Maricopa County April Market Update

Points of Interest

• INVENTORY CHANGES: This is likely the biggest recent news! The active listing count is increasing quickly (even since the data contained in this graphic), and according to Cromford analysis, it has much to do with a quickly shrinking demand.
• SALES PRICES: It’s worth noting that prices are always a lagging indicator of the market. We continue to hit record highs.
• CLOSINGS OVER LIST PRICE:  In April, 57% of all homes being sold were at over list price! I would suspect we have reached the peak. The price point with the highest percentage (65%) of sales over list price continues to be $300-400k.
• ANNUAL APPRECIATION: We are still seeing a 24% appreciation rate based on monthly average price/sf.
• LOWER TRANSACTION VOLUME: There is definitely a cooling trend in volume of sales. April sales were more in line with 2017/2018 numbers.
• SELLERS MARKET: The entire Valley remains a SELLER MARKET, however all 17 major cities in the Greater Phoenix market are moving towards buyers. This is actually good news, but somewhat unsettling given that we have become accustom to this hyper sellers market. The Cromford Market Index (CMI) has been rapidly decreasing for the last 2 months, and is now 382. Though there is still upward pressure on pricing, the rate of that acceleration will no doubt decrease. Listings will likely sit on the market longer (even if that is only a few days), and the crazy over list price offers might come back from insanity. A balanced market of supply vrs demand is a CMI of 100.
• NEW CONTRACTS: We are essentially at a 4-year low in new contracts. This is a leading indicator of the market, so it would be reasonable to surmise that the near future transaction volume with be lighter than previous years.

BOTTOM LINE: There is definitely a shift! Inventory is recently rising and buyer demand has been weakening. There is certainly a cooling of the market. I would suspect that as the consumer begins to feel some of these changes and is educated about the current market, the “if I sell, where would I go” response might be answered by more available listings, which could possibly re-engage some potential sellers. My hunch is that buyers who have missed out in recent months might be able to win a contract now, assuming they can still afford to buy given the rapidly increasing interest rates.