Cromford Market Index
Sept 19 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest
cities.

 

 

The negative trend that started 2 weeks ago has gained strength and buyers are still gaining negotiation
power, though the trend remains mild and concentrated in the lower and middle price ranges.

 

There are again 7 cities showing an increase in their Cromford® Market Index over the past month. We
also have 10 cities showing a decrease and that includes the two largest cities - Phoenix and Mesa.

 

The average change in CMI over the past month is -1.3%. Last week we saw -0.7%. The average would
be much lower if it were not for Paradise Valley which is up very sharply over last month.
Fountain Hills is also showing a respectable percentage gain of 10%. The remaining green dots are
relatively unimpressive: Buckeye, Scottsdale, Cave Creek Surprise and Glendale are all up over the
last month, but not by much. The largest declines are to be found in Avondale, Chandler, Phoenix,
Peoria and Maricopa.

 

9 out of 17 cities remain seller's markets over 110, though 3 of these are below 120. We have 3 cities
that are balanced, while the remaining 5 are buyer's markets. 2 cities are now over 140, both dominated
by more expensive houses. The luxury market favors sellers much more than the rest of the market.

Although there are some small signs of improving demand, supply is growing faster, so the balance is
mostly tilting in a direction favorable to buyers.

 

 

Sep 18 - The Federal Reserve didn't hold back and knocked 50 basis points off their benchmark interest
rate.

 

Judging by the fact that you could not get into the website Mortgage News Daily, this sparked a lot of
interest in what this action might do to mortgage rates.

Surprise, surprise - they went UP slightly. This is because mortgage rates are not based on the federal
funds rate but tend to be controlled by the 10-year Treasury bond yield.

 

Mortgage rates had already fallen in anticipation of a Federal Reserve cut, and Powell's comments were
seen as less optimistic than had been expected.

 

Is it any wonder that people are notoriously wrong when they attempt to forecast interest rates.

The rate cut did affect the dollar as you would expect, which dropped against most foreign currencies
as it is now less attractive to hold US dollars. This makes homes in Arizona a little cheaper for foreign
buyers.

 

 

Sep 17 - We are now seeing definite signs of a small improvement in demand, no doubt influenced by
the lower prevailing mortgage rates.

 

The number of listings under contract is up 2.5% compared with a year ago. The last time we saw a
year over year increase was back in January and it only last a mere 2 days. We have to go all the way
back to February 2022 for the previous example.

 

They are also up 4.7% over the last month. This is not huge, but it is a sign that transaction volumes
are no longer getting worse.

 

Before sellers get too excited active listings are also rising, so it would seem that many of these extra
buyers are also sellers. This means it is the move-up sector that is showing signs of life. Because of
this, the Cromford® Market Index is still going down.

 

The good news for agents is that these small changes portend larger numbers of transactions going
forward. As interest rates fall, this little trend should in theory get stronger.