a Cromford® Market Index in the low 90s.
If we compare it to the same week last year then

 

• Active listings have grown a bit faster - last year they increased only 3.3%
• Listings under contract have grown much slower - last year they increased 8.4%, almost twice the
percentage
• Last year the contract ratio grew from 35.98 to 37.76, adding 4.9% during the first week

 

With mortgage rates still rising, there is little fuel for the optimists to run on here. On the other hand
there is not much to please the pessimists either.
In fact there is not much message in these numbers. Perhaps things will get more exciting during the
second week?

Market Summary for the Beginning of 2025

Here are the basics - the ARMLS numbers for January 1, 2025 compared with January 1,
2024 for all areas & types:

 

• Active Listings (excluding UCB & CCBS): 20,007 versus 14,593 last year - up 37% - but down
7.3% from 21,593 last month
• Active Listings (including UCB & CCBS): 22,196 versus 16,457 last year - up 35% - but down 8.2%
compared with 24,178 last month
• Pending Listings: 3,307 versus 3,263 last year - up 1.3% - but down 13.2% from 3,808 last month
• Under Contract Listings (including Pending, CCBS & UCB): 5,496 versus 5,127 last year - up 7.2%
- but down 14% from 6,393 last month
• Monthly Sales: 5,581 versus 4,923 last year - up 13.4% - and up 8.4% from 5,147 last month
• Monthly Average Sales Price per Sq. Ft.: $303.62 versus $284.40 last year - up 6.8% - and up
4.7% from $290.02 last month
• Monthly Median Sales Price: $450,000 versus $429,900 last year - up 4.7% - but unchanged from
$450,000 last month

 

There is quite a lot of positive news in these numbers. Obviously, supply is down from the
November peak, but we would expect that as part of the usual seasonal pattern. What we don't
know is how fast supply will grow again in January and we will be closely watching that over the
next several weeks. The decline was late starting in November, but it really accelerated in

 

December and ended in a big bang with a large number of listings expiring at the end of December.
For sellers it is much better to have 7.3% fewer active listings to compete with. But if those expiring
listings come straight back in January, the good news will have been an illusion.

 

Closed sales counts are improving nicely. December's count was up more than 13% from a year
ago, although we must admit this was an easy target to beat. It is encouraging that the annual
sales count has risen to almost 72,000. much healthier than the 69,627 we saw at the end of
September. However, it is still well below the long-term average of 85,000 per year.
Under contract counts remain subdued but at least we managed a 7% increase from the beginning
of 2024.

 

A combination of reduced supply and a slight recovery in demand means the Cromford® Market
Index has returned to the balanced zone between 90 and 110. We are no longer in a buyer's market
across all areas, though several outlying locations remain very favorable to buyers.

 

Overall, demand is slowly starting to rebuild, despite mortgage rates remaining stubbornly high.

 

Our concern is that we do not know how much new supply will arrive during the next 3 months. If
we get a light load then the market will continue to move towards balance. If we get a large number
of new listings then we could slip back into a buyer's market. The next 4 weeks are likely to be
critical.

Pricing was unusually strong in December, particularly when we look at the $/SF numbers. This
measure is distorted by the relatively hot market in upscale luxury homes. These are selling in
healthy numbers and for higher prices. A frothy stock market, combined with elevated
cryptocurrency values means that those with significant capital investments are feeling much better
off. The very wealthy have done extremely well over the past couple of years and as usual this has
increased demand in the extremely high-end markets, especially the Northeast Valley.

 

Most home builders' stocks tell quite an interesting story in 2024 having gained hugely in value by
the end of September only to give most or all of those gains back by the end of December once it
became clear that mortgage rates were not coming down in a hurry. The inventory of completed
but unsold new homes has recently been increasing for the USA as a whole and the new home
supply is more plentiful than it was this time last year. This may lead to more flexibility from home
builders in sales negotiations during the first half of 2025, especially concerning homes that are
ready to move in.

 

With 30-year fixed mortgage rates over 7%, we do not anticipate strong growth in demand, but the
reversal of the earlier declining demand trend is a good sign that we have seen the worst.

 

Everything now depends on how much additional supply will arrive over the next few months.