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.

 

 

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

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The market is still getting less favorable for sellers. However, the average change in CMI is -4.1%, which is less negative
than last week's -4.6%.

 

Just 4 cities have improved for sellers over the last month, the same number as last week. The remaining 13 cities
improved for buyers. Scottsdale, Chandler, Glendale and Phoenix have deteriorated the most for sellers. Fountain Hills
has improved the most and taken over the top spot from Chandler. Maricopa has also improved for sellers, but still has
not managed to catch Buckeye. Goodyear and Buckeye saw only marginal improvement.

 

We have 3 cities that are seller's markets (2 of these very weak seller's markets), 8 are balanced and the remaining 6 are
buyer's markets.

 

Supply is no longer trending higher but instead looks stable. However, the already weak demand is now starting to get
worse.

 

 

May 25 - Some of the results of a recent survey by Bank of Montreal (BMO) are a little startling. They questioned
potential home buyers and found that:

 

• High mortgage rates are impacting home purchase plans for nearly 7 in 10 U.S. adults,
• More than a third of potential buyers surveyed by BMO said rates would need to drop to around 3% or less before
they’d be ready to step off the sidelines.
• The idea of buying a starter home and upgrading later is losing its appeal, with 58% of respondents viewing this
strategy as outdated.

 

The first line is not surprising at all, though people as old as me will consider rates of 7% to 8% as perfectly normal,
not unusually high.

 

The most surprising item is the second bullet - a third of potential buyers are waiting for mortgage rates to drop to
around 3% or less. To me this would indicate they are not really potential buyers, since the probability of seeing
mortgage rates at 3% or less in the next 10 years is very low indeed. Indeed, rates this low have rarely existed in
the last 100 years. Although we did see rates below 3% for a while between July 2020 and August 2021, that was
an abnormal period due to massive injection of liquidity by the government to offset the financial effects of the
COVID pandemic. Lenders could borrow funds at close to zero interest rate, so they could still make money lending
at 3%. This period gave us by far the lowest mortgage rates in history. Prior to this abnormality the lowest rate seen
was around 4% at the end of the Second World War. The long-term average for 30-year mortgages is about 7.75%,
higher than the current 7% or so. There is no likelihood of us seeing 3% or even 4% for a 30-year fixed loan in the
medium term. Let's get real.

 

Also slightly surprising is the idea that buying a starter home is outdated. It may be temporarily out of fashion,
because there is serious potential for declining home prices when the Cromford® Market Index is below 90. This
means the ladder may go down just as you place your feet on it. However, you can count me as a strong believer
in the wisdom of having a foot on the ladder once the CMI goes back over 100 or even looks likely to be headed
that way.

 

May 24 - The monthly average $/SF for closed condo/townhouse listings is shown below. The chart is restricted to

 

Maricopa County and homes priced between $200,000 and $500,000. This covers the bulk of condo / townhouse
properties in the less expensive parts of the valley.

This sub-market is pretty cold and as a result prices have been on a declining trend since the fourth quarter of
2023. With the current imbalance between plentiful supply and weak demand, we anticipate further price weakness
in this segment of the market.

 

Luxury condos in expensive locations are not caught up in this downtrend, as supply is limited and demand remains
reasonably strong. HOA finances tend to be better in these communities though there are exceptions.

 

 

Because of the much smaller sample size, we changed the chart from a monthly average to a 6-month average.

 

The price range is from $500,000 upwards and dwelling types are condo / townhouse again.

 

For the higher price range, the closing price per sq. ft. trend is still looking positive.