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Daily Observations from The Cromford Report



November 12 - The average price per square foot for listings under contract has been very lively over the past few months. See the chart below:

It was reading $181.97 as recently as October 17 (see daily observation of that date) and has risen almost $5 in a little over 3 weeks.

This is the steepest climb we have seen for a very long time and illustrates some of the after-effects of the huge rise in the CMI during the first 9 months of the year.

Home prices have a great deal of upward momentum.

November 10 - The market remains exceptionally favorable for sellers. There are numerous ways to show this but one simple method is to measure the listing success rate. The current level of 84.2% is by far the highest we have seen for November (week 45) since we started recording this measure in 2006.

The original Flash chart can be found here if you would like to see the years prior to 2014.

November 8 - Based on affidavits of value filed during October we have collected the following counts of iBuyer activity:

  Opendoor OfferPad Zillow Knock All iBuyers Combined
Homes Purchased in October 2019 285 113 66 2 466
Homes Purchased in October 2018 206 134 90 0 430
Annual Change in purchases +38% -16% -26%   +8%
Homes Sold in October 2019 345 83 83 5 516
Homes Sold in October 2018 224 85 25 0 334
Annual Change in Sales +54% -2% +132%   +54%
Median Purchase Price in October 2019 $248,300 $250,000 $267,800 $276,000 $250,300
Median Purchase Price in October 2018 $239,600 $230,204 $332,000   $244,950
Median Sale Price in October 2019 $250,000 $249,900 $333,500 $293,381 $260,100
Median Sale Price in September 2018 $250,470 $243,250 $323.000   $251,000
Homes in Inventory at the End of September 971 458 182 15 1,626


On the buying side, iBuyers have grown only 8% compared with a year ago. This not any higher than the overall unit growth experienced by the market. However Opendoor grew purchases by 38% while OfferPad and Zillow bought less than they did in October 2018.

The picture is rather different for sales, which are up 54%. far higher than the market as a whole. Zillow grew the most at 132% but they will be unable to keep up this pace because of their low purchase numbers. Their inventory is down to only 182. Opendoor achieved 54% growth in sales, in line with the iBuyers as group. Opendoor inventory is 5 times as high as Zillow and more than twice that of OfferPad whose inventory is quite large relative to sales.

November 7 - Here is the table of Cromford® Market Index values for the single-family markets in the 17 largest cities:

Here we see little change from last week. Cave Creek is improving quickly for sellers while Fountain Hills is doing the opposite. Goodyear, Buckeye and Paradise valley have seen a more significant inflow of new supply than the rest. Glendale, Chandler and Maricopa are the only cities other than Cave Creek bucking the general trend.

We have seen fairly weak new listing flow for the first week of November so it looks like the movement in favor of buyers will be short lived and relatively insignificant to the overall picture. We remain in a strong seller's market for the top 15 cities in this list and in a moderate seller's market for the bottom 2.

November 5 - The preliminary numbers for October, based on affidavits filed in Maricopa County, confirm robust pricing trends and strong sales counts..

Across all sales of single-family and townhouse / condo properties within the county, the unit count was 9,680, up 7% from October last year. The median sales price climbed 9% from $271,000 to $292,000.

For new homes, the unit count rose 6% to 1,456 while the median sales price gained 6% to $369,660. The re-sale market produced 8,224 recorded deeds, a rise of 7%, while the median sales price rose 9% to $280,000. The average new home is much larger than the average re-sale which goes some way to explain the large difference in median prices between new homes and re-sales..

November 2 - If you are a buyer looking for the extra supply that arrived over the last month, here are some of the places you won't find it:

  • Phoenix 85003, 85004, 85012, 85014, 85015, 85016, 85018, 85020, 85031, 85032, 85040, 85044, 85050, 85083, 85085, 85086
  • Mesa 85205, 85208, 85213
  • Coolidge 85128
  • Maricopa 85139
  • Sun Lakes 85248
  • Chandler 85249, 85286
  • Scottsdale 85254, 85257, 85259
  • Superior 85173
  • Tempe 85282, 85283
  • Glendale 85302, 85304, 85305, 85308
  • Cave Creek 85331
  • Litchfield Park 85340
  • Morristown 85342
  • Waddell 85355
  • Wittmann 85361
  • Surprise 85378, 85379
  • Peoria 85381, 85383

The above ZIP codes all have fewer single-family active listings on November 1 than they had a month earlier. UCB and CCBS listings are excluded.

Here are the best spots to look with a significant increase in active listings:

  • Phoenix 85017, 85021, 85023, 85028, 85035, 85043, 85045, 85053
  • Mesa 85203, 85206, 85215
  • Gold Canyon 85118
  • Apache Junction 85119, 85120
  • Arizona City 85123
  • Chandler 85224
  • Florence 85132
  • Scottsdale 85262, 85266
  • Rio Verde 85263
  • Fountain Hills 85268
  • Tempe 85281
  • Gilbert 85295, 85296
  • Glendale 85303, 85306, 85307, 85310
  • Buckeye 85326, 85396
  • El Mirage 85335
  • Goodyear 85338, 85395
  • Peoria 85345, 85382
  • Youngtown 85363
  • Sun City 85373
  • Surprise 85374, 85387
  • Sun City West 85375
  • Carefree 85377
  • Wickenburg 85390

November 1 - We start the month with a look at the Cromford® Market Index values for the single-family markets in the 17 largest cities:

At first this looks like a big improvement over last week since we have 4 times as many cities showing better conditions for sellers. However the average monthly change in the CMI is -4.6% which is only a tad better than the -5.0% we saw last week. The downward trend is slowing but has yet to reverse. It is likely to do this well before Christmas.

With weaker new listing numbers we expect this table to get quite a bit greener over the next 2 months. We do have four cities showing severe shifts down (Fountain Hills, Paradise Valley, Buckeye & Goodyear). However we normally see active listing counts decline quickly between the third week of November and the end of the year which will bring a boost for the CMI numbers as long as demand holds steady.

We are still in a market that strongly favors sellers and the upward price pressure this implies is starting to become more evident in sales recordings.

October 2019


October 30 - The S&P Case-Shiller® Home Price Index® was released yesterday for August 2019. It covers sales between June 1 and August 31.

Here are the month to month changes:

  1. Phoenix +0.90%
  2. Tampa +0.34%
  3. Miami +0.34%
  4. Cleveland +0.28%
  5. Atlanta +0.23%
  6. Minneapolis +0.17%
  7. Charlotte +0.14%
  8. Boston +0.12%
  9. New York +0.12%
  10. Detroit +0.11%
  11. Chicago +0.10%
  12. Dallas +0.04%
  13. Washington +0.00%
  14. Los Angeles -0.01%
  15. Portland -0.03%
  16. Denver -0.16%
  17. San Diego -0.16%
  18. Las Vegas -0.18%
  19. Seattle -0.29%
  20. San Francisco -0.47%

The national average was +0.20%. Phoenix rose from 3rd to 1st place in this table and is far out in front. 9 out of 20 cities were negative month to month.

The year over year changes were as follows:

  1. Phoenix +6.3%
  2. Charlotte +4.5%
  3. Tampa +4.3%
  4. Atlanta +4.0%
  5. Boston +3.9%
  6. Minneapolis +3.9%
  7. Detroit +3.8%
  8. Las Vegas +3.3%
  9. Cleveland +2.9%
  10. Denver +2.9%
  11. Miami +2.9%
  12. Dallas +2.8%
  13. Washington +2.7%
  14. Portland +2.6%
  15. San Diego +2.3%
  16. Chicago +1.4%
  17. Los Angeles +1.0%
  18. New York +0.9%
  19. Seattle +0.7%
  20. San Francisco -0.1%

The national average was 3.2%. Phoenix once again extended its lead at the top of the table.

October 29 - At last we are beginning to see single-family permits open up a noticeable lead over last year. The year-to-date count for Maricopa & Pinal counties was 18,469 at the end of September. This is up 4.6% from the same time last year. The advance has more to do with the weak numbers during September 2018, when developers were understandably feeling pessimistic about the demand situation. September 2019 gave us 1,916, not a spectacular number but a big improvement on the 1,511 we saw the previous September. The present rate will struggle to keep up with the current level of demand and has little to no chance of making life easier for buyers by increasing the overall level of supply.

October 28 - The supply of new listings has weakened again since September and it is looking increasingly likely that the 4Q peak in active listing counts will occur earlier than usual. In most years we see active listing counts reach a peak during the third week of November and then decline quite sharply as we head into the holiday season. At the moment several segments are struggling to exceed the peak made during the the third week of October.

October 25 - It is time for another look at how the Cromford® Market Index values are behaving in the single-family markets of the 17 largest cities:

October 25 - It is time for another look at how the Cromford® Market Index values are behaving in the single-family markets of the 17 largest cities:


Only Cave Creek has improved for sellers over the past month. This is a little ironic as Cave Creek was bottom of the table for several weeks in September.

All the other cities have seen the balance shift in favor of buyers. However 8 cities remain above 200 so this is still a market which favors sellers to an extraordinary extent. Only the bottom 2 cities (Buckeye and Paradise Valley) are below 150. Remember that 100 represents a normal balanced market where sellers and buyers have equal negotiation power.

October 24 - The first 3 weeks of October produced 6,515 new listings across Greater Phoenix. This is down 3% from 6,708 last year and is the lowest count we have ever seen for these 3 weeks. New listing counts were slightly higher in September than last year, but October has gone back to the weakness in new supply that we saw in June, July and August.

October 23 - When comparing month-to-date numbers it is crucial to use periods which consist of 7, 14, 24 or 28 days otherwise any comparison is destroyed by the natural weekly cycle.

Comparing the first three weeks of October with the same three weeks of 2018 we can see that closed listings for Greater Phoenix are up from 4,239 to 4,513, an increase of 6.5%. The total for Pinal County alone is up from 393 to 470, an increase of 19.6%, so Maricopa's growth was much slower at 5.0%. Closed listings for homes over $1m were down 12% while those between $500k and $1m were up 28%,

October 19 - Some of the larger percentage increases in supply at this time of year tend to occur in the smaller cities. Here are a few examples on the change in active listing counts between August 13 and October 13, 2019 (excluding UCB and CCBS listings):

  • Tonopah - up 91% from 11 to 21
  • Wickenburg - up 67% from 64 to 107
  • Youngtown - up 63% from 8 to 13
  • Rio Verde - up 57% from 47 to 74
  • Eloy - up 33% from 27 to 36
  • Coolidge - up 30% from 44 to 57
  • Waddell - up 28% from 58 to 74
  • Florence - up 27% from 98 to 124

For comparison, Phoenix was little changed from 2,293 to 2,285 over the same period, although its supply has been on the rise since hitting a low point of 2,055 on September 5.

Not all smaller cities followed the same pattern. Carefree was up only 12% while Wittmann was down 5% and New River was down 26%.

October 18 - Price momentum is rising, and in normal markets this tends to bring the market closer to balance. It does this by giving sellers better reasons to sell and giving buyers greater affordability problems.

We can see this in the Cromford® Market Index table for the 17 largest cities and their single-family markets:

Only 3 of the 17 cities are showing improvement for sellers, though, interestingly, Cave Creek is one of them, having under performed the average for the last several months.

The largest declines are seen in Buckeye, Paradise Valley, Fountain Hills, Goodyear and Avondale.

We expect this downward trend in the CMI to continue for another 5 weeks and then most likely it will peter out. Nothing is for certain in this business however.

October 17 - We have a Tableau chart that tracks the weekly average of $/SF for listings under contract. You can find the live version here.

This was looking weak during the second and third quarters but has perked up dramatically since August 7.

$181.97 is the highest we have seen since the bubble year of 2005.

The recent advance is even more extreme for condos and townhomes, reaching $210.03.

October 14 - Prices have started to show new upward momentum over the past 4 weeks as shown in the chart below:

The green line represents the average pending list price per sq ft and this is a leading indicator for average sales price per sq. ft. The red line represents the latter and it is now starting to follow suit.

Higher prices should encourage more sellers and discourages buyers which will eventually have a balancing effect on the market. If you ever see that higher prices encourage buyers to buy more,m that's when you have a bubble developing. This is what happened in 2004 and early 2005, but it is not happening now.

October 11 - The table below shows the Cromford® Market Index values for the single-family markets in the 17 largest cities:

We now see the majority of cities (12 out of 17) deteriorating for sellers and only 5 improving. Mind you, the cities still showing improvement include some very large ones: Phoenix, Mesa, Scottsdale, Peoria & Tempe.

The average monthly change in the CMI is -3.5%. It was -1.6% last week.

The overall picture is still of a market that is heavily imbalanced in the seller's favor, but the recent additional supply and slight fall in demand is reversing the trend of the third quarter.

October 10 - After the first full week of October we can report some detected changes in volumes compared with the first week of October in 2018.

New listings totalled 2,214 across Greater Phoenix which is up 3% from 2,144 last year. New listings are flowing more freely than they did over the previous 3 months.

Closed listings totalled 1,443 across Greater Phoenix, which is up 4% from 1,387 last year, Closings are running ahead of 2018 but not by as great a percentage as in September.

More new listings, more closings and higher prices all add up to an expanding market with higher dollar volumes for agents, title companies & lenders.

October 9 - Based on affidavits of value filed during September we have collected the following counts of iBuyer activity:

  Opendoor OfferPad Zillow Knock All iBuyers Combined
Homes Purchased in September 2019 374 85 53 2 560
Homes Purchased in September 2018 190 119 63 0 461
Annual Change in purchases +97% -29% -16%   +38%
Homes Sold in September 2019 344 97 136 2 535
Homes Sold in September 2018 271 94 10 0 355
Annual Change in Sales +27% +3% +1260%   +54%
Median Purchase Price in September 2019 $243,300 $224,865 $259,700 $354,773 $242,850
Median Purchase Price in September 2018 $241,700 $226,162 $271,050   $240,900
Median Sale Price in September 2019 $247,000 $260,000 $300,500 $292,388 $262,000
Median Sale Price in September 2018 $248,000 $244,000 $308.000   $247,500
Homes in Inventory at the End of September 1,031 428 199   1,723


On the buying side, iBuyers have grown 38% compared with a year ago. However almost all of this growth is accounted for by Opendoor, who are up 97%. OfferPad bought 29% fewer homes than in September last year while Zillow is down 16%. The only other growth is from Knock who were not operating in Phoenix 12 months ago.

On the selling front, iBuyers achieved an impressive 54% growth in units and this was distributed among all 4 players. Zillow had barely started selling homes last year so their percentage growth is enormous. Given their relative size, Opendoor's growth of 27% is impressive.

It must be pointed out that buying homes is very much harder in today's market than selling them. This is particularly true in the iBuyers' favorite price range.

Zillow's direction is not clear - they appear to be buying far too few homes to sustain their sales rate and their inventory has collapsed to under 1.5 months. Opendoor is buying slightly more than they are selling and are keeping inventory around 3 months. OfferPad seems to have reached a steady state of around 100 homes a month. They have declined to move upmarket even though the shortage of homes under $250,000 must be limiting their growth. They have plenty of inventory at about 4.4 months.

October 7 - Probably the most interesting graph on our site right now is tucked away in an obscure corner of the Tableau Charts section.

This shows the year-over-year percentage change in the active listing price per sq. ft.

Notice how it crashed to below zero between February and April, only to zoom upward to reach 9% over the past 5 months.

This is a leading indicator with typically a 3-6 month lag. The chart is telling us that sales prices should have been comparatively weak during the third quarter but they will bounce back strongly in the fourth quarter.

October 5 - Among the next 12 cities not included in the top 17, this is how their CMI has fared over the past 4 weeks:

  • Anthem -0.7%
  • Apache Junction +2.7%
  • Arizona City -6.6%
  • Casa Grande +2.7%
  • El Mirage -0.6%
  • Gold Canyon +1.7%
  • Laveen -0.8%
  • Litchfield Park -0.7%
  • Sun City -3.6%
  • Sun City West -5.5%
  • Sun Lakes -1.7%
  • Tolleson -0.2%

The average change was -1.1%. With 3 cities improving for sellers and 9 deteriorating, this is a similar picture to the top 17 cities we discussed yesterday.

October 4 - The Cromford® Market Index values for the single-family markets in the 17 largest cities are shown in the table below:

For the first time in many months we see the majority of cities moving in favor of buyers. We have only 7 cities still showing an improvement for sellers.

All cities are strong seller's markets but the average change in the CMI over the last month was -1.6%. Last week we saw +1.5%.

Most changes were fairly modest but Avondale, Cave Creek and Buckeye were leaders in the downward movement. Tempe was the only big mover in favor of sellers.

This set up looks like a modest decline in the CMI over the next 7 weeks followed by a rising trend after Thanksgiving. However nothing is for certain in this business.

October 3 - The average days on market for closed listings across all areas and types fell to 58 during September. This is the lowest monthly figure since February 2006.

Prior to the introduction of UCB status we tended to see average days of around 60 to 70 in a normal balanced market. Days on market continue to accrue for UCB and CCBS listings, but stop for pending listings. The switch by many agents, avoiding pending and using only UCB when their listings go under contract, has caused typical days on market to increase to a range of 90 to 100 in a normal balanced market. The last time we were close to that situation was in 2014.

While 58 would have been close to normal in 2002, it it is indicative of a strong seller's market in 2019.

October 2 - In contrast to yesterday's observation, here are the ZIP codes which have experienced the largest percentage rise in single-family supply over the last month:

  1. Phoenix 85034 - up 67%
  2. Mesa 85208 - up 52%
  3. Phoenix 85033 - up 46%
  4. Waddell 85355 - up 32%
  5. Phoenix 85009 - up 29%
  6. Sun City 85373 - up 28%
  7. Phoenix 85045 - up 28%
  8. Phoenix 85024 - up 28%
  9. Sun City 85351 - up 25%
  10. Gilbert 85233 - up 25%

October 1 - In most segments of the market we start October with more active listings than we started September. That is usual most years but given how steep the decline in supply had been between March and September, it was not a certainty in 2019. In addition the situation is not universal. For some areas supply is even scarcer now than last month while for others supply has increased significantly..

Here are examples of the ZIP Codes where single-family supply has declined even further between September and October:

  1. Phoenix 85053 - down 40%
  2. Mesa 85201 - down 39%
  3. Black Canyon City 85324 - down 36%
  4. El Mirage 85335 - down 27%
  5. Phoenix 85027 - down 24%
  6. Apache Junction 85120 - down 22%
  7. Phoenix 85032 - down 20%
  8. Phoenix 85044 - down 20%
  9. Mesa 85202 - down 19%
  10. Phoenix 85054 - down 19%

These are based on active listing counts excluding those in UCB and CCBS status.


September 30 - The days of inventory reading is one of our favorite mechanisms for measuring the balance in the market between supply and demand. In a balanced market, for all areas & types in the ARMLS database, somewhere between 120 and 150 days is normal. Higher than 150 represents a buyer's market and lower than 120 represents a seller's market.

Below is the weekly chart for the last 5 years.

We can see that for the first half of 2019, days of inventory was higher than in 2018 but well below 120. Since the crossover point in July, 2019 has favored sellers more strongly than 2018.

We can also see the sudden change in direction at the beginning of September, as days of inventory rose from 66 to 68. However this is a very minor change compared with the balanced zone of 120 to 150 days. It will be difficult to detect any difference between 66 and 68 out there in the market. For buyers the good news is that at least inventory has stopped going down. In fact it is likely to rise until we reach mid to late November, when another downward trend is to be expected.

September 26 - The Cromford® Market Index values for the single-family markets in the 17 largest cities are featured in the chart below:

Here we see 11 cities improved for sellers over the past month while 6 cities moved in favor of buyers. The overall average was a shift of 1.5% in favor of sellers, well below the 4.8% we saw last week.

Generally we see supply starting to move higher, as is normal for the time of year, but demand is remaining stronger than usual for the season.

Because we have experienced low supply for a long time, we have become quite used to it. However the current situation represents a very unbalanced market with a strong advantage for sellers.

Despite the fact that there is very little movement on average, some cities are changing a great deal. Tempe is up 22% while Cave Creek is down 15%

September 25 - Judging from the building permit numbers for August it appears that multi-family construction is booming while single-family is merely treading water. You can see all the details in our permit charts within the Cromford® Public section of the site.

September 24 - The S&P Case-Shiller® Home Price Index® was released today for July 2019. It covers sales between May 1 and July 31.

Here are the month to month changes:

  1. Cleveland +1.11%
  2. Minneapolis +0.74%
  3. Phoenix +0.72%
  4. San Diego +0.69%
  5. Portland +0.67%
  6. Las Vegas +0.65%
  7. Tampa +0.40%
  8. Chicago +0.37%
  9. Miami +0.34%
  10. Charlotte +0.27%
  11. Detroit +0.23%
  12. Seattle +0.23%
  13. Dallas +0.22%
  14. Boston +0.19%
  15. Atlanta +0.09%
  16. Denver +0.05%
  17. San Francisco +0.00%
  18. New York -0.06%
  19. Washington -0.12%
  20. Los Angeles -0.29%

The national average was +0.39%. Phoenix rose one place from 4th to 3rd in this table.

The year over year changes were as follows:

  1. Phoenix +5.8%
  2. Las Vegas +4.7%
  3. Charlotte +4.6%
  4. Tampa +4.5%
  5. Minneapolis +4.2%
  6. Detroit +4.1%
  7. Atlanta +4.0%
  8. Boston +3.9%
  9. Cleveland +3.2%
  10. Denver +3.1%
  11. Miami +2.7%
  12. Washington +2.7%
  13. Dallas +2.7%
  14. Portland +2.5%
  15. San Diego +2.0%
  16. Chicago +1.6%
  17. Los Angeles +1.1%
  18. New York +0.9%
  19. San Francisco +0.2%
  20. Seattle -0.6%

The national average was 3.2%. Phoenix extended its lead at the top of the table.

September 23 - Echoes of 2004 and 2005 are being heard. We are now seeing flips of new homes among the recorded deeds.

This is a sign of an extreme seller's market and far from normal. The following homes were recently sold:

  • 221 E Wisteria Dr, Chandler
  • 231 E Wisteria Dr, Chandler
  • 271 E Wisteria Dr, Chandler

The builder was Mattamy Homes and surely it cannot have escaped their notice that the same individual bought all 3 homes. All 3 were quickly resold to third parties with gross margins of $40,000 on each one. These were not cheap homes either, all were resold for over $500,000.

When people buy new homes to flip instead of live in, I regard it as a red flag for the market. In 2004 there were hundreds of red flags and it did not end well.

Thanks to Tom Ruff for bringing these deeds to my attention.

September 19 - It is time to take another look at the Cromford® Market Index values for the 17 largest cities and their single-family markets:

The average rate of increase in the CMI has dropped from 7.7% last week to 4.8% this week.

We now have 3 cities showing deterioration for sellers, one of them quite severe (Cave Creek).

Tempe is still going gang busters, belatedly joining its east valley cousins in the upper echelons. Scottsdale and Gilbert are still seeing improvements over 10% but the rest of the table is starting to look more ordinary, at least in terms of percentage changes.

It is far from ordinary in absolute terms. Normal is 100, so the worst performer is still way above normal and 9 cities are over 200 which is highly unusual.

It is still a strong sellers market, but it is no longer getting even more unbalanced at a crazy pace, which is what happened during the previous 4 months.

September 18 - We are seeing an upward trend in active listing counts at last, bringing a little more choice to buyers, but the effect is small and patchy. Considering single-family listings that are not under contract:

There are fewer active listings as of September 17 than 2 weeks ago on September 3 in

  • Mesa (607 versus 615)
  • Peoria (461 versus 486)
  • Queen Creek (527 versus 530)
  • Avondale (87 versus 91)
  • Glendale (391 versus 395)
  • Tempe (127 versus 135)

There are more active listings in

  • Phoenix (2,149 versus 2,089)
  • Scottsdale (1,238 versus 1,222)
  • Maricopa (310 versus 286)
  • Buckeye (384 versus 333)
  • Cave Creek (202 versus 187)
  • Fountain Hills (140 versus 135)
  • Paradise Valley (242 versus 225)
  • Chandler (409 versus 377)
  • Gilbert (441 versus 440)
  • Surprise (453 versus 417)
  • Goodyear (339 versus 314)

So there are still 6 major cities with fewer active listings than 2 weeks ago despite the overall trend. The rise in active listings is most pronounced in Buckeye (up 15%), with healthy growth of 8% or so in Maricopa, Cave Creek, Paradise Valley, Chandler, Surprise and Goodyear.

September 17 - After 2 weeks of September we see that the closed listing count is 3,008 for Greater Phoenix. This is higher than 2,930 that we measured in 2018, but only by 2.7%. During the first week the difference was 6.7% so it appears that the 2019 advantage is fading a little.

New listings totalled 4,108 which is 4% below the 2019 count of 4,275. New supply is still below last year but at this time of year we see lower rates of listings going under contract, so supply tends to increase anyway. What we do not see is a sudden increase in new listings. This is what signals a turn in the market - just as it did in the second quarter of 2005.

September 16 - I am seeing a few media articles referring to the housing crash as taking place in 2009-2011. This is incorrect. The first signs of the crash (though noted by very few) were visible in 2Q 2005. The market was deteriorating quickly from that point and started to turn very nasty by 3Q 2006. 2007 and 2008 were the most dreadful years for housing. By 2Q 2009 the market was in recovery mode, although clearing the backlog of foreclosed homes took a long time and prices did not start to take off again until the latter part of 2011.

September 15 - When the market changes direction, the sequence of events is as follows:

  1. The Cromford® Market Index changes direction
  2. The average $/SF for active listings changes direction
  3. The average $/SF for listings under contract changes direction
  4. The short term (e.g. monthly) average $/SF for closed listings changes direction
  5. The long term (e.g. annual) average $/SF for closed listings changes direction

This generally happens over a period of 9 to 15 months in total.

We have seen a big example of number 1 in the list above over the past 7 months. We are now witnessing item 2 coming into effect.

Normally the average $/SF for active listings slumps during the third quarter. The fact that it did not do this in 2019 is a striking indicator of strength. The last 2 weeks have seen a distinct move upward. Coupled with the normal seasonal trend we expect to see strong upward movement in this measure over the rest of 2019.

Buyers may be encouraged that the active listing count has started to rise at last, as it usually does in September every year. However they will be dismayed to see the prices on the new listings being added. Homes are now getting more expensive at a faster rate.

September 13 - Comparing supply and demand with this time last year we see the following changes for the single-family markets:

City Active Listings excluding UCB & CCBS Sales per Month Listings Under Contract
Phoenix -25.7% +5.5% +11.2%
Mesa -29.3% +6.1% +12.5%
Scottsdale -17.6% +8.2% +6.9%
Chandler -18.4% +3.2% -4.7%
Glendale -26.5% +25.0% +8.0%
Gilbert -21.7% -4.5% +12.7%
Surprise -18.3% +27.4% +19.8%
Peoria -31.9% +27.5% +8.4%
Queen Creek -6.2% +36.3% +47.7%
Avondale -43.2% +19.8% +18.8%
Tempe -34.6% +0.0% -10.7%
Goodyear -6.8% +40.1% -1.3%

Supply is down everywhere, most obviously in Avondale, Tempe and Peoria. Goodyear and Queen Creek are least affected by this trend.

The monthly sales rate is up everywhere except Gilbert and Tempe. It is up most dramatically in Goodyear and Queen Creek. This is no doubt because these 2 cities have supply that has stayed relatively good.

Listings under contract are mostly higher, but not in Tempe, Chandler or Goodyear. The most dramatic increases are in Queen Creek, Surprise and Avondale.

We can see now why Avondale has been top of our weekly CMI chart for many months - supply is appallingly low and demand high. Most other cities have strong demand but the main factor is very low supply. The exceptions are Goodyear and Queen Creek where supply is well below normal but more freely available than the other cities. Here it is a sharp increase in demand that has been powering their CMI higher.

September 12 - The Cromford® Market Index values for the single-family markets in the 17 largest cities are shown in the table below:

Although broadly positive for sellers this is not as strong a picture as we saw last week. For one thing we have the first red circle for several weeks - shame on you Cave Creek - it was you last time too.

The average monthly change in CMI is an increase of 7.7%. This is down from 9.9% last week.

We only have 4 cities increasing by 10% or more - Tempe, Gilbert, Scottsdale and Maricopa.

Several cities in our list have actually seen their CMI decline over the last week as inventories start to rise (as they usually do in September). These include Avondale, Buckeye, Cave Creek, Chandler, Glendale and Peoria.

Among the secondary cities Anthem, Arizona City, Gold Canyon, Laveen and Sun City West all saw their CMI decline since September 5.

The market remains heavily out of balance in favor of sellers, but there is now little to no increase in the imbalance. It would be entirely normal to see a gentle fall in the CMI over the next 2 months because supply always strengthens between September and the end of November before falling again in December.

September 10 - At this point we are seeing a sudden change in the Cromford® Market Index. It has reached a plateau just above 200 and is now seeking a new direction.

Demand has stabilized at some 7% above normal. Normally we expect to see supply increase between early September and Thanksgiving and although new listings remain weaker than last year we expect a slight upward trend in the number of active listings. However supply is currently about 47% below normal, so a slight increase will not change things very much. We would need roughly 29,000 active listings to get back to normal, rather than the 15,000 we actually have.

This means we should expect the CMI chart to drift lower over the next couple of months. Does this mean the market is weak? Not at all. Remember that 100 represents a balanced market where prices should rise at the same rate as general inflation. At 203 the CMI is more than double its normal value. Sellers remain in charge but their advantage is no longer increasing. This is the point where pricing is expected to start reacting to the rise in CMI that we have seen over the past 6 months.

September 9 - Based on affidavits of value filed during August we have collected the following counts of iBuyer activity:

  Opendoor OfferPad Zillow Knock All iBuyers Combined
Homes Purchased in August 2019 370 110 72 8 560
Homes Purchased in August 2018 289 118 44 0 461
Annual Change in purchases +28% -7% +64%   +24%
Homes Sold in August 2019 373 105 141 2 535
Homes Sold in August 2018 291 109 15 0 355
Annual Change in Sales +28% -4% +840%   +50%
Median Purchase Price in August 2019 $243,150 $259,581 $270,700 $388,500 $253,635
Median Purchase Price in August 2018 $235,100 $227,568 $324,150   $236,311
Median Sale Price in August 2019 $250,000 $239,900 $299,900 $479,998 $255,000
Median Sale Price in August 2018 $246,000 $234,900 $315.000   $245,000
Homes in Inventory at the End of August 1,001 440 282   1,723

Note that we have included Knock for the first time this month. They have been active since April and have purchased 25 homes over 5 months, selling 7 of these on.

Zillow sold almost twice as many homes as it purchased. Although the sales number is its highest yet, its purchase count of 72 is the lowest since September 2018. It is clearly trying to focus on the lower price points these days and supply is very tight and competition for homes is intense from all kinds of buyers. Zillow's inventory is now rather low - only 2 months worth at the current sales rate and the lowest it has been since December 2018.

Opendoor is managing to achieve a 28% annual growth rate on both sales and purchases. They hold 2.8 months of inventory. OfferPad is struggling to maintain the volumes they achieved in 2018. Annual growth is slightly negative. They hold about 4 months of inventory

September 5 - Our regular weekly feature - the CMI table for the 17 largest cities and their single-family markets - is shows below:

The housing market is still getting better for sellers and worse for buyers in all 17 cities. The only silver lining for buyers is that the average CMI increase was 9.9%, down from 11.9% last week.

A handful of cities have seen cooling over the last week. These include Cave Creek and Glendale, the weakest last week, but the handful also includes the mighty Avondale which has had an unexpected surge in active listings from 72 to 92. Peoria and Chandler can also be added to the list of cities whose CMI fell over the past 7 days. In contrast Tempe and Scottsdale have shown additional upward momentum.

The overall picture remains that of a very strong seller's market with demand above average and supply far below normal.

September 4 - The market is suffering a severe shortage of inventory, so let us take a look at which price ranges are most affected. To do this we are using the Tableau chart.

This shows the Months of Supply excluding any UCB or CCBS listings. Months of Supply is a very seasonal measure but if we compare the number for August 31, 2019 with that for September 1, 2018 we eliminate any seasonal effect. We have included all dwelling types within Greater Phoenix.

Here is the result:

Price Range Months of Supply 2019 Months of Supply 2018 Change
Under $200K 0.9 0.9 none
$200K-$250K 0.7 1.2 down 42%
$250K-$300K 0.8 1.6 down 50%
$300K-$400K 1.2 2.1 down 43%
$400K-$600K 1.8 2.5 down 28%
$600K-$1M 3.2 4.1 down 22%
Over $1M 8.9 8.7 up 2%

The supply shortage extends up to $1 million but the price ranges that are most affected are those between $200K and $400K, with that between $250K and $300K (around the median sales price) down the most.

A normal figure for months of supply would be between 4 and 5, so 2018 was already quite tight. Supply remains relatively plentiful above $1 million, depending more on how picky the buyer is willing to be.

September 3 - Another chart illustrating the sudden surge in average price per square foot for pending listings:

September 2 - We are starting to see some perkiness in the average $/SF for listings under contact, especially those in pending status.

This could be a sign of the move in home pricing that is likely to follow the big upward move in the Cromford® Market Index over the past 4 months.

Chart includes condos and single family homes in Chandler, Gilbert, Mesa, Queen Creek, and Tempe that are under contract.


August 31 - Is anyone still interested in foreclosures? Ten years ago it was the number one topic as the state reeled from the after effects of the real estate bubble bursting. Almost everyone believed in "shadow inventory", a concept introduced by analysts who did not do their research accurately and because it sounded so ominous, lapped up by the media. The so called shadow inventory was a hoax, though not a deliberate one. It shows how easy it can be to jump to wrong conclusions if you base research on bad data or incorrect assumptions about how foreclosures work.

We still have no shadow inventory but foreclosures are happening. In Maricopa County during August 2019 there were 450 Notices of Trustee Sale (NOTS) and 110 Trustee Deeds (TD) recorded. These are low numbers, particularly for a month like August which contained the maximum number of working days (23). Trustees do not work on weekends, so the number of working days is what counts, not the number of calendar days. These numbers are for all property types, including commercial and vacant land.

110 trustee deeds can be compared with the highest monthly total of 5,449, recorded in March 2010.

450 NOTS can be compared with the highest monthly total of 10,712, recorded in March 2009.

So we see that foreclosures still take place but they are now a tiny part of the market, representing less than 1% of the transactions that occur in Maricopa County.

August 29 - The table below shows the Cromford Market Index for the single-family markets in the 17 largest cities;

Another week with all 17 cities showing improvement from a seller's perspective compared with a month ago.

The average change in CMI was +11.8%, down from +12.3%, so we see the slightest hint that the market is no longer accelerating. It is however still moving very fast in favor of sellers (and consequently higher pricing).

So many areas stand out - Avondale, Tempe, Scottsdale, Maricopa, Buckeye, Gilbert - all improved by 15% or more.

The slowest movers in the last week were Glendale and Cave Creek. A couple of months back Tempe was the slowest mover but it has now got with the program and is heating up quickly.

August 28 - Phoenix appears in the headlines regarding the S&P / Case-Shiller® Home Price Index® this month.

The latest numbers are based on sales that closed during the 3 months April to June 2019, so they are a bit dated by the time they are published. The month to month changes for the 20 focus cities are as follows:

  1. Detroit +1.24%
  2. Minneapolis +1.13%
  3. Boston +1.07%
  4. Phoenix +0.88%
  5. Cleveland +0.83%
  6. Chicago +0.74%
  7. San Diego +0.68%
  8. Portland +0.66%
  9. Charlotte +0.61%
  10. Seattle +0.56%
  11. Atlanta +0.52%
  12. Las Vegas +0.50%
  13. Washington +0.48%
  14. Dallas +0.44%
  15. Denver +0.42%
  16. San Francisco +0.22%
  17. Tampa +0.20%
  18. Los Angeles +0.16%
  19. Miami +0.09%
  20. New York -0.33%

Phoenix ranks 4th in this list, up from 11th last month. The national average change was +0.58%

The year over year numbers are as follows:

  1. Phoenix +5.8%
  2. Las Vegas +5.5%
  3. Tampa +4.7%
  4. Charlotte +4.5%
  5. Atlanta +4.5%
  6. Detroit +4.2%
  7. Boston +3.9%
  8. Minneapolis +3.9%
  9. Cleveland +3.4%
  10. Denver +3.4%
  11. Washington +2.9%
  12. Miami +2.8%
  13. Dallas +2.7%
  14. Portland +2.4%
  15. Los Angeles +1.6%
  16. Chicago +1.5%
  17. San Diego +1.3%
  18. New York +1.1%
  19. San Francisco +0.7%
  20. Seattle -1.3%

The national average was +3.1%.

Now we see why Phoenix hit the headlines. It took over the number one spot from Las Vegas in the year over year table.

August 26 - Year-to-date single-family permits hit 14,321 for Maricopa and Pinal counties as of the end of July. This is up from 2018, but only just. The annual growth of 3% is hardly going to have much impact on the dire shortage of homes for sale. Now if by some magic we could get to 21,777, the figure for 1998, then we could expect some relief for sellers. However home builders face huge obstacles in getting back to the heyday of 1998-2006 even though demand is certainly there.

August 24 - There were 5,152 closed listings across Greater Phoenix (all dwelling types) during the first 3 weeks of August. This is up from 4,705 in the same period last year, a rise of almost 10%.

It is not the highest number of closings we have ever seen for this period. That was in 2005 when we counted 5,557. However it is the second highest total we have ever recorded. Demand remains unusually strong in Phoenix this summer.

August 23 - Measuring the number of new listings for the first 3 weeks of August gives us a total of 5,935 across Greater Phoenix (all types). The equivalent measurement in 2018 was 6,356, so we are down almost 7%.

This is not the lowest number of new listings we have seen for the period - there were only 5,623 in 2014 - but it is the second lowest since we started measurements in 2001.

August 22 - It is time to publish the weekly table showing the Cromford® Market Index for the single-family markets in the 17 largest cities:

Sellers can celebrate:

  • all 17 cities became more favorable for sellers over the past month
  • we have almost half the 17 cities over 200
  • no city is under 150
  • the smallest percentage improvement was 3% (Cave Creek) - still pretty good
  • 11 cities improved by 12% or more

There is almost no good news for buyers that I can find, except perhaps that the average change in CMI was +12.3%, down very slightly from +12.6% last week. Even 12.3% is an enormous number by normal standards.

I must stress again that this tremendous imbalance between supply and demand is very likely to result in faster increases in sales prices in due course. However we must expect a time delay with the effect likely to be noticeable during the fourth quarter and becoming more significant during the first half of 2020. Once prices have increased sufficiently then we can expect a cooling of demand will follow and the market will start to move towards balance again. No market can stay unbalanced indefinitely.

August 19 - Although the shortage of active listings is pretty widespread, it does not affect everywhere. Probably the most obvious example of a location with a strong supply of homes for sale is Casa Grande. Here is the chart:

Here we see far more homes available than last year and a flat trend for active counts since last December. With a population of around 56,000, Casa Grande is far smaller than Avondale with about 86,000 inhabitants. Yet Casa Grande has 279 single-family homes available for purchase on ARMLS, whereas poor Avondale only has 71.

August 17 - The active listings chart for Scottsdale looks quite different from Phoenix:

The general shape in 2019 is very similar to 2018. However it has stayed lower than last year at all stages, with the gap reaching its largest amount in the last 3 weeks. The chart for Fountain Hills has the same basic shape.

Paradise Valley is similar, except that 2019 and 2018 have been running neck and neck until 2 weeks ago.

Cave Creek is fairly similar to Scottsdale, although levels have been significantly below last year at all times and the gap is starting to narrow.

August 16 - I cannot stress enough how unusual the active listing counts look this year, collapsing after hitting a peak at the beginning of March. In February it looked like we would have far more supply than last year but the situation has changed dramatically since then. I would like to take a look at the single-family charts for various cities to illustrate what I mean. These charts all exclude UCB and CCBS listings from the counts.

Here is Phoenix:

We note how listing counts were rising last year from April through top November. The opposite trend is taking place in 2019.

Many cities show similar patterns to the Phoenix chart, including Mesa, Peoria and Glendale. However other cities have their own messages and we will look at those in subsequent posts.

August 15 - The Cromford® Market Index table for this week shows a full house:

All 17 cities swung in favor of sellers over the last month. We have no city below 150 and 7 above 200. This is extraordinary.

3 cities improved by more than 20% and another 9 improved by more than 10%.

Buyers may be liking the interest rates, but the lack of available inventory is a nightmare for them. No doubt many will turn to the new home market which has seen surprisingly stable pricing under these circumstances.

The average change in CMI was +12.6%, up slightly from 12.5% last week.

At some point this trend in favor of sellers has to change direction, but there is scant evidence of that at the moment.

August 12 - There were 1,527 closed listings during the first week of August, measured for all types across Greater Phoenix. This is a strong reading once again, up from 1,435 last year. We have to go back to the bubble year of 2005 to find a higher number (1,597).

With new listings at a low ebb and closings at a high, this is the most unbalanced market we have seen in favor of sellers since 2005. However pricing has yet to respond, perfectly illustrating the time delay inherent in price movements in reaction to big changes in supply and demand. In 2Q 2005 it took 15 months between the CMI falling from its peak and pricing following suit (in 3Q 2006).

August 11 - The first 7 days of August saw 2,002 new listings activated across Greater Phoenix. This is down from 2,163 last year and the second lowest total for the first week of August since we started collecting data in 2001. The only year with fewer new listings was 2014. The highest total for this week was in 2006 when we saw a staggering 3,654 new listings, a clear sign of the problems looming over the market prior to the crash

August 9 - The Cromford® Market Index for the single-family markets in the 17 largest cities is shown below:

The market is still heating up with the average monthly change in CMI at 12.5%, up from 12.1% last week.

Only Cave Creek cooled, and then only by a very small amount (0.5). The remaining 16 cities improved for sellers. 12 improved by 10% or more.

We have 7 cities over 200 and only one below 150.

The market favors sellers to greatest degree since August 2005.

August 8 - Based on affidavits of value filed during July we have collected the following counts of iBuyer activity:

  Opendoor OfferPad Zillow All iBuyers Combined
Homes Purchased in July 2019 364 86 78 529
Homes Purchased in July 2018 295 98 31 424
Annual Change in purchases +24% -12% +152% +25%
Homes Sold in June 2019 350 71 114 535
Homes Sold in June 2018 245 104 6 355
Annual Change in Sales +43% -32% +1800% +51%
Median Purchase Price in July 2019 $234,950 $244,024 $275,700 $242,350
Median Purchase Price in July 2018 $238,900 $229,412 $320,000 $240,250
Median Sale Price in July 2019 $250,000 $249,900 $298,875 $255,000
Median Sale Price in July 2018 $255,000 $241,500 $259.450 $252,500
Homes in Inventory at the End of June 1,004 445 351 1,800

iBuyers purchased almost as many homes as they sold in July leaving inventory close to the same level as last month.

We can see significant growth in iBuyer activity compared to this time last year, a 25% increase in purchases and a 51% rise in sales. In recent months, Opendoor has consolidated its position as the dominant player while OfferPad and Zillow have experienced little change in volumes since the beginning of 2019.

August 6 - Multi-family permits had been in a declining trend between October and March, but came back with a bang during the second quarter. We now see 5,653 permits at the half-way mark of 2019, the highest total since 2007 and up from 4,481 last year.

The second quarter of 2019 was by far the strongest quarter for multi-family permits since we started recording them in 2002.


August 5 - At the half-way mark, 2019 has produced 12,028 single-family permits across Maricopa and Pinal counties, according to the US Census Bureau. This is slightly ahead of 2018 when they reported 11,753. In fact it exceeds all years since 2007, but is nowhere near the quantities seen between 1996 and 2007. It is no wonder we are experiencing a shortage of housing supply. There was no sign of acceleration during the second quarter with 6,438 permits, down from 6,604 last year.

It seems likely that permit counts will start growing again during the second half of 2019 given the surge in demand. With resale homes in very short supply, more buyers are turning their attention to new homes. At least you don't have a bidding war to contend with when you buy new, though unless you are prepared to take a spec, you may have a relatively long wait for completion.

August 4 - There is now doubt that the market is a lot hotter than it was this time last year. If we use the Contract Ratio to compare the various price ranges we get the following numbers for the single-family market within Greater Phoenix:

Price Range Contract Ratio Aug 1, 2019 Contract Ratio Aug 1, 2018 Change
Under $100K 44.8 66.7 -33%
$100K - $125K 114.3 65.7 +74%
$125K - $150K 134.7 173.6 -22%
$150K - $175K 128.4 237.9 -46%
$175K - $200K 147.9 133.7 +11%
$200K - $225K 182.5 110.8 +65%
$225K - $250K 171.1 95.0 +80%
$250K - $275K 145.6 83.9 +74%
$275K - $300K 129.6 73.6 +76%
$300K - $350K 98.5 65.7 +50%
$350K - $400K 80.9 58.3 +39%
$400K - $500K 70.5 50.4 +40%
$500K - $600K 53.1 43.3 +23%
$600K - $800K 43.9 41.2 +7%
$800K - $1M 37.6 27.4 +37%
$1M - $1.5M 24.7 26.0 -5%
$1.5M - $2M 15.3 15.0 +2%
$2M - $3M 13.8 16.4 -16%
Over $3M 9.5 7.0 +36%

The market between $200K and $500K is the most dramatically affected with fewer active listings and more listing under contract. This price range accounts for 65% of the market by dollar volume and 78% by unit counts.

The luxury market is more patchy, but the ranges between $600K and $1M and over $3M are significantly improved for sellers compared with last year.

August 1 - The Cromford® Market Index values for the single-family markets in the 17 largest cities by dollar volume are as follows:

This is an astonishing situation. CMI values were already very high last month but they have increased by an average of 12.1% since July 1. Only Cave Creek showed slight cooling and Glendale increased by just 2%. The other 15 cities jumped by 8% or more.

We have 7 cities over 200 and the 6 cities at the bottom of the table all increased their CMI by at least 10%. We note that the least expensive cities (Maricopa, Buckeye, Queen Creek, Avondale, Surprise) rose by very large percentages reflecting the strength of the market under $300,000. However the 3 most expensive cities (Paradise Valley, Scottsdale, Fountain Hills) posted gains of 13% to 15% too.

Given that July is usually a month where the market is coasting, this is a remarkable shift in favor of sellers.

The issue underlying these changes is lack of supply. Demand has not changed very much over the last month, but supply has crashed. The reason is not hard to find. There are simply too few listings coming onto the market. July 2019 gave us the lowest count of new listings across Greater Phoenix that we have ever recorded for any July since we began keeping records in 2001. Because this followed a June with very weak new listing counts, we are seeing a failure to replace the homes that have been sold. Agents are hunting for new listings, iBuyers are trying hard to attract sellers and investors are campaigning intensely for everyone to sell them their homes. Despite these effort, home owners are unmoved. Given the massive increase in the housing stock since 2001 it is amazing that we have fewer new listings in 2019 than in 2001.

Pricing has not yet responded to this imbalance in the market, but upward pressure is building. Pricing is a lagging indicator while the CMI is a leading indicator. The table above suggests that appreciation rates will increase over the next 12 months unless we see a massive increase in new supply.

July 2019


July 31 - The S&P / Case-Shiller® Home Price Index® numbers were published yesterday. These cover sales for the months of March through May 2019.

The month to month changes looked like this:

  1. Minneapolis +1.71%
  2. Cleveland +1.40%
  3. Detroit +1.16%
  4. Portland +1.03%
  5. San Diego +0.99%
  6. Charlotte +0.99%
  7. Seattle +0.98%
  8. Los Angeles +0.84%
  9. Chicago +0.81%
  10. Atlanta + 0.74%
  11. Phoenix +0.74%
  12. Washington +0.69%
  13. Las Vegas +0.62%
  14. Denver +0.56%
  15. Dallas +0.51%
  16. Boston +0.51%
  17. San Francisco +0.27%
  18. Miami +0.18%
  19. Tampa +0.12%
  20. New York +0.05%

The national average was a strong +0.84% and Phoenix was slightly below that in the middle of the table. The national media appears to be very late in figuring out that the housing market is seeing a recovery and because the HPI is published very late compared with the period it is measuring, it may be some time before they catch up.

The year over year numbers are as follows:

  1. Las Vegas +6.4%
  2. Phoenix +5.7%
  3. Tampa +5.1%
  4. Atlanta +4.7%
  5. Charlotte +4.5%
  6. Detroit +4.0%
  7. Cleveland +3.6%
  8. Minneapolis +3.6%
  9. Boston +3.6%
  10. Denver +3.6%
  11. Miami +3.3%
  12. Washington +2.9%
  13. Dallas +2.6%
  14. Portland +2.4%
  15. Los Angeles +1.9%
  16. New York +1.9%
  17. Chicago +1.6%
  18. San Diego +1.3%
  19. San Francisco +1.0%
  20. Seattle -1.2%

The national average was +3.4%. Phoenix was second only to Las Vegas and far out-performed the national average.

July 15 - Mike is on vacation (cruising the Mediterranean) for the next 2 weeks so observations will become much scarcer until his return on July 30. Normal service will be resumed on July 31.

July 14 - After falling below 2 months for a couple of weeks, our months of supply measurement is back to 2.1 months, as seen in the chart below:

This is not because the number of active listings is increasing, but because the sales rate is falling, as it does every year once the second quarter is over.

2.1 months for all areas & types is a very low figure by long term standards, especially because active listings in UCB and CCBS status are included in this count. If we narrow the area down to Greater Phoenix, the reading drops to 1.9. If we then exclude the CCBS and UCB listings we have just 1.4 months. The last time we had readings this low was in the second quarter of 2012.

We also know that supply is much tighter in the lower price ranges than for luxury homes. Below $500,000 we have just 1.1 months of supply. For homes priced at $500,000 and above we have 3.8 months of supply. However, this is also unusually low - the lowest reading since 2005.

July 11 - The Cromford® Market Index table below covers the single-family markets in the 17 largest cities.

We now have 2 cities showing a move in favor of buyers over the last month and 15 moving in favor of sellers. You might be forgiven for thinking that this makes the table less favorable for sellers than last week. You would be wrong however, as the average change in CMI is 9.4%, up from 9.0% last week.

We have a large number of cities moving a great deal in favor of sellers - Queen Creek, Fountain Hills, Paradise Valley, Goodyear, Avondale, Chandler, Surprise and Peoria are all in double figures. We have 5 cities over 200 and no cities under 130.

This is now an exceptionally strong market with no sign at all of the weakness we were seeing between September and February.

July 10 - Based on affidavits of value filed during June we have collected the following counts of iBuyer activity:

  Opendoor OfferPad Zillow All iBuyers Combined
Homes Purchased in June 2019 309 84 112 505
Homes Purchased in June 2018 297 115 16 411
Annual Change in purchases +4% -27% +600% +18%
Homes Sold in June 2019 280 96 111 487
Homes Sold in June 2018 256 106 0 362
Annual Change in Sales +9% -9% N/A +35%
Median Purchase Price in June 2019 $244,800 $219,174 $305,000 $248,000
Median Purchase Price in June 2018 $240,300 $223,000 $335,000 $235,000
Median Sale Price in June 2019 $250,000 $241,500 $309,900 $259,000
Median Sale Price in June 2018 $245,250 $231,000 N/A $242,000
Homes in Inventory at the End of June 990 420 387 1,797

iBuyers purchased slightly more homes than they sold in May.

We can still see significant growth in iBuyer activity compared to this time last year. However growth since the beginning of 2019 has been very limited. Given that the re-sale market has been very strong in May and June, the iBuyers have lost some market share over the last 2 months. They represented 4.8% of May purchases, lower than the 4.9% they achieved in August 2018 and a lot lower than the peak of 6.9% that they achieved in December 2019. They achieved a 4.9% share of sales in May, equal to their September 2018 share and down from the peak of 6.3% which was hit in March 2019. We cannot give you the percentage of June sales because we do not yet have figures for the total market sales. However we estimate 3% share for Opendoor, around 1% for Zillow and a little below 1% for OfferPad, making just below 5% in all.

Breaking consistently through the 5% market share appears to be proving a little difficult, though whether this is entirely due to the decreasing supply of homes below $300,000 or other factors we cannot say. Certainly the chosen market price range for Opendoor and OfferPad is shrinking fast. Since Zillow tends to target slightly higher price ranges that is slightly less of a constraint for them. Homes below $225,000 are becoming scarce and this scarcity is rapidly spreading up towards $300,000.

iBuyers have a larger share of inventory - 1,797 represents a very significant number, given that we only have 9369 active listings below $500,000 on ARMLS (excluding UCB and CCBS). The iBuyer inventory does include homes that are under contract but have not yet closed. So if we include the listings under contract on ARMLS below $500,000 we get a total of 19,299.

iBuyers thus appear to hold roughly 9% of inventory under $500,000 excluding new homes and the (tiny) distressed market. Their share of inventory below $300,000 is higher still.

July 8 - We saw only 1,831 new listings added during the first week of July across all areas & types. This is down 8% from last year and continues the weak supply trend that started in June. This is unusual and is causing more problems for buyers. The gap between supply and demand is getting wider.

July 6 - For the last 8 weeks, the monthly sales rate has recorded new all-time records for the time of year. The closest rivals were the years 2005 and 2011.

You can see this here:

The current situation is remarkable given that, in mid February, 2019 was running lower than 8 of the earlier years (2005, 2010-2013, 2016-2018).

July 5 - The Cromford® Market Index table below shows the state of play in the single-family markets of the 17 largest cities within Greater Phoenix:

We still have 16 out 17 cities showing conditions becoming more favorable for sellers. The lone exception is Tempe which has slipped down the table to 14th.

Quite remarkably, the average change in CMI over the past month is 9.0%, up from 8.6% last week. Many cities are well over this 9% average, including Goodyear, Fountain Hills, Queen Creek, Paradise Valley, Chandler & Avondale.

We now have 4 cities over 200 and 7 cities over 190.

This is the greatest imbalance in favor of sellers that we have seen in almost 6 years.

July 4 - Active listing counts are still plummeting and they have been low for so long that it can be difficult to place them in proper context. We thought it would be instructive to compare current levels with peak levels and long term averages.

The figures below are for active single-family detached listings excluding UCB and CCBS listings:

City Active on July 3, 2019 Peak Level Long Term Average Level % Average
Avondale 108 1,116 379 28.5%
Buckeye 372 1,279 512 72.7%
Cave Creek 197 516 273 72.2%
Chandler 455 2,481 1,049 43.4%
Fountain Hills 157 531 264 59.5%
Gilbert 538 2,766 1,192 45.1%
Glendale 439 2,567 976 45.0%
Goodyear 383 1,300 581 65.9%
Maricopa 323 1,092 445 72.6%
Mesa 699 3,657 1,699 41.1%
Paradise Valley 272 579 336 81.0%
Peoria 568 2,073 939 60.5%
Phoenix 2,462 11,416 4,765 51.7%
Queen Creek 598 2,354 1,015 58.9%
Scottsdale 1,506 4,362 2,410 62.5%
Surprise 438 2,273 966 45.3%
Tempe 171 580 311 55.0%

We can see why Avondale so frequently tops the CMI table with an extremely low supply compared with its long term average.

Mesa, Chandler, Glendale, Gilbert and Surprise are all below 50% of their long term average,

July 2 - In June, the average monthly rent per sq. ft. was $1.01 for listings closed through ARMLS. This the first time we have recorded a figure over $1.

In June 2006 the average monthly rent was only 71 cents per sq. ft., so rents have increased by 42% since then. In comparison the average purchase price per sq. ft. has moved from $188.53 to $172.02 since June 2006, a fall of 9%.

So average rent has increased 42% while purchase prices have fallen 9% since June 2006 on a cost per sq. ft. basis.

No wonder most investors are feeling pleased with themselves. Tenants are not doing so well. Buying in 2006 or 2007 was obviously a bad idea, but since 2009 purchasing a home in Greater Phoenix has generally proven to be an excellent investment compared with renting.

July 1 - The housing market in Greater Phoenix is not content with just recovering from the slight air pocket in demand that occurred in 4Q 2018 and 1Q 2019. It is now setting up to be the hottest it has been since 2005, As an example we have just 1.9 months of supply across all areas & types as of July 1, 2019. This is the lowest number at the start of any month since October 2005.

1.9 months is a very low reading (4.5 months is normal) and what makes it even more surprising is that this supply includes listings in UCB or CCBS status, since they are theoretically open to new offers. If we exclude those UCB and CCBS listings, then the months of supply number drops to 1.6.

June 2019

June 30 - For an analyst, the housing market is more interesting now than it has been for at least 5 years. This is because it is doing things it does not usually do. For example, the average list price per sq. ft. for active listings usually declines quite a lot during the summer every year, staring around week 18. In 2019 the average is still increasing as late as week 26.

This is the chart that shows the effect, which is very striking:

To play with and study this chart in more depth please click here.

June 28 - This is the time of year when demand starts to fade and inventory begins to grow. However 2019 does not seem to have read the script and is playing it all wrong. Demand is staying quite high for the time being while inventory is dropping. This gives us the following table of Cromford Market Index scores for the 17 largest cities and their single-family markets:

The average change in CMI is 8.6%, similar to last week. These days the primary reason for the CMI rising is lower inventory levels. The flow of new listings has been unusually weak during June. Demand is little changed from last month but certainly stronger than last year at this time.

Only Tempe is holding out from the party with its 8% decline. Goodyear is having its best month for a very long time while Queen Creek is also accelerating. Paradise Valley, Chandler and Fountain Hills also improved much more than we would normally expect.

June 27 - Across all areas & types, closed listings on ARMLS are currently achieving 98% of final list price. This is the highest we h

June 28 - This is the time of year when demand starts to fade and inventory begins to grow. However 2019 does not seem to have read the script and is playing it all wrong. Demand is staying quite high for the time being while inventory is dropping. This gives us the following table of Cromford Market Index scores for the 17 largest cities and their single-family markets:

The average change in CMI is 8.6%, similar to last week. These days the primary reason for the CMI rising is lower inventory levels. The flow of new listings has been unusually weak during June. Demand is little changed from last month but certainly stronger than last year at this time.

Only Tempe is holding out from the party with its 8% decline. Goodyear is having its best month for a very long time while Queen Creek is also accelerating. Paradise Valley, Chandler and Fountain Hills also improved much more than we would normally expect.

ave seen for many years and confirms the strength of sellers' negotiation powers caused by the imbalance between very low supply and stronger than normal demand.

Here are the numbers for June 27 in prior years:

  • 2001 - 97.51%
  • 2002 - 97.26%
  • 2003 - 97.59%
  • 2004 - 98.10%
  • 2005 - 99.44%
  • 2006 - 97.21%
  • 2007 - 96.13%
  • 2008 - 95.28%
  • 2009 - 96.04%
  • 2010 - 96.07%
  • 2011 - 96.06%
  • 2012 - 97.67%
  • 2013 - 97.53%
  • 2014 - 96.93%
  • 2015 - 97.22%
  • 2016 - 97.48%
  • 2017 - 97.61%
  • 2018 - 97.89%
  • 2019 - 98.00%

June 26 - Despite the Greater Phoenix housing market making new record highs for sales volume and pricing, the national media greeted the S&P/Case-Shiller® Home Price Index® release for April 2019 with a surprisingly negative interpretation. I wonder how they would react if prices actually went down. Not much chance of that happening here any time soon, but here are the city rankings:

Month over month change:

  1. Boston +1.86%
  2. Detroit +1.62%
  3. San Francisco +1.59%
  4. Chicago +1.20%
  5. Portland +1.12%
  6. Seattle +1.06%
  7. Charlotte +1.01%
  8. Minneapolis +1.01%
  9. Los Angeles +0.99%
  10. Atlanta +0.98%
  11. Washington +0.90%
  12. Denver +0.80%
  13. Phoenix +0.78%
  14. Tampa +0.70%
  15. Cleveland +0.69%
  16. Dallas +0.63%
  17. Las Vegas +0.58%
  18. San Diego +0.50%
  19. Miami +0.14%
  20. New York 0.00%

These are big increases month to month and the US average was 0.93%. However the media described it as flat lining, preferring to focus on the Case-Shiller seasonally-adjusted numbers (which I consider close to meaningless). The non-seasonally adjusted numbers look strong and Phoenix could only manage 13th place and slightly below the national average.

Year over year change:

  1. Las Vegas +7.1%
  2. Phoenix +6.0%
  3. Tampa +5.6%
  4. Atlanta +4.9%
  5. Charlotte +4.2%
  6. Miami +3.9%
  7. Boston +3.9%
  8. Denver +3.8%
  9. Detroit +3.5%
  10. Cleveland +3.5%
  11. Minneapolis +3.0%
  12. Dallas +2.7%
  13. Washington +2.6%
  14. Portland +2.6%
  15. New York +2.1%
  16. Chicago +1.9%
  17. San Francisco +1.8%
  18. Los Angeles +1.5%
  19. San Diego +0.8%
  20. Seattle +0.0%

Phoenix is second only to Las Vegas in the year over year table and easily beat the national average of 3.5%.

I would also point out that most buyers from China have picked up their toys and headed for home over the past 2 years. This has certainly slowed the markets in New York, Los Angeles, Seattle and San Francisco. It has had hardly any discernible impact on Phoenix (or Las Vegas) because we did not have many Chinese buyers in the first place.

It really is strange how the press picks up a pretty robust set of numbers and turns them into bad news. Yes they are not showing double digit appreciation, but have we not learned that double digit appreciation is unhealthy over the long term?

June 25 - The number of new listings arriving in June is low compared to last year. A 3% drop may not sound like much but it can quickly make homes relatively scare in certain areas. One area that has been affected is Mesa:

With over 1,000 listings available and not under contract in January, Mesa is now approaching the 700 mark, lower than at any point in 2018. In fact it is lower than at any time since 2013.

For a city as large as Mesa (the 36th largest city in the USA by population), 700 active listings is nowhere near sufficient to keep buyers satisfied. 1,500 would be considered a normal number and we have not seen that many since 2014.

June 21 - Not only is demand continuing to strengthen compared with seasonal norms, supply is dropping faster than usual for the time of year. We can see this well in the volatile months of supply charts. Here is an example for single family homes in the city of Phoenix:

Note how we were far higher than 2018 and 2017 in February at 4.1 months, but between March and June supply has dropped sharply and is now lower than 2 months and well below 2018 and 2017. We are at the lowest point since June 2013, but remember that the 2013 market shocked us by deteriorating rapidly in the second half reaching 4.3 months by December. Below 1.9 months in Phoenix is low enough to be considered seriously imbalanced and buyers are facing tough times unless more supply comes along quickly.

June 20 - The market continues to improve for sellers at an astonishing rate, Here is the Cromford® Market Index table for the 17 largest cities:

Now we have only 1 city - Tempe - that is not improving for sellers, and it is still firmly in a seller's market at 147.7.

Maricopa has joined the program (up 1%) and the more expensive locations like Paradise Valley (up 16%), Scottsdale (up 11%) and Fountain Hills (up 12%) are rivaling the rest of the valley for the rate of improvement. This week the stars include Goodyear (up 17%), Avondale (up another 13%) and Surprise (up 12%).

The average CMI increase was 8.5%, up marginally from last week. In normal times an improvement of 7 or 8% would be considered excellent for sellers but at the moment it only gets your city less than half way up the table.

Market sentiment has shifted in a remarkable way since the first quarter.

June 18 - In most respects the market today is stronger than it was 12 months ago. Those measurements that indicate this include:

  • The Cromford® Market Index is 161.5 - up from 160.0
  • The Contract Ratio is 77.6 - up from 71.7
  • Average sales price as a percentage of list is 98.02% - up from 97.82%
  • Active listings excluding UCB & CCBS number 16,003 - down from 16,213
  • Sales per month is 9,626 - up from 9,534
  • Days on market for active listings is 95 - down from 97
  • Market Distress Index is 1.4 - down from 2.0
  • This weeks sales as percentage of long term average is 120.8% - up from 107.3%

There are still a few indicators that have not overtaken last year, but these tend to be the long term non-volatile measurements.

  • Days Inventory 82 versus 79
  • Listing Success Rate - 83.2% versus 83.6%
  • Days on Market for Monthly Sales - 65 versus 61

Prices are higher by 5 to 7% and dollar volume is at record levels.

The recovery is complete, so where do we go from here? We shall have to watch closely to find out.

June 16 - After 2 complete weeks have elapsed we can take a fair reading of how June is doing. It is good news for sellers once again. Closed listings are very strong as can be seen here.

Up from 3,540 last year to 4,019 across Greater Phoenix, which is an increase of 13.5%. This is also a long-term record high for the first 2 weeks of June in terms of both unit sales and dollar volume through ARMLS.

Additional good news for sellers appears when we examine the new listing counts here.

At the time of writing, we have seen only 4,229 so far in June, down from 4,750 last year. These numbers will change over the coming days as delayed listings are activated, but the difference between June 2018 and June 2019 is substantial.

The slow arrival of new listings and large number of closings will cause the Cromford Market Index to keep climbing over the next few weeks. It is normal for the number of listings under contract to decline during June so things should be a little quieter in July and August.

June 15 - The number of active listings on the market has been falling since mid-February. It has also been falling at a much faster rate than it did in 2018. The decline is not primarily due to a shortage of new listings. As of June 11 we had seen 0.45% more new listings than at the same point last year. The primary reason is the higher rate at which they have been going under contract, with the result that fewer homes are left for other people to buy.

  • Change in active listings without a contract, Feb 16 to Jun 15, 2019 = down 19.5%
  • .Change in active listings without a contract, Feb 16 to Jun 15, 2018 = down 9.5%

This drop in available supply has combined with the increased sales rate to drive the Cromford® Market Index up from 126.1 to 159.9 between Feb 16 and Jun 15. In 2018 it moved from 158.1 to 159.8 over the same period.

We note that the CMI is now slightly higher than last year but with a much steeper trajectory.

June 13 - You start to wonder how long this can continue, but the trend in favor of sellers keeps accelerating:

The average increase in CMI over the past month is 8.3%, eclipsing the 7.4% we saw last week. Tempe and Maricopa are still not cooperating, but the other 15 cities are really going for it.

Avondale is not only top of the table but its CMI rose the most (16%) as its inventory keeps demisang.

Surprise, Paradise Valley, Scottsdale, Gilbert, Phoenix, Goodyear and Fountain Hills all rose by more than 10%. Mesa, Buckeye, Chandler and Glendale are not far behind.

Inventory is falling faster now as new listings are arriving at a slower pace. The spring selling season is lasting longer than it did last year. We usually do not see so much demand once temperatures exceed 110 degrees. It seems buyers want to grab those low interest rates while they still can, even though there is a chance they might fall further.

The market is clearly stronger now than it was at this point last year.

June 12 - Based on affidavits of value filed during May we have collected the following counts of iBuyer activity:

  Opendoor OfferPad Zillow All iBuyers Combined
Homes Purchased in May 2019 340 100 101 541
Homes Purchased in May 2018 283 125 3 411
Annual Change in purchases +20% -20% +3267% +32%
Homes Sold in May 2019 322 111 119 552
Homes Sold in May 2018 260 89 0 349
Annual Change in Sales +24% +25% N/A +58%
Median Purchase Price in May 2019 $242,650 $233,356 $290,000 $245,251
Median Purchase Price in May 2018 $212,000 $228,600 $312,000 $231,000
Median Sale Price in May 2019 $249,000 $239,900 $300,000 $255,000
Median Sale Price in May 2018 $242,500 $240,000 N/A $240,000
Homes in Inventory at the End of May 961 432 386 1,779

iBuyers sold slightly more homes than they purchased in May.

Overall growth looks strong relative to 12 months ago, but there has been little change over the past several months Zillow appears to have reached a steady level at just over 100 purchases a month. OfferPad has stayed at roughly that same level for the last 2 years. Opendoor has been at the 250-300 level for most of the last 15 months, although May's total of 340 sets a new record for them. iBuyer purchase activity has been steady over the past 3 months while overall market activity has increased.

Market share of iBuyer purchases is approximately 5% for May, having peaked at almost 7% last December. Sales activity is also around 5% having peaked at just over 6% in March.

That 5% is split 3% to Opendoor, 1% to OfferPad and 1% to Zillow at the moment.

June 8 - June has a major drawback this year for those looking to see high sales counts. It starts and ends with a weekend, when title companies do not close escrows. Despite this disadvantage, the month has got off to a flying start during the first 7 days with 1,932 closed listings on ARMLS across Greater Phoenix. The same period last year gave us only 1,732 closings. So we are up almost 12% so far. This is enough to compensate for the 10% drop in working days compared to June 2018. Will the rest of June be this strong? Watch this space.

Not only does 1,932 closings represent a very large increase from last year, it is a record number for the first week of June.

June 6 - Although June is very likely to deliver lower volume numbers than May, the balance between buyers and sellers is swinging hard in favor of sellers.

Here to illustrate that is the table showing the Cromford® Market Index numbers for the single-family markets in the 17 largest cities:

15 of the 17 cities are swinging in favor of sellers and 7 of them by more than 10%. The average change is +7.4%, up from 5.9% last week.

Only 2 cities are refusing to join the party - Tempe & Maricopa. Both of them are seller's markets but they have cooled over the past month.

We note that Scottsdale and Buckeye are now improving strongly for sellers while Avondale, Mesa, Gilbert, Surprise & Phoenix are continuing the strong upward trends that have been in place for some time.

There is no little doubt that 2019 will overtake 2018 for its overall CMI rating very shortly.

June 5 - Dollar volume during May was the highest we have ever seen for ARMLS closings in a single month. The following ZIP codes saw huge increases in single-family dollar volume compared with May 2018:

  1. Glendale 85305 - up 196% ($5M)
  2. Glendale 85307 - up 182% ($5M)
  3. Goodyear 85395 - up 117% ($20M)
  4. Phoenix 85031 - up 95% ($3M)
  5. Phoenix 85019 - up 92% ($3M)
  6. Coolidge 85128 - up 88% ($2M)
  7. Scottsdale 85259 - up 87% ($29M)
  8. Phoenix 85053 - up 77% ($7M)
  9. Phoenix 85040 - up 69% ($5M)
  10. Youngtown 85363 - up 69% ($1M)
  11. Mesa 85215 - up 68% ($7M)
  12. New River 85087 - up 67% ($5M)
  13. Scottsdale 85266 - up 63% ($22M)
  14. Sun City 85351 - up 63% ($7M)
  15. Phoenix 85054 - up 61% ($2M)
  16. Mesa 85204 - up 54% ($7M)
  17. Sun City 85373 - up 56% ($5M)
  18. Mesa 85202 - up 55% ($4M)
  19. Glendale 85302 - up 55% ($5M)
  20. Apache Junction 85119 - up 49% ($3M)

June 4 - We know that the ARMLS numbers in May produced all-time record highs for monthly unit sales and dollar volume. Now let us look at the numbers from Maricopa County's recorded deeds. These include a lot of transactions that took place outside of ARMLS, such as the majority of new home closings, FSBOs and investor purchases.

For single-family homes and condos / townhouses, we saw a total of 12,041 affidavits of value. This is up 3% from May 2018 and it is the highest monthly count since June 2006. Unlike the ARMLS numbers it is not an all-time record. The bubble years of 2005 and 2006 saw a very large number of transactions conducted outside the MLS. New homes exceeded 4,000 a month several times during the bubble years, whereas in May 2019 we see less than half that number at 1,535. This is actually 1% lower than May 2018, so we can conclude re-sales are driving the recovery in demand a little harder than new homes.

The median new home sold at $364,990, which is much higher than the peak median during the bubble - $311,928. The re-sale median stands at $275,000, up less dramatically from the bubble peak of $253,418.

June 1 - The weaker demand that started in 3Q 2018 and ran through 1Q 2019 has caused a slightly slower rate of annual appreciation in recent months. However appreciation rates remain well above inflation and significantly above percentage rises in earnings. They also remain broadly similar to where they stood 12 months ago. Many locations have seen higher rates than a year ago (including Queen Creek, Buckeye, Mesa, Tempe, Paradise Valley, Phoenix, Gilbert and Goodyear).

The lower interest rates we are now seeing have spurred demand that is now higher than 2018 and it is possible that we will see the appreciation trend reverse and turn higher again in the not too distant future.

Here are the appreciation rates for the single-family markets in the 17 largest cities measured using the annual average sales price per sq. ft. for closed listings.

  1. Queen Creek 10.7% (8.9%)
  2. Maricopa 9.0% (9.5%)
  3. Buckeye 8.8% (8.1%)
  4. Mesa 8.2% (7.1%)
  5. Tempe 7.8% (5.8%)
  6. Avondale 7.5% (8.6%)
  7. Glendale 7.4% (7.6%)
  8. Paradise Valley 7.2% (3.6%)
  9. Phoenix 7.1% (6.8%)
  10. Gilbert 6.9% (6.7%)
  11. Goodyear 6.6% (5.4%)
  12. Chandler 6.5% (6.7%)
  13. Surprise 6.3% (8.2%)
  14. Peoria 5.7% (6.7%)
  15. Scottsdale 5.0% (6.7%)
  16. Cave Creek 4.3% (5.8%)
  17. Fountain Hills 3.3% (6.7%)

The numbers in parentheses are the appreciation rates 12 months ago. The most affordable areas are looking strong while the Northeast Valley dominates the bottom of the table.

May 31 - The Cromford® Market Index for the single-family markets in the 12 secondary cities that were not included in yesterday's table are as follows:

  1. El Mirage 257.8 (276.6)
  2. Apache Junction 217.2 (179.7)
  3. Arizona City 186.8 (210.2)
  4. Tolleson 188.5 (176.8)
  5. Anthem 194.7 (173.1)
  6. Laveen 192.9 (173.6)
  7. Sun City West 156.3 (130.0)
  8. Sun City 127.5 (97.2)
  9. Gold Canyon 146.9 (122.8)
  10. Sun Lakes 121.9 (87.6)
  11. Litchfield Park 102.1 (101.4)
  12. Casa Grande 101.3 (100.2)

The top city El Mirage has a higher CMI than Avondale, but it is trending downward. The only other location showing a downward trend is Arizona City.

Although they are moving slightly higher, Casa Grande and Litchfield Park are still very much in the balanced zone and not seller's markets like all the rest.

May 30 - Our regular weekly check on the Cromford Market Index for the single-family segment in the 17 largest cities is show below:

This shows the market accelerating in favor of sellers with the average CMI up by 5.9% from a month ago.

We have more cities showing double digit percentage improvement (Avondale, Surprise, Mesa, Phoenix, Scottsdale, Buckeye, Gilbert) with the same 4 cities bringing up the rear as last week (Maricopa, Goodyear, Paradise Valley & Tempe).

Demand has been improving as interest rates have fallen while supply is on a downward trend.

June 2019 should be an excellent month for sellers, even better than May 2019.

May 28 - The latest report on the Case-Shiller® Home Price Index® covers sales that closed during the first quarter of 2019.

The month to month changes look like this:

  1. San Francisco +2.13%
  2. Seattle +1.64%
  3. Boston +1.55%
  4. San Diego +1.16%
  5. Minneapolis +1.05%
  6. Denver +1.01%
  7. Washington +0.93%
  8. Cleveland +0.92%
  9. Charlotte +0.77%
  10. Portland +0.70%
  11. Atlanta +0.67%
  12. Miami +0.59%
  13. Chicago +0.59%
  14. Los Angeles +0.49%
  15. Tampa +0.47%
  16. Phoenix +0.43%
  17. Detroit +0.39%
  18. Dallas +0.27%
  19. Las Vegas +0.08%
  20. New York -0.10%

These percentages are dramatically higher than we saw last month and Phoenix has dropped from 11th to 16th place. The national average was +0.65%, so Phoenix fell below that.

The year to year changes were as follows:

  1. Las Vegas +8.24%
  2. Phoenix +6.06%
  3. Tampa +5.28%
  4. Atlanta +4.66%
  5. Miami +4.26%
  6. Denver +4.26%
  7. Charlotte +3.99%
  8. Boston +3.77%
  9. Minneapolis +3.75%
  10. Cleveland +3.47%
  11. Detroit +3.32%
  12. Dallas +2.97%
  13. Washington +2.83%
  14. Portland +2.59%
  15. New York +2.30%
  16. Chicago +1.81%
  17. Seattle +1.64%
  18. San Francisco +1.35%
  19. Los Angeles +1.33%
  20. San Diego +1.29%

Unlike the month-to-month numbers, Phoenix stands out as a top mover in the year to year increases. It is also well above the national average of +3.72%.

May 26 - We are still seeing pessimistic commentary about the housing market in many national press reports. It is extremely hard to reconcile that commentary with the facts on the ground in Greater Phoenix. I suppose things must be a lot worse outside Arizona. In the ARMLS database we are recording the highest ever spending on housing.

Below is the monthly dollar volume of closed sales for all areas & types, measured every Saturday. The most recent number for May 25, 2019 is $3.636 billion. This is the highest number we have ever recorded, surpassing the prior record set in June 2018.

May 25 - In a dramatic change from 2 months ago, the number of active single-family listings without a contract in Phoenix is now lower than it was last year:

A similar situation exists in Mesa.

May 24 - We noted yesterday that Maricopa, Goodyear and Paradise Valley are the laggards in the CMI stakes among the largest 17 cities. Among the secondary cities we have a few more examples of cities that are not doing as well as last year:

  • Casa Grande - the weakest market of all with its CMI dipping below 100. Supply is above normal are marginally exceeds demand
  • Litchfield Park - a balanced market with an increasing supply and demand below normal
  • Sun Lakes - weak for several months but starting to improve now

Meanwhile Anthem, Apache Junction, Gold Canyon, Laveen and Sun City West are leading the secondary cities for their balance shifting in favor of sellers.

May 21 - The Cromford® Market Index has been on a strong upward trajectory since late February, rising from 125.7 on Feb 20 to 148.2 3 months later. Two of the most important components of the overall market are Phoenix and Mesa, number one and two cities by unit volume.

Both cities look impressive over the past 2 months and are now in striking distance of last year's line.

Both cities are also doing much better than 2017, which seemed like a very good year at the time.

Not all cities are doing as well as this but if Phoenix and Mesa are in good shape then it is hard for the Central Valley as a whole to do poorly.

May 19 - Although new listings are arriving at roughly the same rate as last year, active listing counts are declining more quickly than they were at this time in 2018. This is because they are going under contract faster.

The number of active listings without a contract peaked in 2019 on February 16 at 19,693. As of May 18, it has declined 10.6% to 17,597, These numbers are for all areas & types within the ARMLS database.

Comparing with last year, we saw a peak of 17,815 on February 10, 2018 and by May 18, it had declined to 16,499. This is a drop of 7.4%.

We can see that we still have 7% more active listings than last year, but the gap is closing because demand is now stronger than it was a year ago.

May 16 - The latest table of CMI values for the single-family markets in the 17 largest cities is shown below:

Like last week we have 13 cities improving for sellers and 4 cities deteriorating.

3 of the cities deteriorating were the same as last week - Paradise Valley, Goodyear and Maricopa. However Tempe has joined them while Avondale has found a second wind.

Another positive sign is that the average change has risen to 3.8% (3.2%) last week, so the whole of this market is accelerating again, albeit only a little.

Stand-out cities include Mesa (up 13%), Surprise (up 12%) and Phoenix (up 10%).

Only Paradise Valley is outside the seller's market zone (110 plus) and not by very much. Since supply in Paradise valley is now falling, it may not stay in the balanced zone very long.

May 15 - According to Maricopa County affidavit data, there were 11,146 homes sold in April 2019. This total includes single-family homes as well as townhomes and condos. It was up 4.1% from April 2018 when we counted 10,712.

New homes showed the highest percentage growth, up 7.4% from 1,309 to 1,406. Re-sale transactions were up less than half as much at 3.6%. Nevertheless, both are showing positive growth which contrasts with the declining trends we saw over the previous six months.

The situation was reversed when we look at median sales prices. Re-sales increased 5.9% to reach $268,000 while new homes increased only 3.7% to reach $349,560. Developers have been throwing more efforts at the entry level market and this has caused new home sizes to trend lower, which has in turn caused prices to trend higher at a slower rate..


May 10 - Looking deeper into the affidavit counts we can see that the recovery in unit sales has not been uniform across market sectors.

When we look at broad geographic areas we find that

  1. Central & Northern unit sales were up 6.0% from April 2018
  2. West Valley unit sales were up 5.8% from April 2018
  3. Southeast Valley unit sales were up 3.4% from April 2018
  4. Northeast Valley unit sales were down 2.6% from April 2018
  5. Pinal County unit sales were down 12% from April 2018

Phoenix and the West Valley have come back strongest with the Southeast Valley slightly behind and the Northeast Valley a long way behind. Pinal County is struggling with a very strong 2018 to compare against.

For the broad price ranges we see:

  1. Unit sales over $1 million increased 16%
  2. Unit sales between $250K and $500K increased 14.5%
  3. Unit sales between $500K and $1M increased 12.5%
  4. Unit sales below $250K fell 8.4%

The unit count below $250K is hampered by the lack of supply in that price range, rather than a shortage of demand. We note the strong performance of the luxury sector over $1 million.

May 9 - The regular weekly table of Cromford® Market Index numbers looks like this:

Another good result for sellers with 13 cities showing improvement from their perspective. Only 4 of the 17 cities showed movement in favor of buyers.

The average movement in CMI value was +3.2%, little changed from last week's +3.3%.

The top cities showing improved conditions for sellers were Mesa, Surprise, Phoenix and Cave Creek.

Paradise Valley and Goodyear were the strongest movers in favor of buyers.

Paradise Valley has slipped into the balanced zone as demand has faltered after a very strong period in March. All the other 16 cities are seller's markets.

May 8 - The hottest ZIP codes on May 1 were the following, based on their single-family contract ratio:

  1. Phoenix 85040 - 253
  2. Phoenix 85017 - 250
  3. Youngtown 85363 - 250
  4. Surprise 85378 - 231
  5. Mesa 85210 - 212
  6. Mesa 85204 - 203
  7. Phoenix 85019 - 195
  8. Gilbert 85234 - 178
  9. Glendale 85307 - 175
  10. Mesa 85208 - 174
  11. Phoenix 85031 - 170
  12. Tempe 85282 - 165
  13. Mesa 85201 - 160
  14. Mesa 85203 - 156
  15. Apache Junction 85120 - 154
  16. Gilbert 85295 - 153
  17. Peoria 85345 - 148
  18. Phoenix 85033 - 146
  19. Phoenix 85009 - 144
  20. Phoenix 85037 - 143

Anything over 100 can be regarded as a hot contract ratio and the top 52 ZIP codes were over 100 on May 1, 2019.

The contract ratio measures how much of the supply is already tied up in escrow, so a high number means there are few active listings relative to the number of UCB, CCBS and pending listings.

If you have a buyer who wants plenty of choice then they generally have to look upmarket where contract ratio are always relatively low. A few areas remote from the valley center will also show low contract ratios. On May 1, the lowest contract ratios were here:

  1. Congress 85332 - 6
  2. Carefree 85377 - 14
  3. Aguila 85320 - 17
  4. Paradise Valley 85253 - 19
  5. Wickenburg 85390 - 21
  6. Scottsdale 85262 - 26
  7. Wittmann 85361 - 26
  8. Scottsdale 85255 - 30
  9. Tonopah 85354 - 30
  10. Fountain Hills - 31

May 7 - Based on affidavits of value filed during April we have collected the following counts of iBuyer activity:

  Opendoor OfferPad Zillow All iBuyers Combined
Homes Purchased in April 2019 265 125 103 493
Homes Purchased in April 2018 274 82 0 356
Annual Change in purchases -3% +52% N/A +38%
Homes Sold in April 2019 351 102 101 554
Homes Sold in April 2018 254 88 0 342
Annual Change in Sales +38% +16% N/A +62%
Median Purchase Price in April 2019 $234,700 $240,462 $295,000 $243,900
Median Purchase Price in April 2018 $245,700 $228,600 N/A $241,950
Median Sale Price in April 2019 $245,000 $225,500 $291,000 $243,900
Median Sale Price in April 2018 $242,500 $240,000 N/A $242,000
Homes in Inventory at the End of April 943 443 404 1,789

iBuyers sold a lot more homes than they purchased in April, something which we saw to a lesser extent in March, but have not seen prior to March.

In March their sales represented 6.3% of the available market (which excludes new homes, REOs, HUD homes and trustee sales), by far their best month to date, and up from 3.4% last year. In other words they grew from 1 out of every 25 homes to 1 out of every 16. We don't have percentage numbers for April yet as we have not counted all the non iBuyer transactions.

On the buying side, Opendoor bought slightly fewer homes than April last year, OfferPad jumped 52% while Zillow bought fewer homes than the month before. Zillow was not in operation in April 2018.

March purchases represented 4.8% of the available market, the lowest share since July 2018, but up from 3.3% in March 2018. It appears that Opendoor and Zillow have been concentrating on selling what they already had while OfferPad has been focused on growing purchases as well as sales.

May 5 - April 2019 was a resounding success for closed listings considering the history of the prior 6 months when sales were comparatively weak year over year. Let us look at how the individual cities fared comparing the single-family closings for the various cities. Here they are ranked by the percentage change (rounded to the nearest whole number) in sales for April 2019 over April 2018.

  1. Coolidge +113%
  2. Arizona City +73%
  3. Rio Verde +60%
  4. Laveen +52%
  5. Carefree +50%
  6. Youngtown +42%
  7. Anthem +29%
  8. Cave Creek +29%
  9. Eloy +27%
  10. Waddell +24%
  11. Gold Canyon +21%
  12. Wittmann +20%
  13. Peoria +16%
  14. Apache Junction +15%
  15. Surprise +15%
  16. Glendale +14%
  17. Goodyear +12%
  18. Mesa +9%
  19. El Mirage +9%
  20. Tolleson +9%
  21. Casa Grande +7%
  22. Florence +6%
  23. Maricopa +6%
  24. Gilbert +6%
  25. Phoenix +6%
  26. Tempe +5%
  27. Queen Creek +3%
  28. Sun Lakes +2%
  29. Buckeye +1%
  30. Scottsdale - no change
  31. Paradise Valley - no change
  32. Litchfield Park -1%
  33. Sun City -1%
  34. Sun City West -1%
  35. Avondale -2%
  36. Fountain Hills -3%
  37. Chandler -13%
  38. New River -33%
  39. Wickenburg -40%

Particularly strong in this list are several cities in Pinal County (Coolidge, Arizona City, Apache Junction, Gold Canyon and Eloy) and the Northwest Valley (Glendale, Peoria, Surprise, Waddell, Wittmann and Youngtown). These are all relatively affordable cities. We saw less impressive numbers from the exclusively 55+ areas Sun City, Sun City West and Sun Lakes, With the notable exception of Rio Verde, Carefree & Cave Creek, the Northeast Valley fared worse than average.

In the Southeast Valley, Mesa was the standout with Chandler doing surprisingly poorly.

May 2 - Another week goes by and it is time to look at the Cromford® Market Index values for the single-family markets in the 17 largest cities:

This shows another positive set of changes for sellers and deterioration from a buyer's perspective. We have only 4 cities moving down and 13 moving up.

The biggest improvement was in Mesa with Cave Creek, Phoenix, Surprise, Queen Creek, Peoria and Tempe all doing well too.

The only serious decline was in Paradise Valley which was doing well back in March but is in full retreat now.

All 17 of the largest cities are inside the seller's zone (over 110) and the average change over the last month was 3.3%. This is down from 4.1% last week.

May 1 - We have major news today after a massive number of homes closed escrow on Tuesday.

In April 2019 the ARMLS database saw more closed listings (9,647) than April 2018 (9,185). This is a significant sign that the recovery in demand is growing in strength and the first time we have seen year over year sales growth since August 2018.

As a result, the annual sales rate rose between March and April 2019. Another significant signal of market health.

Before we get over-excited, remember that April this year had one more working day than April last year. This is a 4.8% advantage . The number of closed listings was up by 5.0%. The difference is closings per day was only 1 listing per day, almost negligible. Nevertheless it was still a win, even when you make the adjustment.

Nobody would have predicted this strong a recovery back in January.

April 2019

April 30 - The S&P / Case-Shiller® Home Price Index® report was released this morning for sales between December 2018 and February 2019.

The month to month movement for the 20 focus cities that are reported were:

  1. San Diego +0.94%
  2. Denver +0.91%
  3. Tampa +0.66%
  4. San Francisco +0.64%
  5. Seattle +0.57%
  6. Washington +0.29%
  7. Las Vegas +0.27%
  8. Atlanta +0.24%
  9. Dallas +0.17%
  10. Detroit +0.15%
  11. Phoenix +0.14%
  12. New York +0.13%
  13. Miami +0.10%
  14. Portland +0.07%
  15. Chicago +0.04%
  16. Los Angeles +0.02%
  17. Charlotte -0.13%
  18. Cleveland -0.31%
  19. Minneapolis -0.35%
  20. Boston -0.38%

Here Phoenix is in the middle of the pack and slightly below the national average of +0.21%

For a year-over-year view we get:

  1. Las Vegas +9.7%
  2. Phoenix +6.7%
  3. Tampa +5.4%
  4. Atlanta +4.7%
  5. Denver +4.7%
  6. Minneapolis +4.4%
  7. Miami +4.3%
  8. Charlotte +4.2%
  9. Detroit +4.0%
  10. Dallas +3.4%
  11. Boston +3.2%
  12. Portland +3.0%
  13. Washington +3.0%
  14. Seattle +2.8%
  15. Cleveland +2.8%
  16. New York +2.6%
  17. Chicago +2.2%
  18. Los Angeles +1.8%
  19. San Francisco +1.4%
  20. San Diego +1.1%

Here Phoenix is second only to Las Vegas and well above the national average of 4.0%.

April 28 - Another sign of the market's resurgence can be found in the weekly dollar volume chart, shown below:

Here we see 2019 edging above 2018 over the last 3 weeks even though, back in January and February, 2019 was struggling to stay ahead of 2017, never mind 2018.

Slightly fewer homes are closing than last year, but they are selling for somewhat higher prices, so the dollar volume is just a tad higher this year. the number of agents in the ARMLS roster is also just a tad higher, so agent productivity is very similar to last year. Even so, that is a big improvement on how things looked back at the start of 2019.

You can see from the chart above that 2019 has seen a strong acceleration in dollars spent starting in late February.

April 25 - The regular weekly table of Cromford® Market Index numbers looks like this:

In many ways this looks more favorable to sellers than last week. We have only 3 cities deteriorating (as opposed to 5 last week).

However the average improvement is 4.0%. lower than last week's 4.6%.

The market is still warming up, but the rate of warming is slowing a little. Nevertheless, supply is falling and demand is increasing. Sellers like both of those trends.

Mesa shows the strongest improvement over the past month, with Tempe, Phoenix, Peoria and Surprise coming next.

We also note that Buckeye spent just a few days in the balanced zone under 110 and has edged upward again. We therefore have all 17 cities in a seller's market,

April 24 - Gone are the days when Canadians were a crucial segment of home buyers in Central Arizona. Back in the heyday of 2009 through 2011, they represented as much as 5% of all buyers.

In the past 12 months only 645 homes were purchased by people with Canadian home addresses. This is down 85% from the peak of February 2012. Not only that, Canadians are selling up and leaving. They sold more than twice as many homes (1440) as they purchased in the last 12 months. During March 2019 they sold 173 and purchased just 63.

The last time we saw a positive movement from Canadians was in March 2015 when the previous 12 months saw 1,506 purchases and 1,442 sales. Since March 2015 a net 5,284 Canadian home owners have sold up and left the valley.

Home buyers from other overseas countries are negligible in number. We never had the large number of Chinese buyers that were to be seen in California, Washington or New York.

The conclusion is that almost all out-of-state purchasing of Arizona homes is now driven by people from the other 49 states that make up the USA. California is by far the dominant state in that collection and it has been so every month since we first started compiling data.

In the last 12 months we have seen 5,852 home buyers with California addresses, up from 5,226 a year ago. If you want to know which state has the best return on marketing dollars for Arizona real estate - the answer is obvious. We may worry about the declining affordability of homes in Greater Phoenix, but to the typical Californian, our home prices are crazy low even now.

April 23 - Early April saw a stronger flow of new listings than last year, but that has eased off now with Easter weekend falling later than usual. Price cuts have also declined from the high levels of March while the total number of active listings without a contract is trending lower.

Demand is still strengthening at the moment so with supply trending lower and prices trending higher I cannot think of anything that buyers should be annoyed about. Some national observers have commented that Phoenix is the healthiest market in the country and while I am not in a position to confirm that (because I do not have data for the rest of the country), I can confirm that the vital signs in Phoenix are looking very healthy.

April 19 - For the single-family market, the following locations have more listings under contract than in 2018:

  • Anthem
  • Apache Junction
  • Casa Grande
  • Cave Creek
  • Coolidge
  • Eloy
  • Glendale
  • Gold Canyon
  • Goodyear
  • Laveen
  • Mesa
  • Peoria
  • Queen Creek
  • Scottsdale
  • Sun City
  • Sun City West
  • Sun Lakes
  • Surprise
  • Tolleson
  • Waddell

We note that Pinal County, 55+ locations and the West Valley dominate this list. However Scottsdale appears too, having just overtaken 2018 this week.

April 18 - The regular weekly table of Cromford® Market Index numbers looks like this:

The market is still improving for sellers with an average 4.6% rise across the 17 cities. However it was 5.4% last week and we now have 5 cities showing deterioration rather than 3.

My conclusion is that the market improvement is slowing a little. Many of the very largest cities (Phoenix, Mesa, Glendale) are showing strong advances over the last month. All of the declining cities show relatively small downward movement. So the market is still improving in favor of sellers, just not quite as quickly as 2 weeks ago.

One additional change is that we now have only 16 of the 17 cities in the seller's market zone. Buckeye has dropped below 110 and is now considered a balanced market.

April 17 - The growth in listings under contract has been quite remarkable over the past few weeks.

We can see that we started the year a long way behind 2018 but last Sturday we had caught up.

As of today we can see 13,215 listings under contract - and on April 17, 2018 there were 13,070.

That is probably worth repeating - we now have MORE listings under contract than we did at this time last year.

April 16 - In contrast to single-family permits, multi-family building permits are slumping across central Arizona. The last 3 months reported (December through February) have seen only 665 multi-family permits across Maricopa and Pinal counties. This is in marked contrast to December 2017 through February 2018, when there were 2,853. Other counties like Pima and Yavapai are seeing growth in multi-family permits, but multi-family developers appear to have lost a lot of momentum in Maricopa and Pinal counties.

This should free up construction resources (especially skilled labor) and allow them to be applied to single-family construction.

April 15 - The Census Bureau is starting to catch up with the backlog of work caused by the government shutdown in December and January. We now have building permit data published for February and have updated the 10 permit charts in the Cromford Public section of the web site.

February 2019 sees the rolling 12 month average for single-family permits in Maricopa and Pinal counties rise to 23,739. This is up 14% from 20,858 in February 2018 and is the highest we have seen since January 2008, just over 11 years ago. For the month of February 2019 the bureau counted 1,830 single-family permits which is up 15% from the 1,593 they counted in February 2018.

Year to date at the end of February we have seen 3,503 single-family permits across Maricopa and Pinal. This is up 9% from last year. It seems the slight hesitancy from developers that we saw in January has completely disappeared. Very little evidence can be seen of any significant slow down in home building, at least in the single-family sector.

Year to date the top areas for single-family building permits have been:

  1. Phoenix 620
  2. Buckeye 355
  3. Unincorporated Pinal County 341 (mainly San Tan Valley)
  4. Mesa 289
  5. Maricopa 255
  6. Gilbert 221
  7. Peoria 208
  8. Goodyear 207
  9. Queen Creek 190
  10. Surprise 174
  11. Casa Grande 142
  12. Unincorporated Maricopa County 117
  13. Scottsdale 104
  14. Glendale 44
  15. Chandler 42

Buckeye, San Tan Valley and Maricopa are all looking busy and Casa Grande is seriously growing, ahead of major cities like Scottsdale, Chandler and Glendale.

April 11 - The regular weekly table of Cromford® Market Index numbers looks like this:

As last week, the only cities seeing deteriorating conditions for sellers over the last month were Buckeye, Fountain Hills and Scottsdale. Pretty mild downward changes for them, though.

Strong improvements were seen for Cave Creek, Glendale, Tempe, Mesa, Maricopa and Phoenix. The latter represents 25% of the market so is pretty important.

The average change over the last 31 days was 5.4%. Last week it was 6.2%. At some point the improvement in the market must start to decelerate and I would say this point was possibly sometime in the last 7 days. If I am correct, we will still see improvement over the coming weeks but the rate of improvement will probably be slowing gradually. We have witnessed a very favorable change in interest rates over the past 4 months and that effect will gradually dissipate unless rates continue to fall even further. Meanwhile prices continue to rise which will re-introduce affordability concerns during the second half of the year.

April 10 - March was rather a good month for the luxury single-family home market. Sales were up 10% from 92 to 101 for homes over $2 million, though there was a fall of 7% from 322 to 299 for homes between $1 million and $2 million. Compared to March 2018, the monthly average price per sq. ft. rose 8% for homes over $500,000, while average time on market dropped 3%. Days of inventory for single-family homes over $500,000 fell from 232 to 212 because the annual sales rate rose 14% while the active listing count climbed only 4%.

I would say the luxury market overall is in a better shape today than it has been since 2015 though there are still a handful of weaker locations..

April 9 - Today we have published the Agent Production table for 2019 year to date. You can find it here.

When we published the 2018 numbers, quite a few agents wrote to question why our numbers were different from their own calculations. In every case their own calculations were different because they had included transactions that are NOT included in our table. These included:

  1. Listings for geographies outside Greater Phoenix
  2. Sales which were never listed on ARMLS (e.g. new homes or pocket listings).
  3. Listings in which the agent was a co-seller or co-lister (not counted by us - all credit goes to the listing or selling agent only)
  4. Listings for vacant land or commercial properties (e.g. multi-family).

April 8 - Today would be a good time to take a look at what the iBuyers did during March. We don't have verified data as yet but we do have affidavit counts which should not be too far away from the correct numbers of purchases and sales.

  Opendoor OfferPad Zillow All iBuyers Combined
Homes Purchased in March 2019 247 92 105 444
Homes Purchased in March 2018 265 78 0 343
Annual Change in purchases -7% +18% N/A +29%
Homes Sold in March 2019 347 83 109 539
Homes Sold in March 2018 285 131 0 357
Annual Change in Sales +22% -37% N/A +30%
Median Purchase Price in March 2019 $238,300 $219,254 $295,000 $248,000
Median Purchase Price in March 2018 $242,900 $213,050 N/A $237,300
Median Sale Price in March 2019 $250,000 $237,561 $295,000 $248,000
Median Sale Price in March 2018 $250,000 $236,000 N/A $237,250
Homes in Inventory at the End of March 1,029 420 402 1,851

Although iBuyer purchases are up 29% overall from March 2018, almost all this growth is accounted for by the new entrant Zillow. There has been a slight decline in purchase volumes for the original 2 players.

On the sales side, growth has taken off compared to February, growing 30%, but OfferPad's March sales were far below their total in March last year.

We made the following observation last month but it still applies: The median prices for both purchases and sales have increased for iBuyers as a whole, because Zillow is operating over a broader price range than the original 2 players. While Opendoor and OfferPad still concentrate most of their attentions on the low end of the market, Zillow frequently buys homes in the mid range. As a result they often take a bit longer to sell them.

April 6 - The preliminary recording counts for Maricopa County show that in March 2019, closings were down 13% compared with March 2018. However, at 9,846 they were 2% higher than March 2016. New home sales were down 15% year over year while re-sales were down 12%. This relative weakness in new home closings has reversed the situation from the previous 3 months.

The overall median sales price was $275,711, up 4% from a year ago, with new homes at $350,169, up 5%, and re-sales at $265,000, up 5%.

These numbers do not reflect much of the recent recovery in demand because closings are the final step in the process. It is increases in the number of listings under contract that is the main reason the Cromford® Demand Index has been rising.

April 4 - The regular weekly table of Cromford® Market Index numbers looks like this:

In one way this is not as good as last week since Fountain Hills has gone slightly negative, like Scottsdale and Buckeye who are still refusing to join the party.

However the average change in CMI over the month is now +6.2% which is up from +5.9% last week.

The strongest mover upwards is Cave Creek, with Glendale, Mesa, Avondale, Tempe, Maricopa, Phoenix and Goodyear all showing significant improvement for sellers.

All these cities are still in the seller's market zone (over 110).

April 3 - We show below the months of supply chart for all areas & types with the last 4 years selected.

We can see that 2019 has more supply than 2018 relative to demand (as measured by the monthly sales rate). However it is now lower than both 2016 and 2017 and has dropped from its peak on February 1 at a faster rate than the other 3 years.

This is due to a fairly subdued rate of incoming new listings and a rapid increase in demand due to more attractive interest rates.

This chart shows why sellers should be pretty happy with the current situation. Meanwhile buyers can be pleased that they have more choice than last year, at least between $200K and $600K, and can lock in lower rates for the time being. There is something for everyone to be happy about in this chart.

April 1 - We are taking a look at the active listing count by price range:

Price Range Active (excl. UCB/CCBS) April 1, 2019 Active (excl. UCB.CCBS) April 1, 2018 Change
Up to $150K 115 189 -39%
$150K - $175K 158 184 -14%
$175K - $200K 532 547 -3%
$200K - $225K 720 642 +12%
$225K - $250K 1,145 934 +23%
$250K - $275K 980 713 +37%
$275K - $300K 1,033 844 +22%
$300K - $350K 1,619 1,297 +25%
$350K - $400K 1,384 1,154 +20%
$400K - $500K 1,848 1,542 +20%
$500K - $600K 1,188 976 +22%
$600K - $800K 1,179 1,208 -2%
$800K - $1M 760 712 +7%
$1M - $1.5M 689 746 -8%
$1.5M - $2M 436 470 -7%
$2M - $3M 384 398 -4%
Over $3M 362 341 +6%

As we have for several years, we see a significant decline in available listings at the low end below $175K. However, the mid-range between $200K and $600K has seen a strong increase in supply compared with this time last year. This trend peters out above $600K and we have less supply than last year between $600K and $3M, although there is a slight bump between $800K and $1M. Above $3M we see even more homes for sale than last year, already a very large number compared with the annual sales rate.

Those with budgets of less than $200K have an even poorer selection of homes to chose from, and it was already pretty meager last year. Those looking to spend $200K to $600K have a much larger pool of homes to consider. Luxury home buyers over $600K will find a more limited range than last year unless they are planning to spend more then $3M in which case the world is their oyster, in more ways than one.

March 2019

March 28 - Another week goes by and it is time to look at the Cromford® Market Index values for the single-family markets in the 17 largest cities:

This is one of the most positive tables we have seen for quite some time.

Only 2 cities (Scottsdale and Buckeye) have deteriorated for sellers over the past month and they have only moved down 4% and 1% respectively.

15 cities improved for sellers and the average change for all 17 was a very healthy +5.9%.

Cave Creek has improved dramatically, while Avondale and Glendale surged by 13%.

Most of the improvement comes from increased demand, no doubt fueled by lower interest rates and increased loan limits. However supply has started to decline too.

The question now is whether this improvement in market dynamics (from a seller's perspective) will continue over the next month or two.

March 26 - The S&P / Case-Shiller® Home Price Index® data has been release for the sales period November 2018 to January 2019.

Here is how the 20 focus cities fared on a month to month basis:

  1. Tampa +0.30%
  2. Miami +0.26%
  3. Charlotte +0.25%
  4. Denver +0.22%
  5. Dallas +0.13%
  6. New York +0.02%
  7. Washington -0.11%
  8. Phoenix - 0.12%
  9. Detroit -0.15%
  10. Portland -0.19%
  11. San Diego -0.22%
  12. Atlanta -0.26%
  13. Seattle -0.27%
  14. Los Angeles -0.28%
  15. Las Vegas -0.33%
  16. Minneapolis -0.36%
  17. Boston -0.40%
  18. Chicago -0.51%
  19. Cleveland -0.62%
  20. San Francisco -1.30%

14 of the cities, including Phoenix, saw a decline in the HPI between Oct-Dec and Nov-Jan. This is primarily a seasonal effect in many locations. The previous upward trend in pricing used to be enough to overwhelm the seasonal effect, but with less upward pressure, the seasonal effect become more obvious. The average month-to-month change for the USA as a whole was -0.18%.

Here is the change in HPI on a year to year basis:

  1. Las Vegas +10.5%
  2. Phoenix +7.5%
  3. Minneapolis +5.1%
  4. Tampa +5.1%
  5. Charlotte +5.1%
  6. Denver +5.0%
  7. Detroit +5.0%
  8. Atlanta +4.9%
  9. Miami +4.8%
  10. Boston +4.6%
  11. Seattle +4.1%
  12. Dallas +3.8%
  13. Cleveland +3.8%
  14. Portland +3.3%
  15. Washington +3.1%
  16. New York +3.0%
  17. Los Angeles +2.9%
  18. Chicago +2.4%
  19. San Francisco +1.8%
  20. San Diego +1.3%

We note that all 20 cities saw positive price movement year over year and the average for the USA as a whole was 4.3%

March 25 - In another sign that new homes are becoming more popular relative to re-sales, there were 1,673 single-family building permits issued in January 2019, according to the Census Bureau, still running very late after the disruption of the government shutdown. This is the highest total for January since 2007. It follows an extremely strong December number.

March 24 - Year to date new home closings across Greater Phoenix stand at 2,621. This is slightly ahead of the 2018 number which was 2,617. Someone should clearly explain to the home builders that they are supposed to be in a housing slump. Instead they are closing more home sales in 2019 than in any year since 2006.

Single-family homes are outselling 2018 by a wider margin. Condos and townhouse closings are well down on both 2017 and 2018.

The lower end of the luxury market is doing particularly well. New homes between $500,000 and $1 million are up from 315 in 2018 YTD to 420 in 2019 YTD.

March 21 - The Cromford® Market Index table for the single-family markets in the 17 largest cities looks like this:

This shows much greater strength than a month ago with an average increase in the CMI of 5.5%, comparing favorably with the 3.8% increase we saw last week.

Only 5 cities saw a decline and 4 of those were of 1% or less. Only Scottsdale saw a noticeable decrease (-4%).

Cave Creek, Avondale, Glendale and Paradise Valley all advanced more than 10% with Mesa, Tempe, Goodyear and Queen Creek improving by at least 6%.

There is still no city among the 17 in a balanced market (below 110). The top 7 are strong seller's markets.

March 20 - While we cannot claim to know much about the US housing market outside Arizona, it is clear that Greater Phoenix has a far more buoyant housing market than implied in the prevailing news reports. We turn our attention today to pricing. The important prices are what homes actually sell for, not what they are listed at. There are thousands of price changes every week, some up as well as many down, but we don't really know what a home is worth until someone stumps up the money, usually with the help of a lender who has insisted on a professional appraisal. Sale prices are reality whereas asking prices sometimes have a dreamlike quality, especially at the upper end of the market.

Sales prices in March 2019 are looking very strong. Here are the current readings for average price per sq. ft. (our preferred measuring tool):

Sector March $/SF Now March $/SF Last Year Change Remarks
Greater Phoenix - all types $174.24 $161.40 +8.0%  
Greater Phoenix - single-family $174.63 $161.03 +8.4%  
Greater Phoenix - condo / townhouse / patio home etc. $182.35 $174.33 +4.6%  
Greater Phoenix - mobile / manufactured $96.02 $95.44 +0.6% small sample size - volatile measure
Greater Phoenix - under $250,000 $135.88 $126.43 +7.5%  
Greater Phoenix - $250,000 to $500,000 $158.36 $154.24 +2.7%  
Greater Phoenix - $500,000 to $1 million $212.26 $206.51 +2.8%  
Greater Phoenix - over $1 million $391.40 $338.54 +15.6% small sample size - highly volatile measure
  12 Month $/SF Now 12 Month $/SF Last Year Change  
Greater Phoenix - all types $164.37 $153.33 +7.2%  
Greater Phoenix - single-family $164.06 $153.01 +7.2%  
Greater Phoenix - condo / townhouse / patio home etc. $176.60 $164.52 +7.3%  
Greater Phoenix - mobile / manufactured $98.19 $92.15 +6.6%  
Greater Phoenix - under $250,000 $131.24 $121.67 +7.9%  
Greater Phoenix - $250,000 to $500,000 $155.64 $149.56 +4.1%  
Greater Phoenix - $500,000 to $1 million $204.82 $201.29 +1.7%  
Greater Phoenix - over $1 million $340.28 $333.11 +2.2%  

Can you spot the weakness in today's market prices?

No, neither can I.

March 19 - Here is another observation comparing 2019 with previous years. The contract ratio is a reliable measure of how hot a market is, but it is subject to seasonal effects. If we compare March 19 for each of the last 14 years we eliminate any seasonal issues and should be able to make a very fair comparison.

For the whole of the ARMLS database, the contract ratio was as follows:

  • 2019 - 62.1
  • 2018 - 73.2
  • 2017 - 62.7
  • 2016 - 55.9
  • 2015 - 53.7
  • 2014 - 41.1
  • 2013 - 92.9
  • 2012 - 134.7
  • 2011 - 63.2
  • 2010 - 59.2
  • 2009 - 25.8
  • 2008 - 12.2
  • 2007 - 16.4
  • 2006 - 26.9

We can conclude that 2019 is far stronger than the market between 2006 and 2009 and also hotter than 2014 through 2016. Admittedly it is cooler than 2018, but it is very similar to 2017 and 2011. Sellers are not in as strong a position as they were in 2018 at this time, but they are better placed than in 8 out of the last 13 years. That makes 2019 better than average.

You could legitimately argue that 2011 through 2014 were affected by the presence of a large number of short sales. This tends to increase the contract ratio because these listings stay under contract for a long time awaiting lender approval.

So let us look at just the non-distressed listings for Greater Phoenix:

  • 2019 - 64.1
  • 2018 - 75.3
  • 2017 - 62.5
  • 2016 - 54.2
  • 2015 - 50.2
  • 2014 - 34.7
  • 2013 - 57.4
  • 2012 - 52.9
  • 2011 - 25.3
  • 2010 - 23.2
  • 2009 - 9.7

This is a better table and tells us that March 2019 is the second hottest of the last 11 years and similar to March 2017. In March 2017 we were feeling pretty good having experienced 3 straight years of strong growth. The only fault of 2019 is that it does not compare so well with 2018. If we ignore 2018 then it is the hottest year in the last 10. Why would anyone think the Greater Phoenix market is in trouble? I guess because people focus too much on short term trends and fail to consider the longer term perspective. I am confident that Cromford Report subscribers are not among those people.

March 18 - In the market above $500,000 we saw Greater Phoenix active listings (including UCB and CCBS) rise during February to reach a total of 5,267, which is 5% higher than last year. Does this mean the luxury market is swinging in favor of buyers?

No. The annual sales rate has rise by almost 18% in the last 12 months, so relative to demand, supply has actually grown weaker. We had 202 days of luxury inventory across Greater Phoenix on March 1. The same reading in 2018 was 228.

The luxury market is balanced when the days of inventory reading lies between 246 and 303. It would take a massive shift in the balance to get from 202 days to 334 days, where a buyer's market starts to take over.

The weakest part of the luxury market is over $2 million. There we see 30 months of inventory, far above the 11 months we find for homes between $1 million and $2 million. This in turn is much higher than the 6 months that exists for homes between $500,000 and $1 million. It is the range between $1 million and $2 million that has shifted most in favor of sellers; quarterly sales are up 7% from a year ago while active listings without a contract are down 7%.

March 15 - The ranking table of annual average price per square foot has been published for March and it is striking how much the outlying areas have out-performed the inner parts of the valley.

Top locations for appreciation between March 2018 and March 2019 are:

  1. Tonopah - up 43.7%
  2. Arizona City - up 18.5%
  3. Coolidge - up 16.0%
  4. Youngtown - up 15.8%
  5. Wickenburg - up 15.6%
  6. Carefree - up 14.1%
  7. Casa Grande - up 11.8%
  8. El Mirage - up 11.3%
  9. Florence - up 11.2%
  10. Tolleson - up 11.0%

Of the top 6, only Youngtown could be considered part of the central area, and it is certainly one of the least expensive of those areas, even after an almost 16% rise in average $/SF.

In the top 10, 7 are locations on the outer edge of the valley. The remaining 3 are in the inner West Valley.

March 14 - The Cromford® Market Index values for the single-family markets in the 17 largest cities are shown below:

This shows that the recent strength in the market is intensifying with 12 out of the 17 cities showing improving conditions for sellers. No sign here of us getting close to a buyer's market (below 90).

Maricopa, Scottsdale and Peoria are the main holds outs for the pessimists.

The average change over the past month is 3.8%, up from 1.7% last week.

Avondale is not only on top of the table, it has the highest percentage improvement over the past month. Cave Creek, Paradise Valley, Glendale, Goodyear and Fountain Hills are all up 6% or more.

March 12 - The general perception out there seems to be that the housing market is in trouble. I am simply NOT seeing evidence of that in Phoenix. Yes, the market is cooler than last year, but the first half of last year was unusually strong and makes a difficult comparison. If we are to be fair to 2019 we should compare it with long term averages and not try to create alarming headlines to attract readers' eyeballs.

So let us look at a series of measurements over the next several days and see how 2019 is doing. First off is the listing success rate:

We are currently running at an 82.4% success rate. This means that in the last month 82.4% of listings that terminated were closed and 17.6% were either cancelled or expired. This is a very high success rate by long term standards. The average over the last 18 years is 64.1%. You will notice there was a big dip in January but this happens every year because a large number of listings expire on December 31.

On March 11, 2018 the success rate was higher - 83.8% - but not a lot higher. 2019's success rate is better than 2017 (80.9%), 2016 (76.4%), 2015 (73.0%), 2014 (70.1%), 2013 (79.2%), 2012 (79.0%), 2011 (65.2%), 2010 (63.2%), 2009 (47.2%), 2008 (32.7%), 2007 (44.0%), 2006 (57.5%). All of these were measured on March 11.

We have to go all the way back to the bubble year of 2005 (84.3%) to find another year with a higher success rate as of March 11.

If anyone thinks 2019 is bad, then I have to conclude they have no idea what bad looks like.

March 11 - With the unverified affidavits counted from Maricopa and Pinal counties we can give you a reasonable estimate of the iBuyer transaction counts in February and how they compare with last year. These are not the final numbers, based on verified data. Those will be published, in a couple of weeks or so, on the Tableau charts within the Cromford Public section of our site, but the numbers below should not be too far from the truth.

  Opendoor OfferPad Zillow All iBuyers Combined
Homes Purchased in February 2019 246 70 133 450
Homes Purchased in February 2018 245 76 0 321
Annual Change in purchases 0% -8% N/A +40%
Homes Sold in February 2019 228 76 77 381
Homes Sold in February 2018 226 131 0 357
Annual Change in Sales +1% -42% N/A +7%
Median Purchase Price in February 2019 $232,950 $220,443 $326,900 $250,079
Median Purchase Price in February 2018 $236,300 $207,250 N/A $230,000
Median Sale Price in February 2019 $254,363 $250,608 $320,675 $267,547
Median Sale Price in February 2018 $233,500 $234,900 N/A $234,000
Homes in Inventory at the End of February 1,129 411 406 1,946

Although iBuyer purchases are up 40% overall from February 2018, all this growth is accounted for by the new entrant Zillow. There has been a slight decline in purchase volumes for the original 2 players.

On the sales side, growth is more modest at 7%, with OfferPad's February sales far below their total in February last year.

The median prices for both purchases and sales have increased for iBuyers as a whole, because Zillow is operating over a broader price range than the original 2 players. While Opendoor and OfferPad still concentrate most of their attentions on the low end of the market, Zillow frequently buys homes in the mid range. As a result they often take a bit longer to sell them.

Gross margins are highest for OfferPad, with Opendoor in the middle and Zillow operating on the smallest gross margins.

March 8 - As a follow up to the post on March 6, here are the areas which have seen the greatest increase in their annual sales rate over the past year:

ZIP Code 2018 Sales Rate 2019 Sales Rate Change
Arlington 85322 0 6 infinite
Aguila 85320 4 8 +100%
Phoenix 85034 7 14 +100%
Stanfield 85172 3 5 67%
New River 85087 177 236 +33%
Superior 85173 35 46 +31%
Rio Verde 85263 110 141 +28%
Morristown 85142 20 25 +25%
Black Canyon City 85324 24 29 +21%
Phoenix 85004 20 24 +20%
Casa Grande 85193 11 13 +18%
Phoenix 85085 462 544 +18%
Eloy 85131 103 119 +16%
Wickenburg 85390 157 181 15%
Arizona City 85123 263 300 +14%
Congress 85332 17 19 +12%
Buckeye 85396 879 977 +11%
Surprise 85387 369 409 +11%
Scottsdale 85266 385 422 +10%
Scottsdale 85255 1,038 1,135 +9%
Surprise 85378 1,465 1,594 +9%

This includes many of the most obscure and little-known parts of the valley. If your friend thinks they really know Phoenix real estate well, ask them to point out Stanfield and Arlington on the map.

March 7 - Below is a chart showing the Cromford Market Index for the single-family markets in the 17 largest cities by dollar volume:

The market is improving for sellers with 10 cities rising while 7 have been falling over the past month. The average change is +1.7%, a significant improvement from -1.1% last week.

Leading the way upward are Avondale, Paradise Valley, Glendale and Fountain Hills. Notably late to the party are Maricopa and Scottsdale.

The majority of cities are showing rises over the past week, with Scottsdale, Surprise, Peoria and Maricopa the only exceptions.

Among the cities outside the top 17 the following have shown rises in their CMI in the last week:

  • Apache Junction
  • Arizona City
  • Casa Grande
  • Gold Canyon
  • Litchfield Park
  • Sun City
  • Tolleson

The following declined over the past week:

  • Anthem
  • El Mirage
  • Laveen
  • Sun City West
  • Sun Lakes

The overall picture shows rising demand from a fairly weak level and stable but chronically low supply which is starting to decline. Sales prices continue to rise, despite the large number of list price cuts.

March 6 - Thanks to the downshift in demand, the annual sales rate for single-family homes across Greater Phoenix is down 2.7% from 77,467 to 75,366 according to the ARMLS database.

Here are the ZIP codes with the greatest reduction in annual sales:

ZIP Code 2018 Sales Rate 2019 Sales Rate Change
Fort McDowell 85264 5 2 -60%
Coolidge 85128 246 191 -22%
Glendale 85305 194 154 -21%
Carefree 85377 109 87 -20%
Glendale 85303 457 366 -20%
Gila Bend 85337 10 8 -20%
Phoenix 85045 200 161 -19%
Mesa 85201 314 257 -18%
Tempe 85282 550 456 -17%
Phoenix 85020 458 383 -16%
Gilbert 85297 781 666 -15%
Maricopa 85139 406 348 -14%
Tempe 85283 454 392 -14%
Chandler 85286 805 701 -13%
Glendale 85306 381 332 -13%
Scottsdale 85257 447 390 -13%
Sun City 85351 847 742 -12%
Mesa 85215 314 278 -11%
Phoenix 85022 657 584 -11%
Gold Canyon 85118 510 454 -11%

March 4 - We have the preliminary numbers for Maricopa County recordings in February.

There were 8,015 sales in total, down 6% from last year. This is an improvement on January where sales were down 10% compared with 2018.

New home sales totalled 1,222 and were down only 1%. resales were down 7%.

The overall median sales price was $273,00, up from $260,490 in February 2018. The new home median was $340,308, barely changed from $338,906 last year because builders are focusing more attention on the entry market by building smaller homes. The re-sale median climbed from $249,900 to $260,000.

All the above include single-family and condo / townhouse properties.

March 1 - The market started the year far behind 2018 in terms of demand - the monthly sales rate was down 11% on January 1 from a year earlier while the count of listings under contract was down 17%. At the end of January these numbers had changed to down 17% and 14% respectively. At the end of February they had changed to down 8% and 12% respectively.

What can we conclude from this? First, we know the under contract count is a leading indicator for closed sales. The 17% gap at the start of January suggested that January closings would be weak and they were indeed, down 17%. The slight improvement in under contract counts to 14% down suggested a mild recovery in February. We actually saw an even stronger recovery to just 8% down. This is quite respectable when you consider that because pricing was up year over year, the dollar volume in February was $2,127 million, not far (2.6%) below 2018s $2,184 million.

At 12% down compared with last year, under contracts counts are recovering from 17% and 14% down at the beginning of the previous 2 months. We anticipate that March sales will reflect that recovery and it is possible that the sales gap could narrow further, even enough to close the dollar volume gap completely. This assumes that current trends continue, which is not certain, but reasonably likely.

February 2019

February 28 - Here is the table showing the Cromford® Market Index for the single-family markets in the 17 largest cities:

Although the market is starting to recover, the average change in the CMI compared with a month ago is -1.1%. This is an improvement from last week's observation when we saw a change of -2.2% over the month.

7 cities are already showing improvement, with Fountain Hills and Glendale leading the charge. The remaining 10 cities are showing deterioration compared with January 28, with Maricopa, Peoria and Scottsdale down the most.

If we compare the CMI values with last week's table we see that 10 cities have higher CMIs than a week ago.

Higher are:

  • Avondale
  • Glendale
  • Gilbert
  • Mesa
  • Fountain Hills
  • Tempe
  • Paradise Valley
  • Queen Creek
  • Goodyear
  • Cave Creek

Unchanged is:

  • Chandler

Lower are:

  • Surprise
  • Phoenix
  • Scottsdale
  • Peoria
  • Maricopa
  • Buckeye

It is only in the last week that the CMI trend has changed, but the market is no longer deteriorating and is slowly moving in favor of sellers.

February 27 - Following the government shutdown, the Census Bureau is running about 4 weeks behind and has only just published the residential building permit numbers for the month of December. We can summarize them by stating that they were unusually strong for single-family and unusually weak for multi-family. You can see full details of the numbers broken down by county in the Cromford Public section of our web-site.

February 26 - The S&P/ Case-Shiller® Home Price Index® was published today covering the 3 months October through December 2018.

Here are the 20 focus cities ranked by their month to month change in home price index:

  1. Los Angeles +0.25%
  2. Las Vegas +0.17%
  3. New York +0.17%
  4. Miami +0.09%
  5. Atlanta +0.07%
  6. Phoenix +0.05%
  7. Dallas +0.03%
  8. Charlotte -0.04%
  9. Tampa -0.05%
  10. Denver -0.14%
  11. Washington -0.18%
  12. Portland -0.28%
  13. Cleveland -0.36%
  14. Detroit -0.39%
  15. Boston -0.47%
  16. Minneapolis -0.50%
  17. Seattle -0.63%
  18. San Diego -0.69%
  19. Chicago -0.70%
  20. San Francisco -1.43%

Although it only managed to eke out a tiny month to month rise, Phoenix was placed 6th out of 20 and compared favorably with the national average which was -0.14%

On a year over year basis, the HPI changes were:

  1. Las Vegas +11.4%
  2. Phoenix +8.0%
  3. Atlanta +5.9%
  4. Minneapolis +5.5%
  5. Denver +5.5%
  6. Detroit +5.3%
  7. Boston +5.3%
  8. Tampa +5.3%
  9. Charlotte +5.2%
  10. Miami +5.2%
  11. Seattle 5.1%
  12. Cleveland +4.6%
  13. Dallas +3.9%
  14. Portland +3.9%
  15. Los Angeles +3.7%
  16. San Francisco +3.6%
  17. New York +3.3%
  18. Chicago +3.0%
  19. Washington +2.7%
  20. San Diego +2.3%

In this table Las Vegas and Phoenix are a long way ahead of the rest of the pack. The national average is 4.7% and none of the 20 cities is negative year over year.

February 24 - 2019 is starting to look stronger now after a powerful third week of February. In January, we saw contract activity pick up for the second half and February seems to be doing the same, only more so. The count of listings under contract for all areas and types jumped from 9,886 to 10,600, a rise of 714 listings or 7.2% between Feb 16 and Feb 23. Surprisingly, this is a much stronger jump than in 2018 when the same week produced a rise from 11,451 to 11,896. This was only 3.9%.

The Cromford® Demand Index is firmly on the rise again having hit a low point of 86.0 on January 24 and rebounding to 89.2.

The Cromford® Supply Index is still rising but stands at 70.8, still far below the normal range of 90 to 110. However active listings without a contract are slightly lower than this time last week. If a top can be formed this early in the year, it will be a good omen. New listings are currently arriving more slowly than in 2018 and with all the new contract activity, it would not be surprising if active listing counts fell away from this point.

The simplest and clearest positive sign is that the Cromford® Market Index has turned around. It hit 125.7 last Tuesday but now stands at 126.1 with upward momentum building.

It seems that the market has finally decided it wants to warm up again, now that typical mortgage interest rates are back around 4.5% instead of close to 5%.

February 21 - Once again we show below the Cromford® Market Index numbers for the single-family markets in the 17 largest cities by dollar volume:

The picture is similar to last week with an average decline of 3.1%, a very slight improvement over -3.3% on February 14.

We have 5 cities improving for sellers and 12 deteriorating. The significant positive moves came from Glendale and Fountain Hills. The biggest deterioration came from Maricopa, Peoria, Chandler, Cave Creek, Scottsdale and Paradise Valley.

Will still have a seller's market in all 17 cities although the 5 cities at the bottom of the table are showing only a mild advantage for sellers in the 110 to 120 range.

Over most of the valley we are not seeing demand get any weaker, and a gentle recovery is underway. We are not seeing supply climb sharply either and it may peak fairly soon. The market is well behaved and losing steam slowly and gently. The overall market CMI looks poised to stabilize in the mid 120s, which is where the City of Phoenix currently lies (126.1).

At this stage, any landing looks likely to be soft and any recovery looks likely to be slow and gentle too. Of course things could change at any moment, but there seems to be insufficient downward momentum to take us into the balanced zone (90 to 110), never mind a buyer's market (under 90).

Not too much to worry about and not very much to get excited about either. Just a quieter market than 2018 and 2017 and similar in many ways to 2016.

February 20 - Comparing the annual sales rate across Greater Phoenix for all dwelling types by price range we find the following:

Price Range Annual Sales Rate Feb 18, 2019 Annual Sales Rate Feb 18, 2018 Change
up to $100K 2,039 2,968 down 31%
$100K to $125K 1,760 2,634 down 33%
$125K to $150K 3,307 4,674 down 29%
$150K to $175K 5,181 8,214 down 37%
$175K to $200K 8,737 11,181 down 22%
$200K to $225K 10,286 10,195 up 1%
$225K to $250K 10,451 9,564 up 9%
$250K to $275K 8,435 7,567 up 11%
$275K to $300K 7,164 6,545 up 9%
$300K to $350K 10,048 8,759 up 15%
$350K to $400K 7,023 6,064 up 16%
$400K to $500K 7,767 6,876 up 13%
$500K to $600K 3,654 3,047 up 20%
$600K to $800K 3,110 2,636 up 18%
$800K to $1M 1,281 1,112 up 15%
$1M to $1.5M 1,079 879 up 23%
$1.5M to $2M 392 341 up 15%
$2M to $3M 279 223 up 25%
over $3M 134 123 up 9%

A collapse in sales volume below $200K is balanced by increases in sales above this point. Especially impressive is the unit sales growth between $500K and $3M. The overall effect is a 2% drop in unit sales.

Although the annual sales rate has declined 2%, the annual dollar volume has increased 7% from $28B to $30B. With an extra $2 billion spent on residential real estate compared with the prior 12 months, the market does not look too bad to me.

February 19 - The annual sales rate has been in decline since the summer of 2018 but not uniformly across all segments of the market. Let us look first at the single-family markets in the broad geographic areas:

Segment Peak Annual Sales Peak Month Current Annual Sales Change
Phoenix & Central Valley 16,947 Apr 2018 16,544 down 2.4%
Northeast Valley 7,551 Aug 2018 7,195 down 4.7%
Southeast Valley 22,355 May 2018 21,462 down 4.0%
West Valley 23,296 Jul 2018 22,654 down 2.8%
Pinal County 8,626 Aug 2018 8,362 down 3.1%

We can see that the greatest fall in annual sales has been in the Northeast Valley (down almost 5%) in the shortest time (peaking in August).

In contrast, Phoenix and the Central Valley is down the least (2.4%) and the slowest (peaking in April).

February 18 - The lower echelons of the luxury market have performed very well over the past few months, but the upper end has been much weaker.

  • quarterly sales between $500K and $1M - up 3% from 1,402 to 1,444 (compared with the same 3 months a year ago)
  • quarterly sales between $1M and $2M - up 3% from 284 to 292
  • quarterly sales over $2M - down 14% from 83 to 71

Quarterly sales were also down year-over-year- for the rest of the market under $500K so the $500K to $2M sector has been the strongest price range, especially the $500K to $1M sector.

January 2019 saw a big jump in active listings for homes over $500K - up 19% and now 5% higher than the start of February 2018. Sales were weaker than January 2018, down 5%. Luxury sellers therefore have more competition from other sellers and fewer buyers.

February 15 - Despite the cooling in the market, and almost certainly one of the causes of this cooling, appreciation rates continue to run well above inflation. Here are the latest appreciation rates for the single-family markets in the 17 largest cities. These percentages are based on the annual average price per sq. ft. The numbers in parentheses show what the rates were 12 months ago.

  1. Maricopa 10.2% (7.9%)
  2. Queen Creek (including San Tan Valley area) 9.7% (8.3%)
  3. Mesa 8.5% (7.0%)
  4. Avondale 8.5% (9.4%)
  5. Tempe 8.2% (5.0%)
  6. Phoenix 8.2% (5.4%)
  7. Buckeye 8.2% (7.3%)
  8. Glendale 8.1% (7.0%)
  9. Gilbert 8.0% (5.4%)
  10. Surprise 7.4% (7.9%)
  11. Paradise Valley 7.0% (1.3%)
  12. Chandler 7.0% (5.0%)
  13. Cave Creek 6.6% (4.2%)
  14. Peoria 6.3% (7.0%)
  15. Goodyear 6.2% (6.1%)
  16. Scottsdale 5.7% (4.1%)
  17. Fountain Hills 3.6% (4.5%)

February 14 - Below is our usual table showing the Cromford® Market Index for the single-family markets in the 17 largest cities:

Here we see 13 cities that have deteriorated for sellers over the past month and 4 that have improved.

Fountain Hills and Glendale have the largest gains, while the largest falls took place in Paradise Valley, Maricopa, Peoria, Chandler and Cave Creek. Phoenix, Scottsdale and Queen Creek fared poorly too.

The message is that the market is significantly cooler but all 17 cities are still above the balanced zone between 90 and 110, with even Paradise Valley still in a seller's market, if only just.

The average change over the last month is -3.3%, a deterioration from -2.8% last week.

Those looking for good news for sellers do have something to cheer. The Cromford® Demand Index has reversed course and started to increase. For the overall market it has already risen from 86.0 on Jan 29 to 87.9 on Feb 14. This is the first rise in the CDI since March 2018.

Cities with rising CDI include the following:

  • Apache Junction
  • Arizona City
  • Avondale
  • Buckeye
  • Cave Creek
  • Fountain Hills
  • Gilbert
  • Glendale
  • Gold Canyon
  • Goodyear
  • Laveen
  • Mesa
  • Paradise Valley
  • Phoenix
  • Queen Creek
  • Scottsdale
  • Surprise
  • Tempe
  • Tolleson

Those with a CDI that continues to fall include:

  • El Mirage
  • Peoria
  • Sun City West
  • Sun Lakes

Overall, demand has stopped declining and is tentatively beginning to recover. Supply continues to rise, although this is normal for the season. The signals are mixed and we still need to watch vigilantly to see which direction the market decides to go.

February 12 - The crucial question of the moment is how demand is building during the early stages of the spring selling season. Here is the daily chart of listings under contract:

The same chart one year ago looked like this:

The first thing we notice is that the overall shape is quite similar. The second is that in 2018 we had just topped the 11,000 listing mark, whereas in 2019 we have not yet breached 10,000. We should also note that in 2018 we were starting from a higher base - 7,583 - some 1,282 - 20% more than the 6,301 we measured on January 1, 2019.

We can also see that in 2019 we have yet to beat the August number whereas in 2018 we had comfortably exceeded it.

The good news is that the recent growth in 2019 is looking healthy - up 55% from the Jan 1 start. In 2018 we saw a 49% growth in listings under contract at this stage. In absolute terms we are still a little behind 2018 with a year-to-date increase of 3,497 versus 3,671. However this is only a 5% shortfall, much lower than the 20% shortfall we started with.

We conclude that 2019's spring season is likely to be somewhat lower in sales counts than 2018 but not as much lower as once feared. The slump in listings under contract that we saw in December has largely been negated.

The gradual recovery in demand is reflected in the Cromford® Demand Index which has risen to 87.5 after hitting its short term low of 86.0 on January 25. This still well below normal (100) but we are now moving higher instead of lower.

February 11 - One of the reasons we like annual averages is that the large sample size tends to deliver very consistent messages. A good example is the annual average price per square foot for all areas & types. The daily chart looks like this:

Notice how the slope of the chart is very consistent for long periods of time.

We can see that the steep upward slope of August through November has been replaced by a gentle upward slope. Long term average prices are still rising but at a significantly reduced pace. This is because there is now much less of a disparity between supply and demand. Even so, demand still exceeds supply, so the direction of the chart remains upward. If supply were to exceed demand, then the chart would eventually start to slope downwards.

However, remember that sales prices are a trailing indicator, so there is a long time lag between the market balance changing and sales prices following suit.

February 8 - After 7 full days it is time to check how February is looking for both sellers and buyers.

New Listings:

New listings are arriving at a similar rate to the last 2 years. Including those still in delayed status, they are a little higher than 2018 (up 2.1%) but a little lower than 2017 (down 4.2%) for the same week. However if we look over the last 4 weeks, we are up 2.7% from 2018 and 3.4% from 2017. These are not big increases, but they do give potential buyers a little more choice. They also give sellers a little more competition. If we only count new listings that have been activated, then the first week of February saw 2,383 new listings across Greater Phoenix, compared with 2,546 in 2018 and 2,693, so we are seeing a slight decline there. The decline is almost entirely in listings priced below $250,000, which are down from 1,095 in Feb 2018 to 888. Between £250K and $500K we see an increase from 1,040 to 1,088 and above $500K a tiny decline from 411 to 407.

Active Listings:

Across Greater Phoenix, active listings without a contract have climbed from 17,964 on Feb 1 to 18,282 on Feb 8, a rise of 318 or 1.8%. During the same period last year we saw active listings without a contract rise grow from 16,132 to 16,245, a rise of 113 or 0.7%. Available supply is therefore growing faster than last year, but not at a rate that should cause concern.

Under Contract Listings:

Across Greater Phoenix , listings under contract climbed from 8,438 on Feb 1 to 9,292 on Feb 8, a rise of 854 or 10.1%. During the same period last year we saw listings under contract grow from 9,817 to 10,757, a rise of 940 or 9.6%.

This reading has given us mixed signals so far this year, with weak numbers during the first 2 weeks of January, stronger growth during the latter part of January and moderate numbers in early February. Over the last 5 weeks listings under contract have grown 48%, adding 3,013 listings, while last year they grew 41% adding 3,146. We can conclude that the gap is slowly closing but we have a long way to go to catch up with 2018. The reading on Feb 8 was still 14% behind Feb 2018, but this is better than Jan 4 when we were down by 18%.

Sellers are lowering their asking prices more now than at any time in the past 3 years with a total of $38M in price cuts during the last week. This corresponds to some improvement in demand which is reflected in the rising Cromford® Demand Index numbers.

February 7 - Once again we share the Cromford® Market Index numbers for the single-family markets in the 17 largest cities:

Only 4 cities show improvement while 13 show deterioration in the market from a seller's perspective. There are only 2 cities that have improved strongly for sellers over the past month - Fountain Hills and Glendale. Paradise Valley, Cave Creek, Goodyear and Chandler saw the most deterioration.

During the last 2 weeks of January we saw a significant improvement in the rate of homes going under contract. The first week of February was nothing special in this respect and certainly not stronger than last year, so has to be seen as mildly disappointing after the encouraging signs in late January. In addition, new listings arrived in stronger numbers during early February than they did last year, so although supply remains low overall, the gap between supply and demand narrowed for most segments of the market.

None of the 17 largest cities has entered the balanced zone between 90 and 110, but some of the smaller cities have. We see Casa Grande at 108.9, Sun City West at 105, Litchfield Park at 101.6, Gold Canyon at 99.4 and Sun City at 91.2.

In summary, demand was a little weaker than we expected and supply a little stronger. The market does not seem to have decided which way it wants to go.

February 6 - We now have preliminary numbers for iBuyer activity during January across Maricopa and Pinal counties:

Jan 2019 Opendoor OfferPad Zillow
Number of Homes Purchased 247 66 112
Number of Homes Sold 186 60 37
Average Price of Homes Purchased $250,721 $232,114 $324,589
Average Price of Homes Sold $253,091 $258,192 $323,164
Median Price of Homes Purchased $243,000 $220,520 $313,000
Median Price of Homes Sold $248,500 $247,950 $306,000
Total Value of Homes Purchased $61.9M $15.3M $36.4M
Purchase Units Annual Growth 18% -1% N/A
Sold Units Annual Growth 18% -42% N/A
Inventory at end of month 1,111 417 350
Annual Inventory Change 33% 18% N/A

Overall iBuyer purchases were up 16% over January 2018, while iBuyer sales increased by 37%.

Unsold iBuyer inventory grew by 58% over the last 12 months to a total of 1,878 homes. This includes homes not yet ready for re-sale as well as those being marketed. Clearly inventory has grown faster than transaction volume.

The January numbers are not final yet because we have to check the data carefully (for duplicates, filed in wrong county, wrong parcel, wrong date, etc.) before it is published in the Tableau charts within the Cromford® Public section of our site.

The range of gross margins achieved can be seen in the Tableau Fix and Flip charts within the Cromford Public section. The charts include filters for each iBuyer. The margins for January are not yet available, but for December 2018 the median gross margins we calculate for homes that closed were:4.1% for Opendoor, 5.8% for OfferPad and 2.5% for Zillow. Zillow tends to buy more expensive homes and the median gross margins were $9,950 for Opendoor, $13,873 for OfferPad and $5,800 for Zillow. In December iBuyer transactions represented 7% of purchases and 4.5% of sales.

Median hold times for homes that closed in December 2018 were 102 days for Opendoor, 78 days for OfferPad and 70 days for Zillow. However Zillow has sold relatively few (only a third) of the homes it has purchased so the 70 days is likely to grow over the next few months.

iBuyers have achieved significant penetration of the Greater Phoenix market since Opendoor started operation in August 2014. However they face a number interesting challenges as their business matures:

  • gross margins are lower and getting smaller as competition increases
  • hold times are lengthening, incurring additional costs
  • a large amount of capital is tied up in inventory (1,878 homes at an average of $250,000 = $464,500,000)

No doubt iBuyers are or will be pursuing additional ancillary revenue generated by their transactions, such as mortgage generation, title insurance, etc. This will help to deliver more margin out of a single home purchase and sale.

February 5 - We have preliminary numbers from Maricopa County for recordings during January 2019.

Total recorded sales for single-family and condo/townhouse properties was 6,898, down almost 10% from 7,647 in January 2018. This is a larger drop in recorded sales than we experienced in December (7.4%).

In December 2018 new home closings held up much better than re-sales, but this effect disappeared in January. New home closings numbered 944, down 9.7% from January 2018. Re-sales were down almost the same percentage at 5,954.

The overall median sales price was $270,000, up 7% from January 2018. The re-sale median was up 8% to $258,900 while the new home median was up 5% to $342,618.


February 1 - Below is the table of Cromford® Market Index numbers for the single-family markets in the 17 largest cities by dollar volume:

This gives us a mixed picture with 7 cities improving for sellers over the past month and 10 cities showing deterioration. The average change in CMI for the 17 cities is -1.4%. Last week we reported +0.7% and suggested it looked a little ominous. We expect a little more negative movement over the next 2 weeks for 2 reasons.

  1. Slow contract activity during the first 2 weeks of January led to a larger rise in active listings than last year
  2. Low contract numbers in November and January led to a very slow closing rate during January

However, we are more optimistic for sellers than we were in mid January. The second half of January saw contract activity pick up nicely and this has 2 expected results which could show up in the CMI by mid February:

  1. Active listing counts should stop rising and may start to fall back slowly in a normal seasonal pattern
  2. Closed listing counts should start to rise as the additional contract signings in January come through escrow

It is not clear if the boost in contract activity will continue into February but a combination of lower interest rates and higher FHA loan limits tends to support that outcome. We have also heard new home builder report increased buyer traffic in recent weeks.

Several cities have seen significant upticks in their Cromford® Demand Index over the past 2 weeks, including:

  • Apache Junction
  • Avondale
  • Buckeye
  • Casa Grande
  • Cave Creek
  • Fountain Hills
  • Glendale
  • Gold Canyon
  • Maricopa
  • Scottsdale
  • Surprise
  • Tempe
  • Tolleson

Notably absent from this list are Phoenix, Chandler, Mesa and Gilbert. Also relatively weak are Sun City, Sun City West and Sun Lakes, all 55+ locations.

All 17 of the largest cities remain in the seller's market zone over 110 though Paradise Valley and Goodyear look like they may drop into the balanced zone between 90 and 110.

January 2019

January 31 - Following up yesterday's post, here are the changes in the number of listings under contract over the past 2 weeks, compared with the same 2 weeks in January 2018:

Market Segment Rise in Listings Under Contract 2019 Rise in Listings Under Contract 2018 Change
Greater Phoenix all types 1,787 1,591 +12%
Phoenix - single-family 287 287 +0%
Mesa - single-family 140 148 -5%
Scottsdale - single-family 156 66 +136%
Chandler - single-family 70 50 +40%
Glendale - single-family 59 62 -5%
Gilbert - single-family 79 72 -10%
Surprise - single-family 87 57 +53%
Peoria - single-family 71 43 +65%
Queen Creek - single-family 66 79 -16%
Avondale - single-family 18 36 -50%
Tempe - single-family 32 24 +33%
Goodyear - single-family 62 46 +35%
Maricopa - single-family 28 18 +47%
Buckeye - single-family 38 54 -70%
Cave Creek - single-family 19 8 +138%
Fountain Hills - single-family 7 5 +40%
Paradise Valley - single family 5 6 -17%

The biggest positive change is in the price ranges from $500K to $1M. Here there has been a 101% increase comparing the 2 week growth in listings under contract between 2018 and 2019. This is reflected in the very good numbers in the table above for Scottsdale and Cave Creek, which have a lot of homes inside that price range.

There is also a 20% improvement in the range from $200K to $500K and a 12% improvement in listings over $1M. The bad news is that listings under contract under $200K are off by 32%. This remains a bigger market by unit count than than the market between $500K and $1M, but it is hindered by a lack of supply.

January 30 - It looks like closings will be pretty dismal in January 2019. January is always a very slow month for closed listings and after low contract activity in November and December it would be surprising if January's count was anything other than bad. After 4 complete weeks of January we are at 4,166 for Greater Phoenix (all dwelling types), which is down from 4,847 at the same point in 2018. That's a 14% drop.

However, things are looking more positive when we look at contracting activity in January, especially over the last 2 weeks.

For all areas & types across the ARMLS database, we have grown from 7,253 to 9,077 listings under contract, a rise of 25%. In the same 2 weeks last year we saw an increase from 8,765 to 10,389, a rise of under 19%. We are still far behind, but catching up at a surprisingly speedy rate.

What is even more impressive is that the absolute number of listings under contract grew by 1,824 compared with 1,624 last year, a 12% improvement.

I am not ready to pop any champagne corks, but this is strong evidence of a surge in buyer interest over the past 2 weeks. The market started the year very cool compared to 2018, but is now heating up much faster than last year. This is great news for sellers and suggests that buyers should act fast before the real buying season gets underway and they have to deal with more competition from other buyers

It seems likely (but not certain) that the Cromford® Market Index will continue to decline for a short while yet due to the low closing rate, but as active counts top out and contracts and closings start to climb, I would cautiously expect the index to reverse direction and start increasing again before too long. A buyer's market looks increasingly unlikely to happen in 2019.

January 29 - The last Tuesday of every month is the date for release of the S&P/Case-Shiller® Home Price Index® data.

This month the sales period covered is September through November 2018 and here are the month to month percentage changes for the 20 focus cities:

  1. New York +0.43%
  2. Tampa +0.38%
  3. Phoenix +0.32%
  4. Miami +0.32%
  5. Atlanta +0.28%
  6. Dallas +0.20%
  7. Charlotte +0.16%
  8. Boston +0.08%
  9. Las Vegas -0.01%
  10. Washington -0.02%
  11. Minneapolis -0.16%
  12. Los Angeles -0.30%
  13. Denver -0.32%
  14. Detroit -0.35%
  15. Portland -0.48%
  16. San Diego -0.63%
  17. Cleveland -0.66%
  18. Chicago -0.69%
  19. San Francisco -0.71%
  20. Seattle -0.73%

More than half of the cities had a negative move between October and November although the national average was still positive at +0.05%. Phoenix slipped from 1st to 3rd place being overtaken by New York and Tampa.

For the year over year change we get:

  1. Las Vegas +12.0%
  2. Phoenix +8.1%
  3. Seattle +6.3%
  4. Atlanta +6.2%
  5. Denver +6.2%
  6. Minneapolis +5.8%
  7. Detroit +5.7%
  8. Tampa +5.7%
  9. San Francisco +5.6%
  10. Boston +5.6%
  11. Charlotte +5.5%
  12. Miami +5.0%
  13. Cleveland +4.6%
  14. Los Angeles +4.4%
  15. Portland +4.4%
  16. Dallas +4.0%
  17. New York +3.5%
  18. San Diego +3.3%
  19. Chicago +3.1%
  20. Washington +2.7%

The national average was 5.2%. Phoenix remains well ahead of that number though far behind Las Vegas.

No city is showing negative appreciation on a year over year basis.

January 26 - For those in search of good news for sellers, pickings have been thin for the last few weeks, but we have something this morning.

Greater Phoenix listings under contract increased substantially between January 19 and January 26, from 7,194 to 8,175, an increase of 13.6%. Last year we saw an increase of only 10.2% to 9,597. We are still some way behind last year in under contract listing counts, but we have started to catch up rather than fall further behind.

One week does not make a trend, but this is something for the optimists among us to hang their hat on.

The breakdown by price range is also interesting:

  • listings under $250K were up 13.5%
  • listings between $250K and $500K were up 13.8%
  • listings between $500K and $1M were up 15.3%
  • listings over $1M were up 8.%
  • there was no growth in listings over $2M

There is a developing theme - the relative strength of the market in homes priced between $500K and $1M, with $800K to $1M the top performing range within that group.

January 25 - Since the critical factor at the moment is contracting activity, it makes sense to study the contract ratio for the market as a whole as well as various segments. The contract ratio tells us what proportion of the unresolved listings on ARMLS are under contract, compared with those without any contract. Under contract means they are pending, UCB or CCBS status. Resolved means they are closed, expired or cancelled. Delayed or temporarily off market listings are ignored.

The contract ratio is a seasonal measurement so we need to compare January 25, 2019 with other January 25 numbers from prior years.

Market Segment Contract Ratio 2019 Contract Ratio 2018 Contract Ratio 2017 Contract Ratio 2016
All areas & types 43.7 56.2 49.3 42.1
Greater Phoenix - Single-Family Detached 45.0 59.6 51.2 44.4
Greater Phoenix - Townhouse 54.1 66.9 63.0 51.2
Greater Phoenix - Apartment Style 40.6 56.2 48.8 39.2
Greater Phoenix - Gemini / Twin 50.5 60.2 64.7 53.1
Greater Phoenix - Patio Home 48.4 49.1 47.8 44.9
Greater Phoenix - Mobile Home 48.1 37.3 34.7 27.3
Phoenix SFD 43.7 67.9 58.7 56.3
Mesa SFD 55.7 87.0 61.6 50.5
Scottsdale SFD 27.0 29.1 24.8 21.8
Chandler SFD 59.6 102.5 70.4 57.5
Glendale SFD 58.9 76.5 75.6 66.2
Gilbert SFD 61.0 94.4 76.7 64.4
Surprise SFD 58.3 78.3 58.5 58.4
Peoria SFD 43.4 60.4 57.1 43.4
Queen Creek SFD 54.4 76.9 64.1 51.8
Avondale SFD 61.5 66.9 84.1 67.3
Tempe SFD 60.0 100.0 68.6 55.5
Maricopa SFD 49.2 58.2 58.4 36.4
Buckeye SFD 57.3 65.6 49.2 46.1

The overall market is cooler than 2017 and 2018 but slightly hotter than 2016.

We note that mobile homes are following a different pattern and are much hotter in 2019 than they were in any of the last 3 years. In fact they have been on an entirely positive trend from 2016-2019.

We also see that Phoenix now has a significantly cooler market than in 2016, unlike the majority of cities. In contrast Scottsdale has cooled only a little compared with 2018 and is hotter than 2016 and 2017.

January 24 - It is time to look at the Cromford® Market Index values for the 17 largest cities:

At first glance this looks reasonably positive with 9 cities improving for sellers over the past month and 8 cities deteriorating. However it is not as good as last week and the average change is only +0.7% whereas last we saw +2.0%. This is a little ominous.

Paradise Valley is clearly in trouble, down 12% from a month ago, probably thanks to the terrible performance of the stock market in Q4 2018. It has dropped from 8th to 15th in just 3 weeks.

Goodyear looks like it is headed for the balanced market zone (90 to 110).

What is most concerning is the comparison with last week's numbers. 13 of the 17 cities have declined since January 17 and only 4 have improved (Buckeye, Fountain Hills, Glendale and Tempe).

It is still early in the year and we cannot reach firm conclusions, but there is little evidence so far of a fast take off for the re-sale market in 2019. Optimists will need to pin their hopes on February.

January 23 - Contracts accepted in ARMLS across Greater Phoenix during the first 3 weeks of 2019 totalled 5,259. During the same period last year the total was 5,980. The decline of 12% is significant and worse than we saw in the first 3 weeks of December (8%). Our conclusion is that demand remains weak and has shown little to no signs of recovery so far.

Almost all of the decline in contracts accepted took place in homes priced under $250,000. These were down 23% from 2,943 to 2,275. Homes between $250,000 and $500,000 declined by only 3% from 2,456 to 2,384 while homes over $500,000 increased by 3% from 581 to 600.

January 22 - After 3 complete weeks of January it is fair to compare the first 21 days of 2019 with the first 21 days of 2018.

Closed listings dropped from 3,638 to 3,121, a decline of 14%. The fall was slightly steeper for condos/townhouses (16%) and even steeper for mobile homes (22%).

As expected, due to lack of inventory, closings dropped the most for homes under $250K, falling by 24%. The mid-range from $250K to $500K was down only 4% while the lower reaches of the luxury sector, from $500K to $1M saw a 3% gain in 2019. The upper end of the luxury market was not so fortunate, dropping 20% compared to 2018.

January 21 - The Cromford Market Index stayed fairly level through most of December and the first half of January but has started to drift a bit lower. Here is the short term chart:

Although the index is still above 130, it is losing a bit of altitude because:

  • active listing counts are rising
    • new listings have started to arrive slightly faster than they did in January 2018
    • active listings are going under contract a little slower than usual
  • closing rates are still a little slower than usual for what is usually a very slow month
  • pending, UCB and CCBS listings are growing from a very low level, but not at a particularly impressive rate

Most agents, sellers and developers were probably hoping for a better reaction to 30-year fixed interest rates moving back down to about 4.65% from the 4.85% level. From the evidence so far, demand has not emerged from the doldrums that started last September.

The changes are not enormous but the market is slowly moving in favor of buyers. It still has a long way to go before we can truly describe it as a buyer's market. What happens immediately after the Super Bowl will be crucial, because in a strong year, this is when we see contract activity pick up dramatically.

In the past, government shutdowns have coincided with a marked loss of demand, but they have tended to be brief affairs.

January 18 - There are a number a false myths circulating in the housing industry at the moment. Many are obviously untrue when you examine the history of the market, but are often stated as if they were natural laws.

  • when interest rates rise, home prices fall - this is hardly ever true, but I hear it claimed quite often
  • when sales volumes fall, home prices fall - this is hardly ever true, but certainly happened in the great crash of 2005-2009, so is fresh in our memory

Home prices fall when supply exceeds demand by a substantial margin. If supply is lower than demand then it is extremely unlikely that home prices will fall. We can find no examples in history of prices falling when demand exceeds supply.

Rising interest rates decrease demand, but they can also decrease supply if many home owners have an existing mortgage with a low rate. If supply is abundant and interest rates rise, then it is likely that home prices will fall. However it is surprisingly uncommon to find this situation in the last 70 years. This is because interest rate have tended to fall far more often than they have risen, and because supply has tended to be low far more often than it has been abundant. At the moment, interest rates are on an upward trend (although this trend has halted recently) but supply is a very long way from being abundant, Supply remains very low by historic standards, though it is slowly increasing.

Sales volumes fall when demand falls, but this tells us nothing about supply. Supply sometimes rises when sales volume falls (as in 2005-2009). If it rises enough to exceed demand then prices will fall until the balance is restored between supply and demand. Eventually lower prices will stimulate demand (as it did between 2009 and 2013). However it is often the case that demand falls without falling enough to match supply, and in this case prices continue to rise. This has been a common situation in the last 70 years and is also the situation right now.

If demand falls so much that it matches supply, then prices stabilize. We have not reached that point, but it did occur in 2014 for a short period. Demand then bounced back and has exceeded supply ever since.

If demand falls so much that it drops below supply, then price will tend to move lower. This is a relatively uncommon occurrence, but happened between 1989 and 1991, between 2006 and 2009 and for a short period between 2010 and 2011. The 1989 and 2010 declines were very mild, but the 2006-2009 decline was a true bubble bursting. This is something that tends to happen only once or twice a century, after almost everyone who remembers it has passed on. Bubbles require a suspension of disbelief that is impossible for someone who has already experienced one. In 2005 the most popular false myth was that house prices never go down.

January 17 - The single-family markets in the 17 largest cities generate the following Cromford® Market Index information:

This does not look quite as encouraging as last week with 5 of the 17 cities showing deterioration for sellers and 12 showing improvement.

The big positive moves are in the West Valley (Avondale and Peoria) while the big negative move is in the Northeast Valley (Cave Creek).

Paradise Valley has seen conditions deteriorate quickly, having looked strong as recently as early January.

The average move over the past month was +2.0%, but this is down from +2.6% last week.

Another reference point is the high number of cities (20 out of 29) where the CMI went down over the past week:

  • Anthem
  • Apache Junction
  • Arizona City
  • Buckeye
  • Cave Creek
  • Gilbert
  • Gold Canyon
  • Goodyear
  • Laveen
  • Litchfield Park
  • Mesa
  • Paradise Valley
  • Phoenix
  • Queen Creek
  • Scottsdale
  • Sun City
  • Sun City West
  • Sun Lakes
  • Surprise
  • Tempe

Gold Canyon is the only city which has dropped below 100.

Over the past week, we have seen the demand index rise in the following:

  • Avondale
  • Buckeye
  • Casa Grande
  • El Mirage
  • Fountain Hills
  • Glendale
  • Maricopa
  • Peoria
  • Tolleson

This is rather a short list (8 out of 29 cities). Although almost all areas remain a seller's market thanks to the chronic low supply, demand is staying stubbornly weak in the majority of locations. Where we go from here is not exactly clear.

January 16 - After 2 full weeks it is fair to compare closed sales counts with the same 2 weeks last year.

Across Greater Phoenix for all dwelling types we have seen 1,980 closings, down 14% from 2018.

By price range the changes are:

  • Under $250K - down 25.2% from 1,186 to 887
  • Between $250K and $500K - down 3.9% from 893 to 858
  • Between $500K and $1M - up 7.9% from 178 to 192
  • Over $1M - down 18.9% from 53 to 43

The range between $500K and $1M has been relatively strong.

The range over $3M was particularly weak with closings dropping from 7 to 3.

January 15 - New listing counts are a little lower than last year with 4,383 added and activated in the first 2 weeks. The same period in 2018 gave us a count of 4,627, so we are looking at a drop of 5.3%. However, the use of the relatively new "Delayed" status means more listings are being added without being activated. If we examine the total number of residential listings created (whether activated or not) we find 4,684 in 2019 and 4,657 in 2018, a small increase of 0.6%.

Active listing counts are rising faster than last year because although there are a lower number of new listings activated, fewer listings are going into Pending or UCB status.

During the first 2 weeks of 2018 we saw active listing counts (excluding UCB and CCBS) climb from 16,697 to 17,667, a rise of 5.8%.

In 2019 we saw an increase from 17,339 to 18,581, a rise of 7.2%.

Unless demand starts to increase, which is certainly possible given that interest rates have eased, we expect to see active listing counts peak later in the spring than they did in 2018.

January 14 - Well 2019 is off to a rather flat start so far with most numbers well below those of January 2018.

The monthly sales rate is at 6,102 which is down 10% from the 6,816 we saw last year. Most of those sales occurred in December since the year to date count is only 1,835, down 20% from the same point last year.

Listings under contract are at 7,115, up 12.9% from 6,301 at the start of the year. The equivalent numbers in 2018 were 8,356, up 10.8% from 7,543. Although the fact that the counts are down substantially, the growth rate is a little higher, a positive signal.

Mortgage rates have dipped recently so we may see more demand arrive soon. In most years we don't really get buyers returning in large numbers until the Super Bowl is over.

In 2019 so far, new listings have been arriving at a similar rate to 2018. With the lower demand they are turning into listings with contracts more slowly, so active listing counts are rising faster than last year. However, active listing counts remain low by historic standards and unless they rise very much higher we have little chance of significant downward pressure on closed prices. List prices are more fragile as sellers adjust to the slower demand. Average price per sq. ft. for most segments remains strong, particularly when we look at pending listings.

The listing success rate stands at 74.3%, still well above the long term average, but down from 76.8% at this time last year.

Although the market is cooler and smaller than last year, it is not in any significant trouble. The CMI is drifting slightly lower, something that happens in January for most years.

January 10 - The regular Cromford Market Index table for the single-family markets in the largest 17 cities is below:

14 out of 17 cities have seen conditions change in favor of sellers over the past month and only 3 have moved the other way. Only one (Cave Creek) has moved in favor of buyers in a big way (CMI down 11%)

The West Valley is stronger with Avondale up 16% and Peoria up 13%.

Demand remains weak, but the important thing to remember is that supply is even weaker, so the balance still favors sellers, even though volumes are on a downward trend.

Prices remain on a clear upward trend.

January 9 - A few agents have contacted us to suggest that their revenue and side counts are too low in the Agent Performance Table for 2018. So far, every case has shown the table to be correct because the agents were including transactions in their totals that are intentionally not included in the table.

The most common reasons why a transaction is not included in the table are:

  • it was a land transaction not a residential sale
  • it was a new home sale that did not get a listing on ARMLS
  • it was outside of the ARMLS territory (out of area)
  • the agent was a co-listing agent or co-selling agent, not the listing agent or selling agent

We are very willing to correct any errors in the table if you find any, but please make sure you have excluded the inappropriate transactions from your comparison.

January 8 - We have just got a chance to study the affidavits that were filed in Maricopa County during December and they paint a much rosier picture of the housing market than we get from examining the ARMLS data. Why is this?

  • new home sales are holding up far better than re-sales
  • new home prices are gaining strength which is not reflected in MLS data since most new home sales are not in the MLS database

December's new home sales (single-family and condo / townhouse) totalled 1,544 which is up 10% from December 2017, while re-sales totalled 6,624, down 11% from a year earlier.

The median sales price of a new home in December was $349,990, up 6.6% from a year earlier

The median sales price of a re-sale home in December was $256,000, up 5.6% from December 2017.

This data suggests buyers are increasingly being attracted to new homes rather than the limited choice available for re-sale. They took 19% of the market in December 2018 while only managing 16% in December 2017.

January 7 - I have started to see a few writers claim that Phoenix is becoming a buyer's market. I think this is a huge stretch. It is possible that we have forgotten what a buyer's market really feels like. We have seen a noticeable downturn in demand but that alone does not constitute a buyer's market.

In a buyer's market, supply is higher than demand and currently we still have very low supply and little sign of a significant increase on the horizon. The weaker demand is still more than enough to match the current level of supply. Consequently sales prices still upwards momentum, although this has eased a little since last spring.

I also hear talk of lower prices, but this talk is not referring to closed sales prices. It refers to the fact that many sellers are adjusting their expectations and bringing list prices more in line with market conditions. This is not resulting in closed prices going lower than last year, as we would expect in a true buyer's market. In fact the average price per sq. ft. for listings under contract continues to hit new highs.

We have become used to a hot, growing market that strongly favors sellers and now that it is cooler, contracting in volume and moderately favoring sellers, we have a tendency to over-react and make more of the change than it really deserves. We have to stay calm and realistic and be guided by the numbers. These numbers look like a cooling off, not a downturn. We experienced a similar, though more severe, cooling off in 2013-2014, but the last significant downturn took place between late 2005 and 2009 and was followed by a 2 stage recovery from 2009 through 2013. There was also a mini-downturn in 2010-2011 which interrupted the recovery but had little lasting significance in hindsight.

There has been no decrease in loan approval rates and buyers have little to stop them apart from their own desires and perceptions. Many appear to think the current state of the market will mean lower prices for them if they wait to buy later. In this, they are very likely mistaken, but it will take time for them to realize this. Population growth in Central Arizona is still increasing faster than the number of homes. Despite a less friendly tax code since 2017, owning a home still makes better financial sense than renting unless you expect to own the home for less than 3 years. None of the conditions for closed prices to fall are currently in effect.

It seems more likely that demand will come back up, rather than more supply will appear out of nowhere. It is certainly possible that new facts come into play (e.g. interest rates) which could change the picture, but most measurements that impact the housing market are in normal to good ranges. Affordability has dropped below the ideal range but compared with neighboring California, we are amazingly affordable. 2019 is very unlike the situation in 2005, when almost every number was highly unusual and flashing danger signals, even though most of the population chose to ignore them.

As in most things, the numbers are more reliable that emotions. We will continue to report the natural numbers without adding any artificial ingredients.

January 5 - We have updated the Agent Production Table for 2018 to include all data in ARMLS as of January 4. You can find it here.

Based on dollar volume (not sides) the top 25 agents during 2018 were as follows:

Rank Name 2018 Dollars 2017 Dollars
1 Beth Rider $180M $159M
2 Jeff Sibbach $172M $152M
3 Andrew Bloom $123M $72M
4 Jason Mitchell $111M $114M
5 Walt Danley $110M $84M
6 Carol Royse $88M $64M
7 Robert Joffe $87M $103M
8 JoAnn Callaway $77M $75M
9 Lisa Lucky $76M $71M
10 Ashley Pickens $75M $43M
11 Joan Levinson $72M $73M
12 Carin Nguyen $71M $60M
13 Chris Karas $70M $75M
14 Jennifer Wehner $69M $64M
15 James Wexler $69M $42M
16 John Gluch $67M $72M
17 Deborah Beardsley $66M $20M
18 Kenny Klaus $66M $96M
19 Scott Grigg $62M $26M
20 Bobby Lieb $62M $51M
21 Russell Shaw $59M $72M
22 Mike Domer $57M $33M
23 Don Matheson $54M $44M
24 Jason Penrose $54M $58M
25 Bruno Arapovic $52M $24M

This table excludes:

  • agents working for home builders
  • agents working for iBuyers

If you wish to include these, the Tableau chart has filters that allow this. There may be some home builder agents that are not yet identified as such. If you spot any, please let me know.

Dan Noma handles Zillow iBuyer transactions but also acts as a non-iBuyer agent. However the volume of Zillow transactions is now so large that we have decided to include him as an iBuyer rather than a regular agent.

If you feel any of these numbers are incorrect, please let me know. Many of the top agents in this list lead large teams. In most cases all team members funnel their transactions through the team leader's MLS ID. For team that do not do this, ARMLS does not provide team member information, so I can only include other team members if you let me know exactly who was on your team during which time period. I can then aggregate the transactions under the team leader, if you so desire. Otherwise the transactions will appear under the individual team members because that is what appears on the MLS listing data.

January 3 - Below is the regular table showing the Cromford® Market Index for the single-family markets in the 17 largest cities.

Despite the lower demand we have been experiencing the market index has improved in the majority of cities over the past month. Only 5 of the 17 are showing deterioration for sellers and only 1 of these is experiencing strong deterioration (Cave Creek).

Avondale, Paradise Valley, Peoria and Tempe are showing the largest monthly improvements, mainly thanks to lower inventory.

The average monthly change in the CMI is +2.6%, an improvement from +1.9% last week.

January 2 - We started 2019 with remarkably few listings in escrow. Across all areas & types in the ARMLS database we counted 17,339 active listings, 2,561 UCB or CCBS and 3,740 pending. This gives us a contract ratio of 36.34. Now January 1 is always a low point for listings under contract (pending + UCB + CCBS), but at 6,301, 2019 is down 17% from 7,583 last year and the lowest we have seen since since 2008 when we had an unbelievably weak 3,632 during the collapse of the bubble.

There is no doubt at all that this number will grow over the next few months, bit the real question is by how much. Sellers would like to see more buyers back in the game. Buyers seems suspicious that something bad is happening to the market, but the only bad thing is the fact that so many of them are holding back. If they stopped holding back, we would be back in a hot market once more. It is an unusual situation with both supply and demand far below normal. The big question is whether they are holding back by choice (fear) or because they cannot do anything at current prices (lack of affordability). Fear can be easily overcome, given time, but prices are not likely to move lower in the current circumstances. We would need a glut of homes to hit the market and there is no sign of that coming from anywhere. Employment remains strong and typical homeowners have plenty of equity. There are very few weak hands among the sellers, even though some investors may choose to take profits at this point..

If we look at the single-family sector by price range, we find the following change in the contract ratios:

Price Range Contract Ratio Jan 2018 Contract Ratio Jan 2019 Change
$150K to $175K 88.3 68.1 -23%
$175K to $200K 91.1 63.5 -30%
$200K to $225K 75.5 55.6 -26%
$225K to $250K 67.4 52.2 -23%
$250K to $275K 62.6 45.5 -27%
$275K to $300K 60.9 45.5 -25%
$300K to $350K 52.8 39.4 -25%
$350K to $400K 40.3 35.8 -11%
$400K to $500K 37.1 32.0 -14%
$500K to $600K 34.1 25.2 -26%
$600K to $800K 28.6 25.5 -11%
$800K to $1M 21.6 17.6 -19%
$1M to $1.5M 14.1 14.8 +5%
$1.5M to $2M 12.0 9.4 -22%
$2M to $3M 7.4 12.9 +74%
Over $3M 8.6 5.6 -35%

Two price ranges are stronger than last year - $1M to $5M and $2M to $3M

The biggest percentage fall is for homes over $3M, which is not surprising given the antics of the stock market over the past 3 months. The price range up to $350K have all fallen by 23% to 30% which is a significant cooling off across a broad range of prices. The cooling effect is much less noticeable between $350K and $1M although for some reason $500K to $600K has dropped 26%.

December 2018


December 29 - Most of the market indicators are looking pretty healthy at the moment:

  • the Cromford® Market Index is now looking stable and for all areas & types stands comfortably over 130
  • the days of inventory count at 78 is just a tad higher than it was at this time last year (77)
  • average days on market are low (66), lower than last year (69) and have risen only moderately in the past few months
  • active listing counts are low by historic standards and now stand just above last year
  • listing success rate stands at 870.8% (very high), slightly down from this time last year

The primary measure that is looking rather poor is the under contract count, as can be seen in the image taken from the weekly chart below:


At 6,458, listings under contract are down 20% from 8,043 last year and at the lowest point since 2008. 2007 was also much lower the the current total,

We shall be watching closely to see what sort of ramp up we get during the first 3 months of 2019.

December 28 - We normally publish the building permit data at this point but the Census Bureau is closed due to the government shutdown so unfortunately we will not have any more permit data until the shutdown is over.

December 27 - The Cromford® Market Index numbers for the single-family markets in the 17 largest cities:

Things continue to get better for sellers, a trend which started back on November 30, although you would not think so based on some of the gloomy commentaries in the media.

The average change in the CMI values is +1.9% which compares favorably with +0.3% last week.

We see 12 cities showing improvements for sellers and only 5 showing deterioration over the past month. All 17 cities are seller's markets (over 110).

Paradise Valley and Avondale are leading the recovery, up 12% and 11% respectively. This shows it is not confined to a specific price range, as Paradise Valley is our most expensive city while Avondale is among the least expensive.

Cave Creek has the least favorable market index trend of the 17 (down 9%). This is because demand has been declining while supply remains flat. Among the cities that experienced a decline during the past month, Fountain Hills, Queen Creek, Surprise and Glendale have shown a rise over the past week. This is another positive signal as we enter the new year.

The table above is a far more positive picture for sellers than we were expecting to see based on the situation in mid November. Although demand is certainly weaker than last year, supply remains far below normal and insufficient to meet even the subdued demand. Consequently sellers remain firmly in control of the market and prices will continue to rise while this situation continues.

December 26 - The S&P/Case-Shiller® Home Price Index® numbers have been released for the latest sales period (August through October) and the 20 focus cities fared as follows on a month to month basis:

  1. Phoenix +0.70%
  2. New York +0.41%
  3. Las Vegas +0.33%
  4. Charlotte +0.30%
  5. Tampa +0.27%
  6. Atlanta +0.16%
  7. Miami +0.14%
  8. Boston +0.13%
  9. Los Angeles +0.11%
  10. Washington +0.02%
  11. Dallas +0.01%
  12. Detroit -0.02%
  13. San Diego -0.12%
  14. Minneapolis -0.13%
  15. Denver -0.28%
  16. Chicago -0.35%
  17. Cleveland -0.52%
  18. Portland -0.55%
  19. San Francisco -0.71%
  20. Seattle -1.05%

Once again Phoenix is at the top of the table having opened up a gap ahead of number 2 New York.

We see almost half of the focus cities with negative changes, but this is partly due to seasonality and the national average was +0.10%. Phoenix was seven times the national average and is over-performing again. As a result, it even made a mention in the Case-Shiller press release. Seattle took another large hit for a single month while San Francisco and Portland are slowing after very strong gains over the past 4 years.

For the year over year numbers we see:

  1. Las Vegas +12.8%
  2. San Francisco +7.9%
  3. Phoenix +7.7%
  4. Seattle +7.3%
  5. Denver +6.9%
  6. Tampa +6.4%
  7. Detroit +6.0%
  8. Atlanta +6.0%
  9. Minneapolis +5.9%
  10. Los Angeles +5.5%
  11. Boston +5.4%
  12. Charlotte +5.0%
  13. Portland +4.9%
  14. Cleveland +4.8%
  15. Miami +4.8%
  16. Dallas +3.9%
  17. San Diego +3.8%
  18. Chicago +3.3%
  19. New York +3.1%
  20. Washington +2.9%

The national average was +5.5% so Phoenix was well ahead of that, and it moved up to 3rd place from 5th place last month. None of the focus cities is showing a negative move year over year.

December 24 - After 3 full weeks of December we can once again make some comparisons with the same period in 2017. For December 1 to December 21

  • we have seen 4,590 new listings added, 6.0% fewer than the 4,881 we saw in 2017
  • there have been 4,668 closed listings, 5.1% fewer than the 4,919 we saw in 2017
  • we have seen 4,735 accepted offers, 8.4% fewer than the 5172 we saw in 2017

The situation with new listings is almost the same as last week, down 6% showing that sellers have little enthusiasm for today's market

Closed listings are down 5% although they were slightly above 2017 last week, so we immediately see that the third week has had a sharp drop in closing activity. Indeed, we had 16% fewer closings during the third week of December. After the first 2 weeks were roughly level, this drop is quite a major change. However it was impossible for closings to stay high indefinitely while accepted contracts continued to fall.

Accepted contracts fell further during the third week leaving us down 8.4% after 3 weeks compared with down 7% after 2 weeks. The third week of December was down 11% compared with the same week in 2017.

We hesitate to read too much into a single week of data, but it is clear that demand is not recovering. In fact it is weakening further as buyers step up their strike action. December 15 to 21 was the worst week of 2018 so far for year over year comparisons of demand. We still see low levels of supply, but demand is now so weak that active listing counts are not falling away quickly as they usually do during the second half of December. They are just drifting slightly lower.

It looks like December will probably be a low volume month in all respects: low demand, even lower supply and a low number of closings.

December 22 - We are still seeing fewer accepted contracts than in December 2017. This means active listings stay active longer so average days on market increases. It also means the count of listings under contract is much lower than last year. How much lower? Let us take a look at various segments:

Market Segment Under Contract Dec 21, 2017 Under Contract Dec 21, 2018 Change
All Areas & Types 8,558 7,229 down 15.5%
Greater Phoenix, All Types 8,365 7,072 down 15.5%
Greater Phoenix - Single-Family Detached 6,846 5,801 down 15.3%
Greater Phoenix - Condo / Townhouse 1,317 1,090 down 17.2%
Greater Phoenix - Mobile / Manufactured 202 181 down 10.4%
Greater Phoenix - Under $250K 4,078 2,922 down 28.3%
Greater Phoenix - $250K to $350K 2,087 1,972 down 5.5%
Greater Phoenix - $350K to $500K 1,191 1,200 up 0.8%
Greater Phoenix - $500K to $1M 774 761 down 1.7%
Greater Phoenix - Over $1M 235 217 down 7.7%
Northeast Valley 1,079 867 down 19.6%
Central & North Valley 1,870 1,532 down 18.1%
Southeast Valley 2,326 1,891 down 18.7%
Pinal County 842 755 down 10.3%
Paradise Valley 61 65 up 6.6%
Scottsdale 85254 98 57 down 41.8%
Peoria 85383 121 163 up 34.7%
Queen Creek 85142 167 177 up 6.0%
Sun City 85351 130 100 down 23.1%

Although the decline in listings under contract is quite noticeable, it is not at all consistent. The most significant decline is for homes below $250K. In this price segment there is a dearth of attractive homes to tempt buyers. It also seems that buyers with less than $250,000 to spend are very discouraged by higher interest rates.

There are plenty of examples of ZIP codes with higher listings under contract than last year. Among them are 85172, 85307, 85355, 85194, 85281, 85324, 85305, 85140, 85387 and 85383, all with increases of over 30%. I am struggling to find a common thread that binds those.

There are even more examples of ZIP codes with a huge fall in listings under contract, including 85040, 85332, 85131, 85233, 85284, 85043, 85087, 85377, 85303, 85044, 85304, 85210, 85254, 85045, 85018, 85048, 85119, 85248, 85249, 85379, 85262, 85206, 85390, all having more than a 33% reduction. Again there is no obvious pattern, though the area of Ahwatukee, South Tempe and South Chandler is prominently represented.

This looks to me like a buyer's strike, but one without a lot of conviction. Sellers would probably be best advised to wait it out until more buyers arrive in late January and early February. Unless sellers have a strong need to sell quickly there is no obvious reason for drastic action. The laws of supply and demand are still working in sellers' favor and a little patience will probably prove wise.

December 21 - Here is a list of the cities where the CMI is higher than it was last week:

  • Anthem
  • Arizona City
  • Avondale
  • Casa Grande
  • Chandler
  • El Mirage
  • Gilbert
  • Litchfield Park
  • Maricopa
  • Mesa
  • Paradise Valley
  • Peoria
  • Phoenix
  • Queen Creek
  • Scottsdale
  • Sun City West
  • Sun Lakes
  • Tempe

The exceptions are:

  • Apache Junction
  • Buckeye
  • Cave Creek
  • Fountain Hills
  • Glendale
  • Gold Canyon
  • Goodyear
  • Laveen
  • Sun City
  • Surprise
  • Tolleson

I think we can agree that the cities gaining advantage for sellers are more significant than the ones going the other way. These numbers are for single-family homes only.

In the overall market for all areas & types the CMI has not yet completed its downward cycle. It stands at 132.0 and was 132.3 last week. This is a very modest decline however and there is no sign of enough momentum to force it below 130.

Both the demand index and the supply index are falling, telling us that the market is getting less active. The monthly sales rate is down 9.9% while the number of listings under contract is down 14.9% from this time last year. Sales momentum has evaporated faster than prices have increased, which means dollar volume is moving lower. This is bad news for agents, lenders and title companies, but because supply remains weaker than demand, sellers should not be fooled into thinking that buyers now have an advantage.

Sales may take longer and time on market may increase, but we do not have the right conditions for prices to decline. Based on the CMI staying above 130 we anticipate upward pressure on pricing to continue. The only city with a CMI below 110 is Casa Grande at 101 and even here it rose from 100.5 last week.

December 20 - A Christmas present for sellers in the Cromford® Market Index table this week. The following is for the single-family markets in the 17 largest cities.

A much greener table than those we have published for the past 2 months, we have 11 cities showing improvements for sellers and only 6 still deteriorating. The recent downturn is now complete as the overall average change in the CMI in this table is +0.2% instead of the -1.5% we reported last week.

Paradise Valley and Maricopa are the strongest upward movers, while Glendale, Queen Creek and Surprise are the primary downward trending cities.

Remember that the CMI tells us about the balance between buyers and sellers. It does not tell us about the size of the market. Both supply and demand are weak at the moment so the market is contracting. That means fewer transactions and less business to go round. However those worried about falling prices can take some comfort. The numbers in the table above support significant upward pricing pressure. This means homes will probably get even more unaffordable and sales volumes are likely to fall further. Listings are receiving remarkably few acceptable offers in the middle of December, but we are also seeing very low numbers of new listings.

Normally when demand goes weak we see a build up of supply, but in this cycle, we are not seeing this effect..

December 17 - We now have 2 complete weeks of December data in hand so it is fair to compare with the same 2 weeks in past Decembers:

  • we have seen 3,268 new listings across Greater Phoenix, 6% lower than the 3,478 we saw in 2017 and the second lowest total after 2014
  • there have been 2,949 closed listings across Greater Phoenix, slightly above the 2,937 we saw in 2017
  • there have been 3,340 accepted offers on listings across Greater Phoenix, down 7% from the 3,607 we saw in 2017

At 6% the drop in new listings is not as severe as for the first week of December which was down 11%. However it indicates we still see subdued flows of new supply in December, well below the average over the past 18 years.

Closings are running at a good pace, but new contracts are now down 7% having been down 4% after the first week. Buyer enthusiasm is low partly because of higher cost of ownership but also because there is a shortage of attractive inventory for them to choose from.

The combination of low contracts and normal closings means that the number of listings in escrow is unusually low and declining further. This means there is excess capacity at title companies and we will enter January with an extremely low number of homes under contract.

December 16 - Demand is lower today than it was this time last year, but the decline is modest compared with the downturns of 2006-8, 2010 and 2013-14.

One way of measuring demand downturns is to look at the contract ratio. This indicator has the advantage of being applicable to small sectors of the market but it is subject to seasonality. We can avoid the seasonality effects by comparing the same dates in different years. Let us take a look at December 2018 versus December 2017 to see how much the contract ratio has changed.

On December 15, 2018 the contract ratio for all areas & types across the ARMLS database stands at 40.9. This is a 19% decline from 50.8 on December 15, 2017 - a noticeable downturn but not a dramatic one.

On December 15, 2013 the contract ratio was 35.6 and had suffered a 54% decline since December 15, 2012 when it was 78.0. We can see that the downturn that started in mid-2013 created more than twice the annual decline that we are seeing in mid-December 2018. This was a dramatic fall, but it was not enough to stop prices from rising. It did cause them to rise at a much lower rate however.

On December 15, 2010 the contract ratio was 43.2 having been 52.2 a year earlier. This was a 17% decline and gives us a similar percentage decline to the one we experiencing today. In 2010 the fall in demand was due to the expiry of large government incentives to encourage home purchases. This occurred during a period when delinquency rates for home loans were very high and negative equity was widespread. New supply was pouring onto the market, much of it distressed in the form or short sales or lender owned homes. As a consequence the price rises experienced between 2009 and 2010 were given up again in 2011 to reach a second low point.

In 2018, home loan delinquencies are at an extremely low level and home equity is at a high level. Consequently the fall in demand is merely causing sales rates to drop and allowing buyers a little more negotiation power than a year ago. This is likely to lead to a slower appreciation rate but is very unlikely to lead to home values falling.

Before buyers get too excited about their improving circumstances, we should point out that this is because there are slightly fewer of them about. The supply is still very low by long term standards. In fact the total number of active listings on ARMLS as of December 15, 2018 is the lowest we have recorded for any December 15 since 2004, which was close to the height of the bubble. Indeed it is the second lowest total for December 15 since our records began.

December 15 - Today we are taking a deeper look into the annual sales rate and how it has changed over the past 12 months.

If we compare the annual period ending December 12 2018 with that ending December 12, 2017, we see a small increase of 0.3% over all areas and types. However single-family detached sales are down 0.2% while mobile home sales are up 7.6% and condo sales are up 2.0%. Condo sales includes the following ARMLS dwelling types:

  • Townhouse
  • Apartment Style / Flat
  • Loft Style
  • Gemini / Twin Home
  • Patio Home

Mobile home sales include:

  • Mfg / Mobile Housing
  • Modular / Pre-Fab

Sales in Greater Phoenix are up by 0.2% while out-of-area sales are up 3.5%.

Comparing the broad areas around Phoenix we find

  • the central valley is up 1.0% (all types)
  • the northeast is up 2.6%
  • the southeast is down 1.4%
  • the west is flat
  • Pinal County is up 2.4%

This demonstrates the better performance of the higher end of the market (which dominates the northeast), relatively unconstrained by supply problems. Pinal County is growing faster than Maricopa County.

December 14 - Among the 12 cities that are too small to be included in the weekly survey, the following have seem their Cromford® Market Index rise over the last week:

  • Anthem
  • Arizona City
  • El Mirage
  • Litchfield Park
  • Tolleson

7 of the 12 cities are still showing some deterioration for sellers. The overall picture is of a market stabilizing after a mild downturn. This does not bear much similarity to what we read in the press of a major retreat or even slump in the housing market. But then if the headlines did not grab your attention you would not read the adverts alongside..

The reality in Greater Phoenix is that we have shifted from a strong seller's market with high volumes to a moderate seller's market with slightly lower volumes. In due course this is likely to adjust appreciation rates from the 8%-10% level to more like 6%-8%. If the CMI drops below 120 I would change our prediction to 4%-6% but at the moment there is little sign of a fall much below 130. At a CMI of 100 we would expect appreciation Of course things could change at any point but it would need a new factor coming into play.

The housing market has seen 3 factors put a slight dent in demand:

  1. Mortgage interest rates are at a much higher level than in 2017, though still far below long term averages
  2. The cost of home ownership has risen faster than rents
  3. The tax law changes since 2018 have removed many of the tax benefits of owner-occupied housing relative to renting

We definitely do not have anything approaching a crash or a slump, which would require a large increase in supply. Supply remains weak because many existing homeowners are more reluctant to move. Doing so would require them to give up their existing cheap loan and take out a new more expensive one. They are tending to stay put, which is good news for the likes of Home Depot and home remodelling and redecorating companies.

Other parts of the country are reporting weaker markets at the upper levels, but in Greater Phoenix, the luxury market is looking strong. Supply of higher end homes is down from last year and demand is holding up rather well. Of course the luxury market in Arizona is priced like the mid-range market in many parts of California. Population flows are favoring Arizona too, so it looks as though Phoenix will have one of the leading housing markets over the coming year, even though it is likely to be somewhat less active than 2018.

December 13 - The Cromford® Market Index for the single-family markets in the 17 largest cities is shown below:

With 10 cities showing deterioration for sellers over the last month and 7 showing improvement, this is better for sellers than last week and a huge improvement from mid November when every city was deteriorating. The average change in the CMI is only -1.5%, up from -3.6% last week.

Glendale was the last city to enter the downturn but it looks like being the last to leave too. Queen Creek's market is also weak while Avondale and Surprise make up the remaining big downward movers over the past month. When we look at changes over the past week we can see the following cities improved for sellers:

  • Avondale
  • Buckeye
  • Chandler
  • Gilbert
  • Goodyear
  • Maricopa
  • Paradise Valley
  • Peoria
  • Scottsdale
  • Tempe

This list is as long as last week at 10, but there has been some change in the members with Cave Creek and Mesa dropping out while Peoria and Gilbert have joined.

Though we still have a little deterioration overall, the movement is now very slight. The overall Cromford® Market Index for all areas & types has declined from 132.8 to 132.3 which means we are still very much in a seller's market and 2019 will start with sellers still dominant. The last time buyer's had a slight advantage (CMI below 100) was July 1, 2014. The last time they had a clear advantage (CMI below 90) was November 11, 2010.


December 12 - Closings in November were sharply down from a year earlier. Many people believe the primary reason for this is the steep increase in mortgage rates that took place between September and October. According to Freddie Mac, the average rate on a 30-year fixed loan rose from 4.63% to 4.83%. We had seen an even steeper rise between January and February from 4.03% to 4.33% which did not seem to have much effect on buyer enthusiasm here in Greater Phoenix. However this earlier increase was spread over many weeks whereas the rise between September and October took place during 1 week between October 4 and October 11. The sudden sharp increase seemed to take the wind out of the sails of many buyers. It makes sense, from a timing perspective, for this to negatively affect contracts in October and closings in November.

Rates peaked at 4.94% between November 8 and November 15 and have since been on a downward trajectory. The poor performance of the stock market has driven investors into treasury bonds, raising their prices and hence lowering yields. These yields have a major influence on mortgage rates and so we are now down to 4.75% for a 30-year fixed loan as of December 6. The trend is now downward until the stock market starts booming again and money comes back out of its safe havens.

It now looks as though closings are strengthening in December and this may be because buyers are anxious to lock down their lower rates before they start to rise again.

December 11 - Trying to determine how many buyers in Maricopa County come from California is slightly complicated. We need to exclude many banks and companies like Opendoor who are headquartered in CA.

If we look only at the people who buy as individuals or couples, then we see significant growth over the last year. The annual purchase rate for people with Californian addresses is up 23% to 4,391. It is also up 43% from 2 years ago.

A similar (and slightly more pronounced) situation exists in Pinal County, where purchases by Californian couples or individuals are up 30% from last year and up 47% from 2 years ago. The absolute numbers are smaller however with the annual rate at 655. This is in line with the relative sizes of the Maricopa and Pinal markets.

We conclude there is a lot of truth in the rumor than more people are moving sideways from California to Central Arizona. In doing so they can often get 2 to 3 times as much home for the same money or release equity while same-sizing. Their property taxes will also be significantly lower.

The favorite locations for 2018's Californian buyers to originate are as follows:

  1. San Diego
  2. San Jose
  3. Los Angeles
  4. San Francisco
  5. Irvine
  6. Huntingdon Beach
  7. Corona
  8. Riverside
  9. Fremont
  10. Sacramento
  11. Anaheim
  12. Long Beach
  13. Temecula
  14. Mission Viejo
  15. Rancho Cucamonga
  16. Chula Vista
  17. Carlsbad
  18. Oceanside
  19. Murietta
  20. Simi Valley

The potential inter-state movement here from California is vast and the current numbers represent only a trickle, given the total size of the Californian population.

December 10 - Now we have complete data for the first week of December we can compare the numbers for those 7 days with the same period last year. We want to know about new listings, contract activity and closed sales. Here are the numbers:

  • new listings - there were 1,649 new listings added to ARMLS across Greater Phoenix, which is 11% lower than the 1,857 we saw in 2017
  • accepted offers - there were 1,726 accepted offers within ARMLS across Greater Phoenix, which is 4% lower than the 1,807 we saw in 2017
  • closed sales - there were 1,353 closed listings across Greater Phoenix, barely changed from 1,357 in 2017

The conclusion for this particular period is that new supply was unusually weak while demand was a bit stronger than anticipated and not much below this time last year.

This is more evidence that the market is stabilizing and no longer in much of a downtrend.

December 7 - Based on affidavits filed at the Maricopa County Recorder's office in November, home sales were 6% lower in November 2018 than November 2017. However, condo and townhouse sales were up 2% while single-family detached sales were down 7%. We also note that more of the condo / townhouse sales were for owner-occupation rather than rental - 18.7% were intended to be used as rental properties in November 2018 compared with 19.4% in 2017.

The same source shows us that new home sales increased 2% year over year while re-sales declined 7%.

December 6 - Below is the table showing the Cromford® Market Index for the single-family markets in the 17 largest cities:

Now we are really starting to see some significant improvement for sellers. Most obviously 5 of the 17 cities have seen a movement in favor of sellers over the past month. The moves are relatively small, with only Paradise Valley making a significant move of 6%. We also still have 12 cities that have deteriorated, but that is distinctly better than the 16 we had last week.

The downturn still has some distance to run, but it seems to be rapidly running out of steam.

Looking at the changes over the last week, we see the following cities have a higher CMI than last Thursday:

  • Avondale
  • Chandler
  • Mesa
  • Cave Creek
  • Maricopa
  • Scottsdale
  • Paradise Valley
  • Goodyear
  • Tempe
  • Buckeye

So more than half of the cities have a higher CMI than 7 days ago. Gray clouds are all around, but that tiny silver lining we referred to on November 15 now looks very shiny and thick. We should be seeing some sunshine quite soon.

The average decline in CMI is 3.6%, down from 5.9% last week and 8.0% the week before.

The remaining problem areas are concentrated in Queen Creek, Glendale and Surprise.

All 17 cities are still over 110 and therefore seller's markets.

ecember 4 - Monthly sales totals have tended to look more robust in public records than they have in ARMLS data over the past few months. This is because volumes of new home sales and normal non-MLS sales have held up better than normal MLS sales. The strength of non-MLS sales is largely because iBuyer purchases are now some 4% to 5% of the market and about 90% of them do not involve an MLS listing until after they have been purchased by the iBuyer. It is also true that iBuyer transactions tend to create higher sales overall. What would have been a single sale prior to iBuyers entering the market becomes 2 sales - one from seller to the iBuyer and one from iBuyer to the eventual purchaser.

We now have preliminary counts for Maricopa County affidavits in November and after adjusting for the number of working days in each month we see the following year-over-year changes in sales volume for single-family homes, condos and townhomes:

  • Nov 2018 - down 5.9%
  • Oct 2018 - down 2.7%
  • Sep 2018 - up 1.5%
  • Aug 2018 - up 1.4%
  • Jul 2018 - up 5.2%
  • Jun 2018 - up 3.0%
  • May 2018 - up 3.5%
  • Apr 2018 - up 2.2%
  • Mar 2018 - up 9.0%
  • Feb 2018 - up 10.8%
  • Jan 2018 - up 0.4%

The November % change is the most negative since September 2014 (down 6.8%). However the year-over-year sales declines that we saw in 2013 and 2014 were far more severe. The worst case was December 2013 when it dropped 15.5% from December 2012.

In summary, the November affidavit counts confirm a significant downturn in demand but also imply the downturn is not as severe as we experienced in 2013 and 2014.

The affidavit counts exclude transactions that are exempt from filing an affidavit. These include HUD sales and trustee sales. They also include some REO sales filed by a few out-of-state title companies who erroneously think REO sales are exempt. They are clearly wrong, but for some reason the Arizona authorities have not sought to correct the title company misinterpretation of Arizona statutes. Servicelink, Quality Escrow and NexTitle are the primary offenders.

December 3 - The daily Cromford® Market Index chart looks like this:

looks like this:

The rate of decline reached maximum during late October and subsided during November. We are now seeing a moderate rate of decline which looks as though it might not drop much below 130.

November 2018


November 30 - The usual weekly table showing the Cromford® Market Index for the single-family markets in the 17 largest cities is shown below:

At first sight this looks pretty bad for sellers, with 16 out of 17 cities moving in favor of buyers over the past month. However there are in fact several pieces of good news for sellers buried in the details.

First of all the average decline is down to 5.9% from 8% last week.

Secondly, every city is still above 110 and therefore inside the seller's market zone.

Thirdly, we have several cities that saw their CMI rise over the past week. These are:

  • Buckeye - up from 111.4 to 112.4
  • Cave Creek - up from 142.0 to 142.6
  • Chandler - up from 159.8 to 160..7
  • Goodyear - up from 120.4 to 121.2
  • Maricopa - up from 124.4 to 127.1
  • Mesa - up from 156.4 to 157.0
  • Paradise Valley - up from 121.8 to 122.5
  • Peoria - up from 119.7 to 120.4

That is almost half of the 17 cities that have staged a turnaround, albeit by very small amounts. We can see that supply is dropping again and demand is stabilizing. The present downturn looks like it is shaping up to be both relatively minor compared to 2013 and relatively short-lived too.

Among the smaller cities outside the top 17, we are also seeing improvements for sellers over the last week in the following:

  • Anthem
  • Arizona City
  • Casa Grande
  • El Mirage
  • Litchfield Park
  • Sun City

At the moment I see only a small chance of the current trajectory taking us into a balanced market, and a buyer's market is not a likely outcome at all. This means that in the short term prices will continue to have upward momentum, although somewhat less than they had before September. Any buyers who think by opting out today they will be able to come back and find lower prices next year are very likely to be disappointed. It would take a massive change in the market for this to happen and there is absolutely no evidence of such a change in today's numbers.

November 29 - In the Cromford® Public section of this web-site we provide a chart which compares the annual average price per square foot over time for each transaction type. The current figures look like this:

  1. New homes $168.16
  2. Normal MLS sales $164.16
  3. Investor Flip sales $143.21
  4. Normal non-MLS sales $137.86
  5. Short sales $131.15
  6. Bank owned sales $124.41
  7. Pre-foreclosures $124.34
  8. GSE REO sales $115.54
  9. Trustee sales $111.21
  10. HUD sales $101.76

The annual change for these values are as follows:

  1. Pre-foreclosures 10.36%
  2. Trustee sales 10.21%
  3. Normal MLS sales 9.18%
  4. Bank owned sales 8.86%
  5. Normal non-MLS sales 8.72%
  6. Investor flip sales 8.70%
  7. Short sales 7.76%
  8. GSE REO sales 7.64%
  9. New home sales 6.32%
  10. HUD sales 4.42%

Although new homes are the most expensive transactions on a price per sq. ft. basis, the average $/SF is growing slowest apart from HUD sales (of which there are now very few). This is partly because many developers are aiming at lower price points where demand is strongest and competition from the supply of existing homes is very weak.

November 28 - It happens every year. As soon as Thanksgiving is over, the number of active listings starts to drop. For example, in the city of Phoenix, single-family listings without a contract are down from the peak of 3,263 reached on November 18 to 3,157 on November 27, a level we last saw on October 31. This is slightly higher than the 3,058 we measured on October 27 last year, but the drop in contract activity is being matched by a drop in new listing activity.

Both buyers and sellers are fewer in number than they were in November 2017. This increases competition among agents.

November 27 - The S&P/Case-Shiller® Home Price Index® numbers have been released for the latest sales period (July through September) and the 20 focus cities fared as follows on a month to month basis:

  1. Phoenix +0.75%
  2. Las Vegas +0.64%
  3. Tampa +0.58%
  4. Cleveland +0.29%
  5. New York +0.23%
  6. Atlanta +0.22%
  7. Charlotte +0.20%
  8. Miami +0.20%
  9. Detroit +0.11%
  10. San Francisco +0.02%
  11. Boston -0.01%
  12. Dallas -0.01%
  13. Chicago -0.06%
  14. Portland -0.06%
  15. Minneapolis -0.07%
  16. Denver -0.13%
  17. Los Angeles -0.16%
  18. Washington -0.23%
  19. San Diego -0.35%
  20. Seattle -1.34%

Suddenly Phoenix has jumped from the number 5 spot to top of the table

We see half of the focus cities with negative changes, but the national average was +0.08%. Phoenix was almost ten times the national average and is definitely an over-performer again. Seattle took another large hit for a single month while Las Vegas is no longer out in front in a league of its own.

For the year over year numbers we see:

  1. Las Vegas +13.5%
  2. San Francisco +9.9%
  3. Seattle +8.4%
  4. Denver +7.3%
  5. Phoenix +7.2%
  6. Tampa +6.7%
  7. Detroit +6.3%
  8. Minneapolis +6.0%
  9. Atlanta +5.7%
  10. Los Angeles +5.5%
  11. Cleveland +5.2%
  12. Portland +5.2%
  13. Charlotte +5.2%
  14. Boston +5.0%
  15. Miami +4.6%
  16. Dallas +4.3%
  17. San Diego +4.0%
  18. Chicago +3.0%
  19. Washington +2.9%
  20. New York +2.6%

The national average was +5.5% so Phoenix was well ahead of that, and it moved back to 5th place from 6th place last month. None of the focus cities is showing a negative move year over year.

November 26 - Comparing the annual non-distressed single-family sales in Greater Phoenix between November 1, 2017 and October 31, 2018 with the previous year we find that the annual sales rate increase was 2.0% and the annual average $/SF rose by 7.3%.

The top performing areas for appreciation were as follows:

  1. Florence & Coolidge (85128 & 851320 - up 15.6%
  2. Sky Harbor South (85040) - up 13.9%
  3. Far West Phoenix (85037) - up 12.1%
  4. I-10 and I-17 (85009, 85015, 85017, 85019, 85031, 85033, 85035) - up 11.8%
  5. Maricopa (85138 & 85139) - up 10.7%
  6. Southwest Phoenix (85043) - up 10.3%
  7. Tolleson (85353) - up 10.2%
  8. Sky Harbor North (85006, 85008, 85014, 85034) - up 10.1%
  9. El Mirage (85335) - up 10.0%
  10. South Buckeye (85326) - up 9.8%

The bottom performing areas for appreciation were as follows:

  1. Gold Canyon (85118) - up 3.1%
  2. South Tempe (85284) - up 3.5%
  3. North Goodyear (85395) - up 3.8%
  4. Downtown Phoenix (85003, 85004, 85007) - up 4.1%
  5. Northeast Phoenix (85050, 85054) - up 4.1%
  6. North Surprise (85387) - up 4.5%
  7. North Phoenix (85083, 85085, 85310) - up 5.0%
  8. North Scottsdale (85255, 85259, 85262, 85266) - up 5.1%
  9. South Scottsdale (85250, 85251, 85257) - up 5.3%
  10. Anthem (85086) - up 5.4%

November 24 - For the first time in many years, the monthly dollar volume today is lower than it was this time last year. This confirms the market slowdown and indicates that the drop in monthly sales volume is now having a greater impact than the annual rise in average sales price.

The last time this crossover occurred was in December 2013. On that occasion dollar volume remained lower than the prior year for 9 months but re-crossed in September 2014 and has remained above the prior year from then until today.

If history is any guide, the dollar volume is likely to remain lower for the rest of 2018 and part of 2019. However it is unlikely to remain lower for the whole of 2019. In fact we can gauge the severity of the current downturn by how long it takes to cross back over the prior year's dollar volume. We are unable to make any specific prediction for this date, but we can see that the current downturn has so far proven to be less dramatic than the one that occurred in 2013.

November 23 - Looking at the third week of November and comparing with the same period in 2017 we see the following:

  • New listings total 1,764, down 13.0% from 2017 and the lowest number we have ever recorded since 2000 for the third week of November.
  • Closed listings total 1,832, down 12.3% from 2017
  • Accepted offers total 1,875, down 9.5% from 2017

The figures above are for all dwelling types across Greater Phoenix.

Clearly the market is far less active than it was this time last year, but it is not just buyers who are down. The steepest fall was in the number of new listings, showing that sellers are also losing enthusiasm. If this trend continues we will probably find we have too much capacity in the support functions for residential real estate transactions. It appears that many potential move-up buyers are deciding to stick with the mortgage they already have. This reduces the number of sellers as well as the number of buyers but it is good news for the businesses that support home improvement.

The changes are not uniform across all price ranges:

  • Closed listings were down 25.7% for homes under $250,000
  • Closed listings were down 4.6% for homes between $250,000 and $300,000
  • Closed listings were up 17.9% for homes between $300,000 and $400,000
  • Closed listings were down 7.6% for homes between $400,000 and $800,000
  • Closed listings were up 14.5% for homes between $800,000 and $1.5 million
  • Closed listings were down 14.3% for homes over $1.5 million

November 22 - Once again we take a look at the Cromford Market Index numbers for the single-family markets in the largest 17 cities:

The market is starting to show signs of pulling out of its dive. The above table looks pretty negative for sellers but it has a few more positive elements than last week.

First we have 1 city - Paradise Valley - that showed a small improvement from last month. Second, we have an average change of -8.1%, better than the -9.2% we saw last week.

We still have every city in the seller's market zone above 110. In fact Buckeye, the closest we have to a balanced market, moved up from 110.8 last week. Fountain Hills is also higher than last week

Avondale, Queen Creek, Chandler, Tempe & Scottsdale are down by 10% or more since last month, but we still see no signs of any of these 17 cities breaching the 110 mark. Until they do, the long-term average sales price per sq. ft. is very unlikely to fall below current levels. In fact we would not expect this to become a real possibility until CMI values have dipped well below 100.

November 21 - To read the news you would that the housing market was having a really hard time. A phrase like "the worst slowdown in years" (Bloomberg) sound ominous, but we need to remember that the housing market had been growing at an accelerating pace between 2015 and 2018 and a slowdown is inevitable at some point when prices rise for many years.

Talking specifically about Greater Phoenix

  • We are having a slowdown
  • It has been expected for at least a year
  • It is quite a modest slowdown, the least dramatic in the last 20 years
  • It is still the worst slowdown in years, because it is the only slowdown since 2013/2014.
  • The 2013/2014 slowdown was much more severe that the current slowdown
  • Sales prices did not decline during the 2013/2014 slowdown, they merely stabilized for a while before resuming an upward trajectory
  • So far there is no sign that sales prices will decline due to the current slowdown
  • There are more cuts in list prices than we have seen for a good while, but these are not likely to lead to cuts in the average sales price per sq. ft. which is based on closed contract prices
  • There is no sign yet of sales prices even moderating, although that would be likely if the drop in demand continues for a long period
  • It would take a large increase in supply to start putting downward pressure on pricing, and the supply of new listings is currently getting weaker, not stronger.

To give you some idea of how benign the current slowdown is let us have a look at the average price per sq. ft. for listings under contract:

This is for all types of dwellings within Greater Phoenix.

The chart is a leading indicator of future sales pricing and shows a strong rise in prices for homes in escrow over the past 2 months.

If buyers are going on strike, waiting for prices to come down or interest rates to drop (or both), then they are likely to be disappointed. It is more likely that prices will rise (and who knows what interest rates will do?).

November 16 - During the second full week of November we made the following observations compared with the same period in 2017:

  • New listings: 2,039 in 2018 versus 2,095 in 2017, a decline of 3.3%
    • new listings under $250K fell 19% from 1,001 to 809
    • new listings between $250K and $500K rose 16% from 794 to 924
    • new listings over $500K rose 2% from 300 to 306
  • Closed listings: 1,272 in 2018 versus 1,392 in 2017,a decline of 8.6%
    • closed listings under $250K fell 20% from 720 to 574
    • closed listings between $250K and $500K rose 4.4 % from 542 to 566
    • closed listings over $500K rose 1.5% from 130 to 132
  • Accepted offers: 1,828 in 2018 versus 2,083 in 2017, a decline of 12%
    • accepted offers on listings under $250K fell 24% from 1,080 to 821
    • accepted offer on listings between $250K and $500K rose 4% from 802 to 831
    • accepted offers on listings over $500K fell 12% from 201 to 176

All the above numbers are for all property types across Greater Phoenix.

The conclusions we can make are as follows:

  1. The market is contracting with new listings, closed listings and accepted offers all down from last year
  2. Accepted offers showed the largest decline, showing that weaker demand is the primary change compared to last year.
  3. Although sales and offers have fallen in the segment below £250K, so has the supply of new listings. All have declined by a similar amount, around 20%. The market remains favorable for sellers, though much smaller than last year.
  4. New supply between $250K and $500K is arriving 4 times as fast as listings are going under offer or closing, leading to an increase in choice for buyers and weakening sellers' negotiation power.
  5. The market over $500K, which remained stronger than 2017 during October is starting to show signs of demand weakness with the 12% drop in accepted offers. New listings and closings were in balance.

November 15 - Looking at the Cromford® Market Index table for the single-family markets in the 17 largest cities we see another big downward change over the past month:

Now we have 100% of the cities showing a decline as even Glendale has surrendered. Glendale does have the lowest monthly fall at -3%. The average change is -9.2%, just 0.1% higher than last week, the tiniest of silver linings.

There are more silver linings if we look very closely.

The first positive is that every city is still over 110 and so is officially classified as a seller's market despite the big decline in buyer interest. Buckeye has stabilized in the last week and only fell 0.1 over the last 7 days. Other cities that have stabilized over the last week are Peoria and Goodyear, while Paradise Valley has managed a very slight increase over the past 2 weeks. So we would then have all 5 cities at the bottom of the table refusing to drop further. Those higher up the table are still rushing to join them in the 110 to 130 zone. It looks like Tempe, Maricopa & Fountain Hills are preparing to join the stabilized group soon, now they have dropped below 130.

Top of the table Avondale declined by the largest percentage (-16%).

The overall impression is that cities are unlikely to fall much below 110 on the current trends. This is much cooler than the market in the first half of 2018, but it certainly is not a market crash, just a return to a healthy more-balanced situation. Many potential buyers are taking a break, but it would not be surprising if they came back again once they have got used to the current interest rate environment. They are probably hoping that closed sales prices will fall, which is unlikely given the continued shortage of homes for sale. It is likely that asking prices will have to get more attractive however, which will cause sales price increases to moderate.

We clearly have a rapidly cooling market but there is absolutely no sign of serious cause for alarm in the data we are studying. Sellers will need a little more patience and flexibility on their terms and asking prices. Buyers may feel less outnumbered by other competing buyers and as a result can do their house-hunting in a less frenetic and stressful way.

Both of these seem like good news to me.

November 14 - The Home Opportunity Index (HOI) is published by the National Association of Home Builders in conjunction with Wells Fargo Bank. It calculates the percentage of homes listed for sale that could be afforded by a family earning the median income.

The chart below shows the HOI for the USA in green and for Phoenix in blue.

In the third quarter of 2018 homes were the least affordable they had been since 2008 and the HOI is no longer inside the normal range of 60-75. This helps to explain why we are seeing a weakening trend in demand.

We also see that Phoenix no longer has a significant affordability advantage over the USA as a whole, something we have had for most of the past 30 years. Houses in Phoenix are cheaper than average, but incomes are also lower than average.

November 13 - Today we make another comparison between 2013 and 2018, this time looking at listings under contract.

We can see that 2013 had much higher numbers of listings under contract, but this was primarily caused by the large number of short sales in escrow.

We can also see that although 2018 has seen a sharp fall-off in listings under contract between April and November, the decline in 2013 was steeper. Again, this shows that the cooling of the market in 2018 is not as severe as in 2013.

We note that the cooling of the market in 2013 did not cause prices to stop rising. We can deduce that the cooling in 2018 is unlikely to stop prices from rising. However it may stop them from rising quite so fast.

November 12 - Although we have entered a market down-cycle, it is much less severe than the last down-cycle which commenced in 3Q 2014. To illustrate this let us take a look at a series of charts that compare 2018 with 2013.

Here we can see that active listings have risen in 2018 from the end of July, but they have not yet exceeded the level of early April. The count for November 10 (week 45) was 22,112 (all areas and types). Our current down-cycle features a relatively small build-up of inventory.

In 2013, active listings started rising in late May and surged between July and November by roughly 7,000 listings. The count for week 45 was 26,900. This illustrates how much more severe the market slowdown was in 2013 compared with 2018. We also have far fewer active listings in 2018 than we did in late 2013.

November 9 - We like to study weeks much better than months. Weeks are more consistent in length and therefore comparing (say) week 45 of 2018 with week 45 of earlier years usually gives us an accurate understanding of how the current market compares with the past. Even if there was a holiday during a week, reducing its working-day count from 5 to 4 or even 3, the corresponding week almost always has the same working-day count. Months have the annoying habit of being inconsistent in length. Even a month like November which always has 30 days, has a variable number of working days, between 17 and 20, so comparing November 2018 with earlier Novembers is fraught with problems. Most analysts ignore this problem and compare months anyway, sometimes leading to spurious conclusions.

Anyway, we would now like to look at the week at the start of November, one which has just completed. Comparing with the same week last year we find:

  • new listings are down from 2,353 to 2,178, a drop of 7%
  • closed listings are down from 1,245 to 1,133, a drop of 9%
  • accepted offers are down from to 2,281 to 1,904, a drop of 17%

The market is clearly less busy than last year at this time. New supply is coming onto the market more slowly while existing listings are closing at an even slower rate. The biggest decline is in contract signings. This latter change is the one with the most significance and implies that higher interest rates and higher prices are finally cooling the market down, as economic theory tells us they should.

Buyers are much less active than they were last year, so despite the fact that we have more demand than supply, sellers will not be in as strong a position as they were this time last year. A corollary is that the remaining buyers are going to enjoy better negotiating power and are more likely to win concessions from sellers. This is reflected in the charts which show seller paid closing costs and price changes.

Everything is orderly and the market is operating as we would expect. This is not unusual greed or fear at work (as we would see in a bubble), just the normal operation of a cyclical market. The only slightly surprising thing is how long it took for the higher interest rates and higher prices to have an impact. In 2017 we were expecting to see this effect become clearly observable by mid-2018, but the signs were only very small at this point. Now the effects are very clear and this makes for a different market sentiment.

November 8 - Once again we are showing the table of Cromford® Market Index values for the single-family markets in the 17 largest cities:

If you thought last week's average 8.4% decline was impressive, then you will be even more impressed with the 9.3% fall we have this week.

Glendale managed a very small increase but the other 16 cities saw declines, most of them over 10%.

The common story is that listings are going under contract slower than usual which makes active listings start to build up. We are NOT seeing an increase in the number of new listings arriving.

Despite the declines, all the cities (even Buckeye) are still in the seller's market zone over 110. Remember that 100 represents normality. We expect Buckeye will drop below 110 by next week, but the overall market is still much stronger than it was for all of 2014, all of 2015 and most of 2016. We are approaching a more balanced market at some speed, but given the continued weak supply, we are very unlikely to overshoot. We would need a large increase in supply to create a buyer's market. It is not at all obvious where this extra supply would come from. The situation is very different from 2005 when tens of thousands of empty homes had been purchased by speculators with ill-advised and reckless loans. Anyone who thinks the current situation is a bubble bursting is very much mistaken. It is merely the normal process of an over-heated market cooling down, something we expect to see several times a decade. True bubbles in housing tend to occur once or twice a century.

November 6 - There was a significant decline in the number of MLS listings going under contract in October. The total of accepted offers was 8,133 which was down 2% from September (a much shorter month with 17% fewer working days) and it was down 8% from October 2017.

However the decline was not universal across all price ranges. Almost all the decline occurred in the price range up to $225,000. This saw just 2,630 accepted contracts, down 28% from 3,651. Between $225,000 and $350,000 accepted contracts rose 5% to 3,226 while between $350,000 and $800,000 they grew 10% to 2,003. Between $800,000 and $2 million there was a slight decline of 1% to 240 while over $2 million we saw a 31% increase to 34.

Seeing the huge drop-off in contracts under $225,000 we expect to see a strong upward trend in average price per sq. ft. over the coming months, since the mix of homes closing will be skewed towards the higher end.

November 5 - Looking at the affidavit counts for October in Maricopa County, we see 9,042 for single-family and condo residences, up 1.7% from October 2017. New homes sales were up 5.9% while re-sales were up only 1.0%. These sales counts do show some modest annual growth, unlike the ARMLS closings which were down year-over-year. The reason the public recordings show more growth are:

  • 90% of new home sales do not get recorded in the ARMLS database and these are still showing a healthier trend than re-sales.
  • 90% of iBuyer purchases do not get recorded in the ARMLS database and these are well up from 2017 levels.
  • October's fall in MLS sales was more severe in Pinal County (-8%) than in Maricopa County (-1%)

November 2 - This is the first month since September 2016 where months of supply (3.1) is higher than 12 months earlier. This transpired for two reasons. First, the monthly sales rate for October was unusually weak compared with the previous 24 months, especially considering it had 23 working days. Second, the active listing count rose sharply during October due to the low rate at which listings went under contract.

Although it is valid to conclude that the market is cooling, 3.1 months is still lower than average and the market is merely heading towards normality. We would consider 4 to 5 months normal for a balanced market in early November. For example November 2014's reading was 4.7 months and the market was reasonably balanced between buyers and sellers at that point.

November 1 - The cooling of the market is accelerating according to the weekly table of Cromford® Market Index values for the single-family markets in the 17 largest cities:

Here we have 16 cities deteriorating for sellers and only 1 (Glendale) improving over the past month.

All 17 cities remain in the seller's market and so those hoping for prices to fall have nothing to celebrate yet. We would need CMI values to fall below 90 for that to occur and even the lowest ranked (Buckeye) is above the balanced zone of 90 to 110.

The average change over the past month is -8.4%, the largest decline we have seen since 2013. This means we are experiencing a profound change in market conditions. The decline is not as rapid or severe as 2013, but sellers need to note that their bargaining power is on the wane. Buyers are less numerous and have lowered enthusiasm.

It is unusual to see many cities with double digit percentage declines with Paradise Valley, Buckeye, Gilbert, Mesa, Avondale, Goodyear, Chandler and Maricopa all holding that dubious honor. Among the secondary cities, Casa Grande is the weakest with a CMI of 110.8, just outside of the balanced zone.

At some point we expect this plummeting behavior to slow and bottom out. We are not seeing this yet, but it is quite likely that we see some slowing of the trend during November. Watch this section of the web sites for the earliest news of this.

October 2018

October 31 - The Greater Phoenix area is relatively unaffected by international buyers, with the single exception of Canadians. Unlike Californio or Washington State, we get little attention from the Chinese. The good news is that we are therefore seeing little to no effect from the significant downturn in Chinese buying of American real estate. This downturn is probably a consequence of the imposition of tariff barriers to trade. Chinese holders of significant commercial real estate assets have been selling many of them in 2018 to release liquid funds to repatriate. Most of these assets are on the east and west coasts.

The bad news is that Arizona is no longer attracting much Canadian interest either. The annual purchase rate across Maricopa and Pinal counties is standing at an unimpressive 768 homes for the 12 months starting October 2017. At least this is up from the low point of 564 attained in December 2016, but it is a far cry from the 4,351 we saw in February 2012.

Canadians are selling almost twice as many homes as they are buying. 1,524 is the current annual sales rate, though this has declined from a peak of 2,824 in August 2016.

So the vast majority of the housing demand across Phoenix is now coming from domestic sources. The table below shows how much annual housing demand comes from each state or territory:

  1. Arizona 92,012
  2. California 4,380
  3. Washington 1,867
  4. Illinois 1,250
  5. Colorado 1,245
  6. Minnesota 777
  7. Oregon 658
  8. Texas 654
  9. Wisconsin 505
  10. Utah 387
  11. Michigan 377
  12. Nevada 373
  13. New York 355
  14. Florida 318
  15. Iowa 302
  16. Ohio 291
  17. North Dakota 262
  18. Pennsylvania 252
  19. New Mexico 252
  20. Idaho 232
  21. Nebraska 230
  22. Missouri 224
  23. Montana 221
  24. Indiana 189
  25. Virginia 188
  26. New Jersey 162
  27. South Dakota 161
  28. Kansas 151
  29. Alaska 147
  30. Georgia 138
  31. North Carolina 131
  32. Massachusetts 126
  33. Wyoming 114
  34. Hawaii 107
  35. Maryland 106
  36. Tennessee 92
  37. Oklahoma 87
  38. South Carolina 79
  39. Connecticut 78
  40. Arkansas 39
  41. Kentucky 38
  42. Alabama 38
  43. Louisiana 33
  44. New Hampshire 31
  45. Maine 25
  46. Delaware 23
  47. Armed Forces in Europe (AE)
  48. Rhode Island 19
  49. Mississippi 18
  50. Vermont 17
  51. West Virginia 16
  52. Armed Forces in the Pacific (AP)
  53. Washington DC 11
  54. Guam 8
  55. Puerto Rico 5

The numbers indicate the annual sales rate for homes intended as first or second residences (not investment properties) and exclude purchases by the out-of-state iBuyers (Opendoor and Zillow).

Alberta and British Columbia used to rank quite high in this table, but AB is now equivalent to North Dakota and BC to Kansas.

October 30 - The S&P/ Case-Shiller® Home Price Index® numbers have been released for the latest sales period (June through August) are the 20 focus cities fared as follows on a month to month basis:

  1. Las Vegas +1.15%
  2. Tampa +0.54%
  3. Detroit +0.52%
  4. Cleveland +0.52%
  5. Phoenix +0.40%
  6. Minneapolis +0.32%
  7. Atlanta +0.30%
  8. Charlotte +0.22%
  9. Chicago +0.20%
  10. Miami +0.13%
  11. Los Angeles +0.13%
  12. Boston +0.06%
  13. Denver -0.02%
  14. Washington -0.03%
  15. New York -0.03%
  16. Dallas -0.04%
  17. Portland -0.10%
  18. San Francisco -0.29%
  19. San Diego -0.46%
  20. Seattle -1.58%

We are starting to see a larger number of cities with negative changes - 8 this month, although the national average was +0.22%. Phoenix was almost double the national average and is starting to look like an over-performer again, although it slipped from 3rd to 5th place in the table above since last month. Seattle took an unusually large hit for a single month while Las Vegas is out in front in a league of its own.

For the year over year numbers we see:

  1. Las Vegas +13.9%
  2. San Francisco +10.6%
  3. Seattle +9.6%
  4. Denver +7.7%
  5. Tampa +7.0%
  6. Phoenix +7.0%
  7. Los Angeles +6.2%
  8. Minneapolis +6.0%
  9. Detroit +6.0%
  10. Atlanta +5.8%
  11. Cleveland +5.6%
  12. Boston +5.5%
  13. Portland +5.4%
  14. Charlotte +5.2%
  15. Miami +5.0%
  16. San Diego +4.8%
  17. Dallas +4.7%
  18. Chicago +2.9%
  19. New York - 2.8%
  20. Washington +2.8%

The national average was +5.8% so Phoenix was well ahead of that, though it slipped from 5th place last month to 6th place today.

October 29 - The Cromford® Market Index for all areas and types is really diving at the moment as can be seen in the chart below:

This is partly because of more supply, but then we get more supply at this point every year. It almost always peaks around Thanksgiving and then plunges again during December. Supply is not what we need to worry about at this stage.

The primary reason for the plummeting CMI is the weakness of demand. Closed listings had been running well ahead of 2017 for most of the year but started to falter a couple of months ago. Monthly closings were 1.2% ahead of 2017 as recently as October 2. Today they are 7.3% below 2017. Pending listings are 13.5% below 2017 levels and UCB listings are down 9%.

We can argue about what is causing the drop in demand, but we can no longer argue about its existence.

October 26 - Below is a table showing the Cromford® Market Index for the single-family markets in the 17 largest cities:

Although all cities are still in the seller's market zone over 110, this is the most negative picture we have seen for a very long time.

16 of the 17 cities have deteriorated for sellers over the past month and only 1 (Glendale) has improved. Paradise Valley and Buckeye have fallen the most, representing both the top and bottom end of the price spectrum. The Southeast Valley mid-range strongholds of Chandler, Gilbert and Mesa are all down 7 to 9% while the Northeast Valley's Scottsdale and Fountain Hills are down 8%. The big West valley cities including Peoria and Surprise are holding up reasonably well in comparison. Phoenix continues to drift lower as it has for many months now.

The market is cooling fast with weakened demand being the primary culprit. Supply remains low and still inadequate to meet demand, so sales prices continue to rise. However the fall in seller negotiation power is leading to a flattening trend in asking prices across many price ranges.

We anticipate falling sales volumes, which is bad news for agents, brokers and title companies, though the downwards trend is not as steep as we saw in 2013 and 2014. Lenders will probably also see lower volumes though the rising interest rates create opportunities to increase spreads.

The rest of the USA has been reporting weaker demand for several months now. It seems that Greater Phoenix is joining the rest of the country. However we must emphasize that the current figures represent a return to normality rather than a dire situation. Loan delinquency is very low and most home owners have substantial equity, so there are almost none of the dangerous conditions that prevailed in 2006 and 2007.

October 25 - The Census Bureau has released the single-family housing permit counts for September and they are a little lower than we have been used to seeing. A total of 1,511 permits for Maricopa and Pinal counties is down 7% from 1,625 in September 2017. This means the 12 month rolling average is slightly down from 22,388 last month to 22,274 this month.

The third quarter total is still up over last year, increasing from 5,423 to 5,912.

It appears that an additional degree of caution has overtaken the home builders, though supply still remains far below demand.

October 24 - Time to check on how sales have been doing for the first 3 weeks of October:

Segment Closed Listings 2018 Closed Listings 2017 Change
All areas & types 4,372 4,639 down 6%
Greater Phoenix - all types 4,214 4,504 down 6%
Greater Phoenix - Single-Family Detached 3,479 3,711 down 6%
Greater Phoenix - Condo/Townhouse 641 691 down 7%
Greater Phoenix - Mobile Homes 94 102 down 8%
Greater Phoenix - Below $200K 884 1,413 down 37%
Greater Phoenix - Between $200K and $300K 1,694 1,611 up 5%
Greater Phoenix - Between $300K and $400K 805 749 up 7%
Greater Phoenix - Between $400K and $1M 732 667 up 10%
Greater Phoenix - $1M and over 99 64 up 55%

Overall, the unit counts are down everywhere and for all dwelling types. However the steepest drop is at the bottom end, mainly because of lack of supply. The mid range is up over last year but the increase is far less than during the first half of 2018.

For the luxury market over $1M sales have seen a very healthy increase.

These changes in the sales mix (in favor of the top end) will make the average sales price, median sales price and average $/SF all look very strong, and much stronger than the underlying change in home values. Remember this when interpreting the price charts during the fourth quarter.

October 23 - What we are witnessing in the Greater Phoenix housing market right now is nothing like a crash or a bubble deflating. However there are many clear signs that the market is softening after 3 years of growing strength. So far we have not seen enough to make any dent in the upward progress of average sales price per sq. ft. In fact this measure looks very strong in October as the market from $500K up to $3M is holding on to more momentum than the mid-range from $250K up to $500K. We should not expect to see negative changes in sales price $/SF any time soon because it is very much a trailing indicator. There are many other places to look for a change in the market and we will cover one of them today - the listing success rate.

Since exceeding 85% in mid-April the listing success rate has been gently moving lower and on October 22 we measure it below 78%.

This is still well above the long-term average but is the lowest we have seen for a long time. This means 22 out of 100 listings are failing to find a buyer instead of 15 out of 100 six months ago. Inverting the measure, the listing failure rate has increased by about 50% from below 15% to more than 22%. It sounds worse when we put it that way, but whatever way you look at it, sellers are not feeling as secure and confident as they did just a few months ago.

October 22 - In an effort to understand more clearly how the market has changed since last year we segmented the Greater Phoenix market by price range and compared the contract ratios:

Price Range Contract Ratio Today Contract Ratio Last Year Change
Under $100K 51.0 46.8 up 9%
$100K to £125K 87.4 90.6 down 4%
$125K to $150K 83.9 91.8 down 9%
$150K to $175K 92.1 95.9 down 4%
$175K to $200K 93.2 85.5 up 9%
$200K to $225K 78.6 81.2 down 3%
$225K to $250K 68.8 73.0 down 6%
$250K to $275K 57.0 67.5 down 16%
$275K to $300K 52.1 62.6 down 17%
$300K to $350K 47.7 53.8 down 11%
$350K to $400K 42.7 45.1 down 5%
$400K to $500K 39.0 38.3 up 2%
$500K to $600K 35.5 32.0 up 11%
$600K to $800K 30.3 26.8 up 13%
$800K to $1M 23.0 20.5 up 12%
$1M to $1.5M 19.7 18.8 up 5%
$1.5M to $2M 13.3 11.4 up 16%
$2M to $3M 15.0 10.8 up 39%
Over $3M 4.9 7.0 down 30%

The weakest trend is for homes priced between $250K and $350K (and also for homes over $3M, though this segment has very few sales and is therefore very volatile). Between $250K and $350K we are seeing more available supply and fewer homes going under contract. It is this lower mid-range sector which is exhibiting the most significant weakening. As this is a very high volume part of the market it affects the overall market numbers. It is also a very popular price range for new homes, which for the most part are excluded from our numbers since 90% of them are not listed on the MLS.

The strongest trend is for homes priced between $500K and $3M. Here supply has fallen 5% compared with last year while 7% more homes are going under contract. However it is not as much improved as it was during the first half of 2018.

October 20 - The Cromford® Market Index for all areas and types stands at 149.1 today. This is significant because it is lower than at the same point in both 2016 and 2017. As recently as one month ago it stood above both these years at 158.2.

The market appears to be hitting an air-pocket with falling demand and rising supply. There are a number of possible causes and probably a combination of them is driving this change in market direction:

  • mortgage interest rates have now risen enough to dampen buyer enthusiasm
  • mortgage interest rates have now risen enough to cause sellers to defer move-ups or downsizing
  • we are starting to see the end of the wave of boomerang buyers
  • home prices have risen enough to seriously affect affordability
  • interest from foreign buyers is at an extreme low (which means mostly Canada in Arizona)
  • recent tax changes have removed incentives for home ownership over rental
  • home purchase has become more expensive relative to home rental

Black Knight Financial Services estimates that the monthly mortgage payment required to buy the average home in the USA has increased 16% since January. Wages are up an average of 3% and rents are up an average of 8% across Greater Phoenix in the last year. Official government measures of inflation might be relatively low, but inflation in the cost of shelter is very high. Eventually demand is susceptible to costs rising beyond a tipping point. While rents are rising fast they are rising less fast than mortgage payments.

The CMI is a leading indicator. The most widely followed trailing indicator is sales price. This is still rising and is likely to continue to do so for several months at least.

October 18 - The market is in a cooling trend as evidenced by the Cromford® Market Index for the single-family markets in the 17 largest cities:

Here we see 13 of the cities deteriorating for sellers and of the the cities improving, only 1 (Glendale) improved by a significant percentage over the past month.

Among the declining cities, Paradise Valley, Buckeye are down by double digits. Scottsdale, Fountain Hills, Mesa and Chandler are all down 7% to 8%.

We are not getting a flood of new listings (quite the opposite in fact), but active listing counts are rising because contract activity is weakening. The Cromford Demand Index and Contract Ratio measures tell us that buyers have lost enthusiasm. However under $200,000 we still see multiple offers in most situations thanks to to the continued lack of listings within that price range.

October 17 - The contract ratio is an excellent guide to how hot or cold a market is, and we are seeing the following readings compared to October 17 last year:

Market Segment Contract Ratio 2017 Contract Ratio 2018 Change
All Areas & Types 53.0 50.0 down 6%
Greater Phoenix - Single-Family Detached 55.9 51.7 down 8%
Greater Phoenix - Townhouse 70.1 66.5 down 5%
Greater Phoenix - Apartment Style 48.9 45.0 down 8%
Greater Phoenix - Twin / Duplex 68.2 89.6 up 31%
Greater Phoenix - Patio Home 53.3 58.1 up 9%
Greater Phoenix - Mobile Home 34.1 41.5 up 22%
Single-Family - Phoenix 59.3 52.0 down 12%
Single-Family - Mesa 79.4 66.5 down 16%
Single-Family - Scottsdale 30.1 28.7 down 5%
Single-Family - Chandler 78.2 68.6 down 12%
Single-Family - Glendale 64.8 67.7 up 4%
Single-Family - Gilbert 75.9 73.8 down 3%
Single-Family - Surprise 61.0 59.8 down 2%
Single-Family - Peoria 53.7 49.2 down 8%
Single-Family - Queen Creek (including San Tan Valley) 73.6 61.4 down 17%
Single-Family - Avondale 73.0 68.8 down 6%
Single-Family - Tempe 51.0 49.6 down 3%
Single-Family - Goodyear 46.9 45.2 down 4%
Single-Family - Maricopa 65.5 57.4 down 12%
Single-Family - Buckeye 62.4 59.6 down 5%
Single-Family - Cave Creek 35.5 34.0 down 4%
Single-Family - Fountain Hills 25.2 23.2 down 8%
Single-Family - Paradise Valley 20.4 14.7 down 28%
Single-Family - Casa Grande 66.5 41.6 down 37%
Single-Family - Sun City 62.5 69.0 up 10%
Single-Family - El Mirage 162.5 98.1 down 40%
Single-Family - Apache Junction 61.3 63.3 up 3%
Single-Family - Anthem 58.8 37.6 down 36%
Single-Family - Laveen 75.4 93.2 up 24%
Single-Family - Sun City West 78.8 79.6 up 1%
Single-Family - Litchfield Park 42.9 38.7 down 10%
Single-Family - Tolleson 72.7 86.8 up 19%
Single-Family - Arizona City 35.8 72.5 up 103%
Single-Family - Sun Lakes 64.0 62.9 down 2%
Single-Family - Gold Canyon 29.0 28.5 down 2%
Single-Family - Florence 55.3 71.0 up 28%

The majority of segments are cooler than last year, with dramatic declines in Anthem, El Mirage, Casa Grande and Paradise Valley. This is a situation that has developed over just the last 6 weeks.

However mobile homes are hotter than last year, as are patio homes and twin/duplex homes and a handful of cities - Florence, Glendale, Arizona City, Sun City, Sun City West, Tolleson, Laveen and Apache Junction.

October 15 - The second week of October has continued the new trends started in the first week, an important signal for the market. New listings are well below last year but active listing counts have grown relatively fast. This means listings are going under contract more slowly. Closed listings are less numerous than last year too.

These all add up to a smaller market with lower activity, but not necessarily lower pricing. Demand is weaening but supply is also weak and needs to grow a lot if it is to match even a weaker demand level.

The Cromford® Market Index is still over 150 so we have a strong seller's market. However it is falling very fast with supply increasing and demand falling. If this trend continues for a couple of months we could be well on the way back to a balanced market. Change is in the air, but it is still too soon to be certain how this will develop. It is clear that this is an important time to be watching the market carefully.

Here are a few key numbers from the first 2 weeks of October:

Measure for first 2 weeks of October 2017 2018 Change
New Listings - Greater Phoenix 4,916 4,226 down 14%
Active Listings Change - Greater Phoenix 827 871 up 5%
Closed Listings 2,845 2,646 down 7%
Pending Listings at end of period 5,786 4,973 down 14%
UCB & CCBS Listings at end of period 3,773 3,559 down 6%


All of these changes are negative for sellers, as evidenced by the short term Cromford® Market Index chart.

October 11 - The Cromford® Market Index table for the single-family markets in the 17 largest cities is shown below:

We see 7 cities showing an improvement for sellers and 10 deteriorating. This does not sound too bad until we calculate that the average change is -2.8%, considerably worse than last week's -1.9%.

Buckeye, Fountain Hills and Paradise Valley have seen the largest declines while Tempe was the only city to see a double digit percentage improvement.

Despite the shortage of new listings, active listings are growing because fewer homes are going under contract. Over the last month there has been a decline in the enthusiasm of both buyers and sellers.

October 10 - We are examining the first week of October in more detail to study how new listing counts dropped unexpectedly. We counted 2,017 new listings in Greater Phoenix during the first full week which is down dramatically from the same week in 2017. The overall decline is 23% year over year and this is the lowest number of new listings we have ever seen for the first week of October. The previous record low was 2,343 in 2014.

  • Homes priced up to $250K dropped from 1,147 to 764, a decline of 33%
  • Homes priced between $250K and $500K dropped from 1,003 to 929, a decline of 7%
  • Homes priced over $500K dropped from 454 to 324, a decline of 29%

So the mid-range had the smallest decline while the top and bottom saw large falls in new listing counts.

If we chop more finely, we do see a handful price ranges with a growth in new listings:

  • Up to $25K increased from 5 to 6
  • $25K to $50K increased from 7 to 8
  • $250K to $300K increased from 319 to 351
  • $800K to $1M increased from 43 to 45
  • Over $3M increased from 16 to 22

Segmenting by dwelling type we see:

  • Single-family listings fell by 20%
  • Condo listings fell by 33%
  • Mobile home listings fell by 29%

Mortgage rates tend to increase when the economy is strong. According to the average 30 year fixed loan in Arizona is now at 5.01%, up from 4.83% just 7 days ago. People usually worry about higher rates discouraging buyers and while that is a reasonable concern, I am also of the opinion that higher rates discourage sellers, because in most cases they are going to move somewhere else and pay a higher rate too. If they have the option to stay put, they may choose to do so when rates are increasing.

For whatever reason, sellers are surprisingly rare this month. Even if we change the measurement week to Oct 3 to Oct 9, the picture does not change - new listings down 25% from 2,520 in 2017 to 1,885 in 2018. This latter total is once again the lowest we have ever recorded for those dates.

We live in interesting times.

October 9 - Filing the latest version of the long term interest chart on Cromford Public, it struck me that mortgage rates have been climbing very slowly but somewhat relentlessly. Freddie Mac reported an average of 4.63% during September for the 30 year fixed. This is the highest we have seen since May 2011, more than 7 years ago. Of course in 2011 this seemed like a very low rate because we had experienced rates over 6% almost continuously between 1970 and 2008, with occasional short periods in the mid 5s.

Now we have a lot of homeowners with loans bearing rates of 3.5% to 4.25% taken out over the past 7 years. To move to a new home, they will need to pay off that cheap loan and take out another at closer to 5%. This effect is likely to be a drag on the supply of re-sale homes for a long time to come. It is likely to be good news for remodelling companies as many home owners decide to preserve their cheap financing by staying in place and spending their upgrade money on improving and modernizing their existing home instead.

October 8 - After the first full week of October it is striking that the month is off to an unusually slow start.

New listings are 14% lower than they were during the same period in 2017. It is a very long time since we saw a drop-off like that..

Closed sales are also down, with 1,338 closed during the first week of October 2018, down over 10% from the 1,494 we had in 2017. The annual sales rate has taken a step lower as a result.

It is not exactly clear what is causing this, but both supply and demand are weaker than expected. One week does not make a trend, but this is so different from what we have seen so far this year that I feel I should point it out. If the rest of the month continues in this vein then it would represent a significant change of sentiment.

We will watch carefully and report whether the second week is similar to the first or gives us a snap-back to normal.

October 5 - Until September we had seen extremely strong sales numbers for the Northeast Valley's luxury single-family homes (over $500,000). Here are the comparisons with the year before:

Month Sales Year Earlier Change
December 2017 374 292 +28%
January 2018 354 265 +34%
February 2018 336 268 +25%
March 2018 549 454 +21%
April 2018 504 426 +18%
May 2018 590 504 +17%
June 2018 534 504 +8%
July 2019 438 352 +24%
August 2018 447 348 +28%
September 2018 314 338 -7%

The wheels seem to have come off the cart last month. Could we have seen this coming. Yes!

The under contract count on September 1 was down 2% from the year before, suggesting that year over year growth would stall. Now September 2018 had only 19 working days and thus a 5% disadvantage compared with September 2017. Adding that 5% to the 2% drop in under contract listings we get -7%, exactly the drop in sales during September. It does not always work this cleanly. What do we expect for October? Well the under contract count is almost identical to 2017 as of October 1, so we would anticipate roughly the same unit sales, adjusted for the number of working days. October 2018 has 23 working days compared with October 2017's 22, so this will add 5% to our estimate. We should therefore expect a resumption of sales growth this month, but only 5%, unimpressive in the context of the last 10 months.

The lack of sales is concentrated at the bottom end between $500,000 and $600,000, where unit counts fell 32% from a year earlier. This is probably connected to the shortage of supply since active listing counts are down 21% in this price range.

October 4 - The table below shows the Cromford® Market Index for the single-family markets in the 17 largest cities

We have 6 cities showing an improvement for sellers, 2 more than last week, with Glendale and Goodyear joining the other 4. However 11 cities showed deterioration for sellers and the average monthly change was 1.9%, slightly higher than the 1.8% we recorded last week. The trend remains down with rising supply and falling demand.

Tempe was the standout city for improving selling conditions while Fountain Hills, Paradise Valley and Buckeye showed significant weakness.

October 3 - Although Zillow has ramped up its purchases as an iBuyer, it has sold relatively few homes so far. The total number of homes purchased by the end of September was 157 while the total number of sales was 33, leaving 124 in inventory.

When we compare with Opendoor's start-up in 2015 and 2015, we see a similar pattern. By July 2015 they had 132 homes in inventory, having purchased 169 and sold 37. The main difference was that it took Opendoor 12 months to reach this stage and Zillow has taken less than half this time. The first mover has to prove the concept and break rocks. Followers benefit from that ground-breaking.

OfferPad has a somewhat different trajectory. They have tended to keep a lower inventory and sell their homes more quickly. By the time they had purchased 154 homes (in July 2016, they had sold 64 and only had 90 left in inventory.

Lifetime statistics as of the end of September are:

  Opendoor OfferPad Zillow
Purchases 5,945 2,175 157
Sales 5,063 1,893 33
Inventory 882 282 124

October 2 - Based on affidavit filings, the 3 main iBuyers operating in Greater Phoenix purchased 358 homes across Maricopa and Pinal counties in September. This is down from 446 purchases in August, but up from 278 in September last year.

Opendoor only purchased 188, making it their quietest month for purchases since September last year when they bought 161.

OfferPad purchased 105, in line with recent months but down from 117 in September 2017.

Zillow purchased 65, their largest total since starting in May. They seem to be stealing some market share from the other 2, possibly because they are buying at slightly higher prices. Certainly they are making less gross margin when they sell. The median gross margin for Zillow was 5% in July but only 3% in August. We have not yet been able to calculate the September number. Their 3% gross margin is immediately eaten up by commission paid to the buyer's broker, so they are living off the seller fees, to which we do not have access. This iBuyer business clearly involves a large amount of capital tied up and seriously low margins. Some may question why Zillow wishes to engage in the market, but it does seem to be growing in popularity with sellers. iBuyer transactions now represent roughly 1 in 20 home sales (excluding new homes and foreclosures).

Gross margins for Opendoor were around 6% in August and for OfferPad around 8%. Both of these are down from 8% and 11% respectively in August 2017. The additional competition seems to be causing gross margins to tighten.

September was a low activity month with only 19 working days thanks to a weekend at both ends. All the sales counts will be lower than normal for this reason.

October 1 - Nate Randleman used our Tableau chart showing average $/SF over the long term to calculate how prices had appreciated over the past 18 years. For Maricopa County the average was $97.63 in September 2000 and it was $166.51 in September 2018. The difference between these 2 numbers represents a long term average appreciation rate of only 3%.

Nate believes most clients (and probably many agents) would expect the number to be much higher since we have experienced very positive appreciation since 2011. They sometimes forget how much we went backwards between 2000 and 2011. We have spent much of the time since 2011 recovering from the crash of 2007-2008.

Overall, a long term appreciation rate of 3% is far from excessive and supports the theory that we are not significantly over-valued at today's prices.

What Nate did not know is that this Long Term Appreciation rate appears in all of our snapshots, so he could have saved himself some calculating. Here are the numbers extracted from a few of our snapshots (there are well over a hundred on the site). It may be that many of these will surprise you.

Market Segment Sub-set Long Term Appreciation (Jan 2001 - Sep 2018)
All Area & Types in ARMLS   2.9%
Single-Family Detached Anthem 2.5%
  Apache Junction 3.1%
  Arizona City 2.4%
  Avondale 2.8%
  Buckeye 3.1%
  Carefree 2.1%
  Casa Grande 1.9%
  Cave Creek 3.0%
  Chandler 3.5%
  Coolidge 3.2%
  El Mirage 3.3%
  Eloy 5.9%
  Florence 2.6%
  Fountain Hills 3.1%
  Gilbert 3.3%
  Glendale 3.4%
  Gold Canyon 2.4%
  Goodyear 2.4%
  Laveen 0.8%
  Litchfield Park 2.1%
  Maricopa 1.6%
  Mesa 3.6%
  New River 2.3%
  Paradise Valley 2.5%
  Peoria 3.5%
  Phoenix 3.6%
  Queen Creek 1.5%
  Rio Verde 2.3%
  Scottsdale 3.4%
  Sun City 3.4%
  Sun City West 3.1%
  Sun Lakes 3.3%
  Surprise 2.6%
  Tempe 3.7%
  Tolleson 2.5%
  Tonopah 1.7%
  Waddell 1.6%
  Wickenburg 2.4%
  Wittmann 4.3%
  Youngtown 3.4%


September 2018

September 28 - The Cromford® Market Index for the single-family markets in the 17 largest cities is shown in the table below:

Sellers may be dismayed to see 13 of the 17 cities showing the balance of power shifting away from them. However they can console themselves with the fact the the average shift is only -1.8% which is down from the -2.2% we saw last week. This is partly because 2 of the 4 improving cities (Tempe and Cave Creek) improved by large percentages.

Among the decliners, Buckeye (-10%) and Fountain Hills (-18%) are the most prominent, but Surprise(-7%) and Mesa (-7%) declined significantly too.

Scottsdale has changed course after a strong run in the last 3 months.

September 27 - The Census Bureau has just released the single-family building permit counts for August. The total for Maricopa and Pinal counties was 2,263, up 16% from 1,954 in August 2017. The count for the 12 months Sep 2017 to Aug 31 is 22.388 which is up 12.7% from 19,865 last year. Maricopa and Pinal account for 74% of Arizona's single-family permits.

Year-to-date in 2018 we have 16,154 permits which is up 13.6% from 2017.

The increases all exceed the increase in the overall sales rate, which implies:

  1. The market share for new homes should increase over the next year
  2. Supply should gradually improve if developers build as quickly as the permits indicate

For the past 12 months the breakdown by city is as follows:

  1. Phoenix 15.7%
  2. Unincorporated Pinal County 11.0%
  3. Buckeye 10.1%
  4. Mesa 7.9%
  5. Gilbert 6.8%
  6. Maricopa 6.1%
  7. Peoria 6.1%
  8. Unincorporated Maricopa County 6.0%
  9. Goodyear 5.9%
  10. Surprise 5.8%
  11. Queen Creek 5.2%
  12. Scottsdale 3.0%
  13. Chandler 2.4%
  14. Avondale 1.2%
  15. Florence 1.1%
  16. Glendale 0.9%
  17. Tempe 0.7%
  18. Wickenburg 0.7%
  19. Casa Grande 0.7%
  20. Eloy 0.6%
  21. Fountain Hills 0.4%
  22. Paradise Valley 0.4%
  23. Apache Junction 0.4%
  24. Litchfield Park 0.3%
  25. Cave Creek 0.2%
  26. Carefree 0.1%
  27. Coolidge 0.1%
  28. everywhere else 0.1%

September 26 - The S&P / Case-Shiller® Home Price Index® report was published yesterday covering sales during May, June and July 2018. The month to month change in indexes were as follows:

  1. Las Vegas +1.39%
  2. Cleveland +1.35%
  3. Phoenix +0.74%
  4. San Francisco +0.64%
  5. Tampa +0.61%
  6. Atlanta +0.54%
  7. Portland +0.47%
  8. Miami +0.44%
  9. Detroit +0.41%
  10. Minneapolis +0.39%
  11. Chicago +0.33%
  12. Denver +0.33%
  13. Dallas +.18%
  14. Washington +0.16%
  15. Charlotte +0.15%
  16. Los Angeles +0.13%
  17. Boston +0.14%
  18. New York +0.09%
  19. San Diego +0.01%
  20. Seattle -0.01%

Moving up from 7th to 3rd place, Phoenix is retaining more price momentum compared with the rest of the country, although it is not alone - Las Vegas and Cleveland are doing even better. The national average was +0.45%

It is quite a while since we saw a negative change in Seattle, albeit a very tiny one.

The year-over-year table looks like this:

  1. Las Vegas +13.7%
  2. Seattle +12.1%
  3. San Francisco +10.8%
  4. Denver +8.0%
  5. Phoenix +7.5%
  6. Tampa +6.8%
  7. Los Angeles +6.4%
  8. San Diego +6.2%
  9. Detroit +6.2%
  10. Boston +6.0%
  11. Minneapolis +6.0%
  12. Atlanta +5.8%
  13. Cleveland +5.7%
  14. Portland +5.6%
  15. Charlotte +5.6%
  16. Miami +5.0%
  17. Dallas +5.0%
  18. New York +3.4%
  19. Chicago +3.0%
  20. Washington +2.7%

Phoenix moves up to 5th place from 6th last month and is now well above the national average of 6.0%.

I have to admit it makes me nervous when Las Vegas is number one in both these tables.

September 25 - Consistent with the slight decline in the Cromford® Market Index we are seeing a slight decline in the listing success rate over the past 6 months. At the end of March the success rate for all areas & types was very high at 85%. Now it is merely high at 81%. This might seem like a very small drop but it does mean a 27% increase in the number of listings that failed to sell (from 15% to 19%). This is also consistent with the higher pace of price cuts that we have seen recently.


All in all, the market remains strong for sellers but not as strong as it has been and with a slow cooling trend.

September 24 - Long-time subscribers will have become familiar with the third-quarter slump in prices that happens every year in Greater Phoenix. It is not so much that home values go down; more that the sales mix moves away from more expensive properties and the price pressure from the second quarter eases away.

Despite the seller's market that prevails over the whole valley, the third quarter slump was in full force in 2018. However, it has now run its course and we can see the pressure building for another upward price trend in the fourth quarter. Take a look at the Tableau chart for Under Contract $/SF and you can see a sharp upward turn over the past few weeks. This happened at the same time in 2017 and was followed by 9 months of powerful upward movement. Unless there is a significant change in market conditions we are likely to see something similar over the next 9 months. Such a significant change would involve either a large increase in new listings or a major fall in the sales rate, neither of which are looking likely at the moment.

September 21 - One possible explanation for the low under contract counts we see these days is that lenders are taking less time to approve loan applications than they used to. This would shorten the time to close and result in fewer listings under contract for the same number of closed sales.

You would think that it would be fairly easy to check this hypothesis. It ought to be possible to measure close times by calculating the difference between the Contract Date and Close Date for each listing that closed on ARMLS. Unfortunately there are 85,044 closed listings where this calculation has a negative result, implying that the listing agent believes the purchase contract was signed AFTER the close of escrow. There are another 105,873 closed listings where the Close Date and Contract Date are exactly the same. This leads me conclude that the Contract Date data in ARMLS is of low quality and cannot be trusted. The Close Date is also of fairly poor quality, but we have the advantage of being able to cross check that date with the date the sale was recorded and therefore apply corrections to this field. At least that gets rid of the thousands of listings which are supposed to have closed on a Saturday, Sunday or public holiday (impossible since the county recorder does not work on those days).

Making the best of a bad job, we can examine the listings where the Close Date is at least 14 days later than the Contract Date. Closing times shorter than this are unlikely to have involved a third party lender. This test applies to 79% of the closed listings so it is a pretty decent sample. Using these records we find the following:

  • average closing time in 2014 was 39.9 days
  • average closing time in 2015 was 40.7 days
  • average closing time in 2016 was 42.4 days
  • average closing time in 2017 was 39.3 days
  • average closing time in 2018 was 37.6 days

This gives us evidence of a 4.5% reduction is closing time between 2017 and 2018, following a more substantial reduction of 7.3% between 2016 and 2017.

Mind you, 2018's closing times are not exceptional. We were seeing closing times of 33 to 36 days throughout the years 2001 to 2008. It seems the easier it is to get a loan approved (as in 2004 to 2006) the quicker the close occurs. That make intuitive sense. The record low was 33.8 days in 2005. 2005 was really the year of the bubble bursting, even though people tend to focus on the collapse of Lehman Brothers in 2008, a long time after its collapse became inevitable.

We know that TRID (TILA-RESPA Integrated Disclosure) lengthened closing times in the fourth quarter of 2015 and then times started improving once everyone got used to the new procedures. Let us check the quarterly numbers:

  • 2014 Q1 - 39.9
  • 2014 Q2 - 40.0
  • 2014 Q3 - 40.1
  • 2014 Q4 - 39.4
  • 2015 Q1 - 39.4
  • 2015 Q2 - 40.8
  • 2015 Q3 - 40.2
  • 2015 Q4 - 42.7
  • 2016 Q1 - 42.8
  • 2016 Q2 - 42.6
  • 2016 Q3 - 42.9
  • 2016 Q4 - 41.3
  • 2017 Q1 - 39.9
  • 2017 Q2 - 39.9
  • 2017 Q3 - 39.4
  • 2017 Q4 - 37.8
  • 2018 Q1 - 37.7
  • 2018 Q2 - 37.9
  • 2018 Q3 - 37.0

These numbers are at least consistent with the TRID story although I remain a little concerned about the quality of the data source even in the listings with reasonable sounding Contract Dates.

My conclusion is that there has been a reduction in close times over the past 2 years, but that we are now back to normal after the disruption due to TRID. The biggest drop took place in 4Q 2017. This goes some way towards explaining the reductions in listings under contract that we have reported, but it does not explain the drop completely. The under contract counts still look somewhat lower than we would expect. I believe we are seeing a slight weakening trend in demand at the low and mid-range, compensated by stronger demand at the high-end.

September 20 - The Cromford® Market Index table for the single-family markets in the 17 largest cities is shown below:

Here we see an average decline of 2.2% over the past month with 5 cities improving for sellers and 12 deteriorating.

Cave Creek and Tempe have shown the strongest improvement while Fountain Hills is in full scale retreat.

We cannot remember seeing Paradise Valley so high up this chart ever before. The luxury market has improved significantly over the past year with lower supply and much stronger sales numbers.

The recent weakness in the West Valley is reflected in this table with every city deteriorating for sellers

September 19 - The number of listings under contract is surprisingly low considering all the other readings on the market. We are some 9% below the count for this time last year and that was some 6% below 2016. The last time we saw a year-over-year increase for listings under contract was at the end of April.

While this situation persists it would be a mistake to think we are in a market with strong demand.

We are in a seller's market but that is not the same thing - the seller's current advantage is created by weak supply, not strong demand.

September 18 - It appears that Californians are back in force buying up Arizona homes, comprising 7.2% of all buyers in Maricopa County during August. However we need to remember that Opendoor counts as a Californian buyer and they represent about 33% of all sales to Californians at the moment. So we need to subtract their purchases before we can make a year over year comparison.

Having taken this extra step, we see that Californian buyers took a 5.1% market share during August, excluding Opendoor. In August 2017 the equivalent percentage was 4.2%. Thus there is a growing trend, but it is not quite as big as we might have assumed. California is almost always the largest source of out-of-state buyers and that is true more than ever in 2018.

Washington buyers have increased their share from 1.4% to 1.7% over the past year, but this includes Zillow, based in Washington. Subtracting their purchases brings us back to 1.6% which is still something, but again not quite as substantial as initial analysis suggests. Washington is in second place to California.

We don't have to make an allowance for OfferPad since they are based right here in Gilbert, Arizona.

Colorado is another strong state for our buyers but they have not increased their share (1.2%) since last year. Illinois has edged up from 0.9% to 1.0%.

All other US states increased from 7.2% to 7.7%. None of these individual states has as much impact as California, Washington, Colorado or Illinois, which are the biggest long term sources of out-of-state buyers.

Foreign buyers have become very scarce. Even Canadians who were buying as much as 6% in 2011 and rivalling California for impact on our market. Canadian buyers are down below 0.4% at the moment. This is not a new phenomenon. They were below 0.4% in August 2016 and August 2017 too.

September 17 - Reports from other parts of the country suggest the following trends:

  1. A significant reduction in demand from Chinese buyers.
  2. Continued strong demand for entry-level homes
  3. Declining demand for discretionary move-up and luxury homes

These trends do not appear to match what we are seeing in the Greater Phoenix area.

For one thing, we have never had much demand from Chinese buyers so even if their demand disappeared completely we would hardly notice. The Phoenix metropolitan area is the 12th largest in the USA, but it does not register in the conscious mind of the typical Chinese person. Before you think that is strange, let me ask you what you know about the 12th largest metropolitan area in China. The first question is what is it called? - Shenzhen being the correct answer. With a metro population of well over 23 million it is roughly 6 times the size of the Greater Phoenix area. I imagine few Arizona residents have ever thought much about it, never mind considered buying a home there. The same applies in reverse.

We are seeing much stronger growth in demand for luxury home this year than in 2017. Below we compare sales during the first 2 weeks of September:

  • Total sales (all types) - 2,864 in 2018, 2,556 in 2017 - up 12%
  • Under $250K - 1,310 in 2018, 1,357 in 2017 - down 3%
  • $250K to $400K - 1,033 in 2018, 814 in 2017 - up 27%
  • $400K to $800K - 427 in 2018, 317 in 2017 - up 34%
  • $800K and up - 94 in 2018, 68 in 2017 - up 38%

No evidence there of declining demand for move-up and luxury homes. Entry level sales are down a little but that could be due to the limited availability of homes to buy at that price level.

I would therefore caution you not to assume that anything going on in the wider housing market applies to Greater Phoenix.

September 14 - We are still examining the changes that took place in the single-family market between August 1 and September 1, but this time we will segment the market by price rather than location.

The first thing that strikes us is that supply increased for homes at or under $400,000, but decreased for homes over $400,000. It is a very long time since we have said anything like that, so something different seems to be going on.

  • active listings at or under $400,000 without a contract grew 9% from 6,610 to 7,187
  • active listings over $400,000 without a contract fell 0.3% from 5,304 to 5,288

The big drop in supply was for homes between $1.5M and $2M which fell by 11%. This has been a heavily over-supplied sector in the recent past.

  • monthly sale for homes at or under $400,000 fell 7% from 5,391 to 5,038
  • monthly sales for homes over $400,000 grew 2% from 1,505 to 1,536

This analysis confirms our observations on September 12. The low to mid-range market is seeing rising supply and falling sales while the higher mid-range and luxury market is doing the opposite. This is the reason why the West Valley, with a large share of the most affordable homes, was the weakest areas during August.

About 78% of single-family sales in Greater Phoenix are priced at or below $400,000, so if this market loses steam, it will not be fully compensated by strength at the higher end.

One month does not make a trend, but we should keep our eyes on the low-to-mid-range market over the next few months.

September 13 - Below we show the Cromford® Market Index for the single-family markets in the 17 largest cities:

Here we a gradually deteriorating market from a seller's perspective. The average change of the last month is only -2.3%, but the decline is widespread with 12 of the 17 cities showing some deterioration and only 5 improving for sellers.

Cave Creek is the stand-out with a gain of 9% while Glendale and Fountain Hills saw the largest declines.

Despite this, every city is still a seller's market and well above the balanced zone of 90-110.

September 12 - We saw yesterday that the largest changes for the single-family market between August 1 and September 1 took place in the West Valley. Today we will look at the individual ZIP codes within the West Valley.

Area Active Listings (excl. UCB/CCBS) Aug Active Listing (excl. UCB/CCBS) Sep Change Sales Jul Sales Aug Change Months of Supply Aug Months of Supply Sep Change
Glendale 85301 46 46 none 34 29 down 15% 1.6 2.1 up 30%
Glendale 83302 52 48 down 8% 34 40 up 18% 2.0 1.8 down 9%
Glendale 85303 37 35 down 5% 43 32 down 26% 1.1 1.7 up 57%
Glendale 85304 46 59 up 28% 42 37 down 12% 1.5 1.9 up 32%
Glendale 85305 26 25 down 4% 16 14 down 12% 2.1 2.5 up 18%
Glendale 85306 34 42 up 24% 38 26 down 26% 1.1 1.7 up 55%
Glendale 85307 24 21 down 12% 8 5 down 37% 3.4 5.0 up 48%
Glendale 85308 180 168 down 7% 110 98 down 11% 2.1 2.3 up 6%
Glendale 85310 74 77 up 4% 46 37 down 20% 1.9 2.8 up 14%
Avondale 85323 60 61 up 2% 64 45 down 30% 1.3 2.0 up 58%
Buckeye 85326 192 197 up 3% 173 145 down 16% 1.5 1.8 up 17%
El Mirage 85335 44 44 none 63 37 down 41% 0.9 1.6 up 70%
Goodyear 85338 223 241 up 8% 109 116 up 6% 2.4 2.4 down 1%
Laveen 85339 97 122 up 26% 78 77 down 1% 1.6 2.0 up 12%
Litchfield Park 85340 124 137 up 11% 62 55 down 12% 2.4 2.9 up 19%
Peoria 85345 76 82 up 8% 67 72 up 8% 1.5 1.5 none
Sun City 85351 47 66 up 40% 69 59 down 15% 1.1 1.4 up 31%
Tolleson 85353 79 69 down 13% 70 64 down 9% 1.4 1.3 down 1%
Tonopah 85354 8 7 down 12% 5 1 down 80% 1.6 8.0 up 400%
Waddell 85355 62 63 up 2% 24 32 up 33% 3.3 2.4 down 28%
Wittmann 85361 25 29 up 16% 13 9 down 31% 2.6 3.8 up 44%
Youngtown 85363 6 10 up 67% 13 11 down 15% 0.7 1.6 up 136%
Sun City 85373 68 61 down 10% 45 36 down 20% 1.9 2.2 up 18%
Surprise 85374 85 94 up 11% 86 86 none 1.4 1.5 up 10%
Sun City West 85375 83 97 up 17% 91 83 down 9% 1.4 1.6 up 16%
Surprise 85378 20 39 up 95% 16 8 down 50% 1.6 5.6 up 246%
Surprise 85379 168 192 up 14% 124 106 down 15% 1.7 2.2 up 29%
Peoria 85381 59 56 down 5% 39 25 down 36% 1.8 3.2 up 76%
Peoria 85382 92 110 up 20% 55 69 up 26% 2.2 2.0 down 11%
Peoria 85383 418 440 up 5% 172 139 down 19% 2.7 3.6 up 30%
Surprise 85387 90 100 up 11% 30 28 down 7% 1.5 1.9 up 14%
Surprise 85388 103 120 up 17% 72 76 up 6% 1.8 1.9 up 6%
Avondale 85392 79 80 up 1% 67 55 down 18% 1.5 1.9 up 28%
Goodyear 85395 131 148 up 13% 61 53 down 13% 2.6 3.3 up 26%
Buckeye 85396 167 170 up 2% 76 81 up 7% 2.5 2.4 down 3%

We see only 6 ZIP codes with lower months of supply than a month earlier. There is a general trend in favor of buyers when we see active listings up 7% in a month with 11% fewer sales despite the maximum number of working days (23). August is not expected to be a strong month, but the cooling is surprisingly strong in locations such as:

  • Glendale 85303, 85306 and 85307
  • Avondale 85323
  • El Mirage 85355
  • Tonopah 85354
  • Wittmann 85361
  • Youngtown 85363
  • Surprise 85378
  • Peoria 85381

We have become used to reporting strong markets at the low end and weaker ones at the top over the last 6 years. However there are distinct signs of a change going on. The top end is strengthening while the low to medium price ranges are cooling, albeit from a very strong situation. Supply is still weak (though improving) in the West Valley, so the market has a long way to go before it gets back to balance. However there are some signs of consolation for West Valley buyers in the above table.

If the entry-level market were very strong we would expect the West Valley to be the top performing area. Between August 1 and September 1, the opposite was the case.

September 11 - Here is how the major areas changed between August 1 and September 1

Area Active Listings (excl. UCB/CCBS) Aug Active Listing (excl. UCB/CCBS) Sep Change Sales Jul Sales Aug Change Months of Supply Aug Months of Supply Sep Change
Central Valley 2,810 2,892 up 2.9% 1,461 1,509 up 3.3% 2.4 2.3 down 1.0%
Northeast Valley 2,166 2,183 up 0.8% 632 612 down 3.2% 4.0 4.1 up 2.1%
Southeast Valley 2,578 2,696 up 4.6% 2,027 1,892 down 6.7% 1.7 1.9 up 9.6
West Valley 3,125 3,356 up 7.4% 2,119 1,888 down 10.9% 1.8 2.2 up 19.5

The numbers are for single-family detached homes only.

We see that the deterioration in the market for sellers was concentrated in the West Valley - adding more listings without contracts than any of the other 3 are and showing a bigger drop in monthly sales rate too.

The Central Valley saw an increase in sales with a higher percentage than the increase in supply. It was therefore the area with the best trends for seller. The Northeast valley saw very little increase in supply, but there was a 3.2% drop in the sale rate. It was therefore the second best region from a seller's perspective.

The Southeast valley started and ended with the tightest supply, but it did see a 4.6% increase in active listings coupled to a 6.7% drop in sales. These trends went in the buyer's favor but not as much as in the West Valley.

September 10 - If you feel like the luxury market has improved a lot during the past year you are not mistaken. Excessive supply between 2015 and 2017 was a drag on the market keeping prices weak and inhibiting sellers during negotiations. The supply has been trending lower over the past year but the biggest change has been a surge in demand.

For the annual period that ended on August 31, we saw $8.4 billion spent on homes over $500,000 in Greater Phoenix. This is a huge 24.7% increase over the prior 12 months and almost entirely due to a 24.2% increase in the number of homes sold. The average price of these homes only rose by 0.4%.

The largest percentage increases in high-end dollar volume are to be seen in:

  1. Phoenix 85006 - up 384% (12 sales over $500K)
  2. Scottsdale 85257 - up 157% (40 sales)
  3. Rio Verde - up 163% (76 sales)
  4. Phoenix 85022 - up 142% (48 sales)
  5. Buckeye 85396 - up 132% (31 sales)
  6. Waddell 85355 - up 129% (22 sales)
  7. Surprise 85387 - up 121% (26 sales)
  8. Phoenix 85003 - up 105% (64 sales)
  9. Phoenix 85042 - up 95% (31 sales)
  10. Chandler 85224 - up 94% (23 sales)
  11. New River 85087 - up 91% (18 sales)
  12. Phoenix 85032 - up 85% (29 sales)
  13. San Tan Valley 85140 - up 85% (22 sales)
  14. Surprise 85379 - up 77% (14 sales)
  15. Phoenix 85008 - up 66% (13 sales)
  16. Mesa 85213 - up 65% (82 sales)

We excluded locations with fewer than 10 sales in the last 12 months from this table.

Few of these are generally regarded as top luxury home locations. The fact is that a rising price wave is pushing homes into the over-$500K bracket all over the place. We have more ZIP codes joining the over-half-million club, with homes selling for more than $500,000 in the following relatively inexpensive locations

  • Phoenix 85009
  • Casa Grande 85122
  • Coolidge 85128
  • Maricopa 85138
  • Maricopa 85139
  • Casa Grande 85194
  • Mesa 85208
  • Glendale 85301
  • Glendale 85307
  • Peoria 85382
  • Avondale 85392

We also see strong rises in dollar volume in most of the traditional luxury areas:

  1. Fountain Hills 85268 - up 40%
  2. Scottsdale 85262 - up 24%
  3. Scottsdale 85255 - up 23%
  4. Paradise Valley - up 23%
  5. Phoenix 85018 - up 20%

There were a few exceptions, with Carefree 85377 down 1% and Scottsdale 85259 down 7%.

September 7 - Our regular examination of the Cromford® Market Index for the single-family markets in the 17 largest cities is shown below:

We see an average decline of 3% in the CMI, telling us that the market is not quite as favorable for sellers as it was a month ago. 6 cities have improved for sellers but 11 have deteriorated.

Glendale, Goodyear, Queen Creek, Maricopa, Mesa and Fountain Hills saw the largest declines while Cave Creek was the only city showing strong improvement.

Despite the general trend, every city is still a seller's market and it would take many months of this trend before buyers start to flex their negotiation power.

September 6 - We often get asked what percentage of the market has been captured by the iBuyers (Opendoor, OfferPad and Zillow). The answer is not too hard to calculate but it does depend on what you define as "the market". The simplest calculation is to take all sales of single-family or condo/townhouses within Maricopa and Pinal County. However this includes new home sales which are not part of the market where iBuyers operate. Trustee sales, bank owned sales, GSE REO sales and HUD sales should probably be excluded from the market too, even though it is possible for an iBuyer to acquire a home through these channels.

Here is a table showing market share over the past 24 months, using the 2 different definitions of "the market":

Month OfferPad Purchases Opendoor Purchases Zillow Purchases Total iBuyer Purchases % All Sales % Sub market
Aug 2016 23 147   170 1.65% 2.00%
Sep 2016 39 139   178 1.82% 2.26%
Oct 2016 38 155   193 2.10% 2.54%
Nov 2016 45 191   236 2.59% 3.24%
Dec 2016 37 112   149 1.54% 1.98%
Jan 2017 34 60   94 1.17% 1.41%
Feb 2017 63 65   128 1.50% 1.84%
Mar 2017 57 60   117 0.97% 1.17%
Apr 2017 60 82   142 1.28% 1.53%
May 2017 58 131   189 1.51% 1.78%
Jun 2017 98 182   280 2.25% 2.67%
Jul 2017 84 160   244 2.39% 2.86%
Aug 2017 119 149   268 2.44% 2.96%
Sep 2017 117 161   278 2.79% 3.45%
Oct 2017 120 209   329 3.35% 4.09%
Nov 2017 99 236   335 3.46% 4.28%
Dec 2017 84 217   301 3.09% 3.88%
Jan 2018 67 229   296 3.52% 4.26%
Feb 2018 76 245   321 3.45% 4.14%
Mar 2018 78 265   343 2.73% 3.27%
Apr 2018 81 274   355 3.00% 3.52%
May 2018 125 282 3 410 3.15% 3.75%
Jun 2018 115 298 16 429 3.51% 4.18%
Jul 2018 98 294 31 423 3.77% 4.53%
Aug 2018 109 280 44 433 3.86% 4.63%

The August 2018 numbers are based on preliminary unverified data.

In rough terms, the iBuyers are now handling almost 1 in 20 of the available sellers in the Greater Phoenix market.

September 5 - Now let us take a look at average price per sq. ft. for new homes year-to-date:

  1. The New Home Company - $701
  2. Optima - $701
  3. Green Street - $296
  4. Statesman - $260
  5. Toll Brothers - $242
  6. Porchlight - $236
  7. Cachet - $232
  8. Highland - $232
  9. Robson - $208
  10. David Weekley - $205
  11. Shea - $200
  12. K Hovnanian - $194
  13. Blandford - $191
  14. VIP - $186
  15. Farnsworth - $184
  16. Taylor Morrison - $168
  17. Maracay - $168
  18. Mattamy - $161
  19. Towne - $157
  20. Bellago - $157
  21. Lennar - $156
  22. Woodside - $154
  23. Fulton - $152
  24. Richmond American - $148
  25. Pulte - $147
  26. William Ryan - $145
  27. Cresleigh - $145
  28. Ashton Woods - $139
  29. Elliott - $139
  30. Gehan - $138
  31. Meritage - $138
  32. William Lyon - $134
  33. KB - $132
  34. Beazer - $132
  35. Providence - $132
  36. Garrett Walker - $131
  37. Courtland - $130
  38. LGI - $124
  39. Pinnacle West - $121
  40. D R Horton - $120

It must be emphasized that land cost is an important part of the price of a new home. D R Horton achieves the lowest cost by focusing most of its development where land prices are lowest. Of the 1,332 closed sales year-to-date, 63% of them were in Buckeye, Maricopa or San Tan Valley.

September 4 - Here are the median sales prices for new homes in Maricopa and Pinal counties, sold between January and July 2018.

Developer Median Sales Price
The New Home Company $2,298,999
Toll Brothers $814,028
Optima $689,491
Porchlight $644,606
David Weekley $606,749
VIP $566,346
Green Street $552,164
Maracay $458,906
Cachet $434,499
Blandford $426,932
Mattamy $419,997
Highland $411,949
Shea $400,183
Robson $396,463
Taylor Morrison $391,055
Woodside $378,000
K Hovnanian $365,000
Cresleigh $362,066
William Ryan $356,934
Statesman $350,000
Gehan $340,765
Ashton Woods $340,698
Fulton $336,681
Farnsworth $330,031
Pulte $326,698
Lennar $316,190
William Lyon $310,093
Richmond American $309,715
Elliott $296,794
Meritage $288,008
Towne $284,353
Bellago $283,347
Beazer $281,480
KB $270,771
Pinnacle West $263,595
Courtland $263,129
Garrett Walker $259,923
Providence $230,495
D R Horton $220,000
LGI $212,900

There are many other entities but volumes for these were too small to calculate a reasonable median sales price.

Once again we can see how D R Horton and LGI are very targeted at the entry level homes where there is such a shortage of re-sale supply.

September 3 - Following up our post of August 31, here the top 25 developers in Maricopa and Pinal counties by YTD sales revenue recorded by the end of July:

  1. Lennar - $405M
  2. Taylor Morrison - $337M
  3. D R Horton - $306M
  4. Pulte - $251M
  5. Meritage - $203M
  6. Shea - $193M
  7. Mattamy - $164M
  8. Toll Brothers - $148M
  9. Fulton - $133M
  10. KB - $129M
  11. Ashton Woods - $122M
  12. Optima - $117M
  13. Robson - $109M
  14. Richmond American - $109M
  15. K Hovnanian - $104M
  16. Maracay - $103M
  17. William Lyon - $83M
  18. Blandford - $77M
  19. Beazer - $68M
  20. Woodside - $63M
  21. Garrett Walker - $60M
  22. LGI - $48M
  23. David Weekley - $47M
  24. Courtland - $40M
  25. Gehan - $40M

We note that Toll Brothers moves up from 19 by units to 8th by revenue due to their exclusive focus on higher-end homes.

In contrast D R Horton and KB drop down compared the unit table due to heavy focus on entry-level housing.

August 2018

August 31 - After 7 months of recordings between Jan 1 and July 31, here is the top 25 ranking by closed units for local developers:

  1. D R Horton - 1,332 closed homes
  2. Lennar - 1,137
  3. Taylor Morrison - 801
  4. Pulte - 715
  5. Meritage - 620
  6. KB - 469
  7. Shea - 420
  8. Mattamy - 397
  9. Fulton - 380
  10. Ashton Woods - 328
  11. Richmond American - 292
  12. William Lyon - 263
  13. K Hovnanian - 262
  14. Robson - 255
  15. Beazer - 237
  16. Garrett Walker - 228
  17. Maracay - 219
  18. LGI - 217
  19. Toll Brothers -170
  20. Woodside - 161
  21. Blandford - 159
  22. Courtland - 142
  23. Optima - 140
  24. Gehan - 114
  25. Pinnacle West - 96

The numbers are for Maricopa and Pinal counties only.

August 30 - Another look at the Cromford® Market Index table for the largest 17 cities (single-family only):

Here we see 11 cities deteriorating for sellers and 6 improving. The overall average is a decline of 2%. This week Cave Creek is the top advancing city with +7%. Glendale is going backwards fastest with -10%. Phoenix continues to drop slowly down the table.

Some of the smaller cities are looking more positive with some outstanding values for the CMI:

  • Arizona City - 385.7
  • El Mirage - 300.9
  • Sun Lakes - 259.1
  • Gold Canyon - 236.7
  • Tolleson - 216.2
  • Apache Junction - 204.2

If you want a high CMI these days its good to be in Pinal County or an inexpensive spot in the West Valley.

August 29 - The S&P / Case-Shiller® Home Price Index® number are now out for the sales during April through June. Comparing with last month, here is how the 20 featured metropolitan areas fared:

  1. Las Vegas +1.39%
  2. Detroit +1.04%
  3. Minneapolis +1.04%
  4. Cleveland +0.99%
  5. Boston +0.85%
  6. Chicago +0.77%
  7. Phoenix +0.74%
  8. Seattle 0.73%
  9. Portland +0.70%
  10. Miami +0.66%
  11. Atlanta +0.65%
  12. San Diego +0.60%
  13. Tampa +0.60%
  14. Denver +0.60%
  15. Charlotte +0.55%
  16. Washington +0.55%
  17. Los Angeles +0.53%
  18. San Francisco +0.47%
  19. Dallas +0.39%
  20. New York -0.07%

Phoenix slipped very slightly from 6th place last month to 7th this month and came in just below the national average of +0.77%.

On a year over year basis the ranking table looks like this:

  1. Las Vegas +13.0%
  2. Seattle +12.8%
  3. San Francisco +10.7%
  4. Denver +8.3%
  5. Los Angeles +7.4%
  6. Phoenix +7.2%
  7. Boston +7.1%
  8. San Diego +6.9%
  9. Tampa +6.9%
  10. Minneapolis +6.5%
  11. Detroit +6.4%
  12. Portland +5.8%
  13. Charlotte +5.7%
  14. Atlanta +5.7%
  15. Dallas +5.2%
  16. Miami +5.2%
  17. Cleveland +5.1%
  18. New York +3.8%
  19. Chicago +3.3%
  20. Washington +2.9%

Phoenix ranked 6th in this table, up from 7th last month and well above the national average of +6.2%.

August 28 - For the largest 17 cities you can see 2 years of comparative appreciation rates using the chart here.

We see that appreciation rates have tended to converge over the past 2 years, currently ranging from a low of 4.4% for Scottsdale to a high of 10.9% for Maricopa. Two years ago the range was much wider from a low of -4.8% for Paradise Valley to a high of 11.0% for Maricopa. Maricopa has not been on top for the whole period. Avondale was in the lead between April 2017 and May 2018.

The current ranking is:

  1. Maricopa 10.9%
  2. Avondale 8.2%
  3. Queen Creek 8.1%
  4. Mesa 8.0%
  5. Buckeye 7.9%
  6. Surprise 7.9%
  7. Glendale 7.7%
  8. Cave Creek 7.6%
  9. Phoenix 7.5%
  10. Paradise Valley 7.1%
  11. Gilbert 7.0%
  12. Chandler 6.8%
  13. Peoria 6.7%
  14. Tempe 6.5%
  15. Fountain Hills 5.5%
  16. Goodyear 4.7%
  17. Scottsdale 4.4%

All these numbers are for single-family detached homes only.

August 27 - The supply of active listings in 2018 (excluding those under contract) has followed a different trend depending on the dwelling type:

  • single-family - has fallen from a peak 13,498 on January 21 to 12,392 on August 24, a drop of 8.2%
  • condo / townhouse - has fallen from a peak of 2,561 on January 21 to 1,936 on August 24, a drop of 24.4%
  • mobile / manufactured - has fallen from a peak of 684 on January 13 to 431 on August 24, a drop of 37.0%

So single-family homes have retained a much higher percentage of their supply than condos or mobile homes.

The supply has also behaved differently by county:

  • Maricopa County - has fallen from a peak of 14,783 on January 20 to 13,254 on August 24, a drop of 10.3%
  • Pinal County - has fallen from a peak of 1,917 on February 10 to 1,429 on August 24, a drop of 25.5%

So Pinal County has seen far more of its supply disappear than Maricopa County has.

These effects are all due to average price points.

  • Pinal County is on average cheaper than Maricopa County
  • condo / townhouse properties are on average cheaper than single family homes
  • mobile / manufactured homes are on average cheaper than condo / townhouse properties

Although condo / townhouse properties are cheaper on average than single-family homes, this is purely because they are much smaller on average. The average price per sq. ft. for condo / townhouse properties is currently around $170, noticeably higher than the average price of single-family properties at around $160.

Whatever way you look at the market, inexpensive homes have become much harder to find over the last 7 months.

August 24 - The Cromford® Market Index for the single-family markets in the 17 largest cities:

Another table that suggests the market is slowly and slightly cooling down. The average change over the last month is -2% and we see 11 cities deteriorating for sellers with 6 improving. The general trend is an uptick in supply despite low numbers of new listings, coupled with continued weakness in homes going under contract compared with normal.

The Northeast Valley, represented by Paradise Valley (+9%), Scottsdale (+7%) and Cave Creek (+6%), is having the best of things, but Avondale, Buckeye and Chandler all managed a 3% gain.

The strongest declines are seen in Tempe (-10%), Glendale (-8%), Fountain Hills (-8%) and Gilbert (-7%).

Avondale has consolidated its position at the head of the table. Peoria and Tempe are a little way adrift at the bottom, but even these 2 cities remain in a seller's market over 110.

August 23 - The Census Bureau reported a total of 5,937 multi-family permits across Maricopa & Pinal counties for July 2018 year-to-date. This is the highest YTD number for July since 2007.

Phoenix and Tempe completely dominate the YTD numbers in 2018 with 2,118 and 2,021 respectively. Formerly very active, Scottsdale has faded into a distant third place with 505, while Chandler (387), Gilbert (205), Peoria (183) and Mesa (155) are the principal also-rans.

August 22 - The single-family permits for Maricopa & Pinal counties during July totalled 2,138 which is a 16% increase over July 2017. The annual run rate has increased to 22,079 which is the highest we have seen since February 2008. However it is still a lot lower than between 1997 and 2007 when it was consistently over 28,000 and usually over 33,000.

Many developers are trying harder to meet the demand for more affordable homes, which is probably why Unincorporated Pinal County is the number one source of permits this July with 300. The vast majority of these are located in the loosely defined area we know as San Tan Valley. The inexpensive areas of Buckeye and Maricopa also appear among the top 6 locations with 211 and 204 permits respectively. The top 6 are rounded out by Phoenix (250), Mesa (222) and Queen Creek (167).

Overall, the numbers suggest a mood of optimism among the developers, though moderated by caution based on their unhappy experience of 2007-2009.

August 21 - In the first 3 weeks of August we have seen fewer new listings appear than during the same 3 weeks last year. We currently count 6,147 which is 3.4% less than the 6,361 for last year. This gap seems to be widening because we saw a 1.4% drop after 2 weeks and a 0.3% increase after the first week.

The gap is visible for all dwelling types but is largest for mobile homes. We have seen only 111 versus 133 new mobile home listings which is a drop of over 16%.

The gap is also larger for Pinal County at 4.8% versus Maricopa County (3.2%).

August 20 - In most years the active listing count (excluding UCB and CCBS listings) hits a low point in August and then starts to rise until Thanksgiving. In 2018 we hit the low point slightly early in July and have already been drifting upwards for 4 weeks now. This might be considered a negative sign for sellers, but the change is so slight I would not want to make too big a deal out of it.

There are some areas that have seen a dramatic rise, often from abnormally low levels. Florence is probably the best example. At the end of June we had just 100 active listings without a contract, but since then the count has shot up 38%. The trend does not affect mobile homes, but single-family listings have jumped from 71 to 111, an increase of 56% in just 8 weeks. A similar but smaller event has occurred in Casa Grande and Coolidge. The only areas outside of Pinal County with a jump like this (albeit more moderate) are Litchfield Park and Surprise.

August 17 - We have examined the new listings for Greater Phoenix that arrived in the first 2 weeks of August. Overall we saw 4,079, down from 4,208 in the same period last year. The interesting stuff comes when we look at individual price ranges:

Price Range New Listings 2017 New Listing 2018 Change Sales Rate Change in Annual Sales Rate
Up to $150K 408 275 down 33% 8,697 down 20%
$150K to $200K 789 542 down 31% 17,257 down 13%
$200K to $250K 871 843 down 3% 20,496 up 6%
$250K to $300K 638 706 up 11% 15,044 up 10%
$300K to $400K 688 803 up 17% 16,376 up 12%
$400K to $500K 334 379 up 13% 7,639 up 14%
$500K to $1M 371 441 up 19% 7,711 up 14%
Over $1M 109 90 down 17% 1,882 up 19%

We see that the market under $200K is contracting fast with both new listings and sales falling. However the new listing arrival rate is falling faster than the sales rate.

From £200K to $250K we have sales up and new listings down, a market improving for sellers. From $250K to $1M the supply is growing at a similar rate to sales, with a couple of ranges getting a larger increase in supply than sales ($300K to $400K and $500K to $1M).

Over $1M the situation is vastly improved for sellers because supply has fallen while sales rate up by the largest percentage of any price range.

August 16 - Once again we show the Cromford® Market Index table for the single-family markets in the 17 largest cities:

Only 5 cities improved for sellers over the past month, 3 of them in the Northeast Valley. Once again Paradise Valley and Scottsdale were the biggest gainers.

Avondale has regained its place at the head of the table despite losing 1%. The Southeast Valley has lost the dominance it held in the early part of the year, with Tempe (down 14%) and Gilbert (down 8%) the biggest decliners. Only Mesa remains above 200 although it went backwards by 2%. Chandler managed a 1% advance.

All 17 cities remain seller's markets, but 12 out of the 17 weakened for sellers.

August 15 - The total number of active listings (including those in UCB or CCBS status) is 19,736 today for all areas & types across the ARMLS database. This is just slightly above June 15, 2011 when we saw 19,696. We have to go all the way back to October 2005 to find another 15th date (19,715) with lower active listings.

Active listing counts have been on a declining trend since April 2014 when we hit a short term peak of 30, 506. We would consider somewhere between 30,000 and 35,000 to be sufficient for a balanced market. The all-time record high for a 15th date is 58,195 in November 2007.

Even if we are hearing about signs of a fall in demand, mainly at a national level and in regions outside Arizona, supply is so low at the moment, demand would have to drop a lot more for us to reach a balanced (and smaller) market.

August 14 - Inspired by a question from Tracy Royce, we have created a new Tableau chart in Cromford® Public which allows you to examine the intended use stated on the Affidavits of Value by buyers in Maricopa and Pinal counties.

For the second quarter of 2018, the following breakdown is observed for Greater Phoenix as a whole:

  1. Owner Occupier (Primary Residence) - 74.0%
  2. Investor - 10.9%
  3. Second Home - 10.7%
  4. iBuyer - 3.2%
  5. Unknown - 1.2% (mostly trustee sales)

Since iBuyers are acting as intermediaries and create one extra transactions than we would have seen without them, we concluded that the overall sales count is 3.2% higher than it would have been normally. Their share in 2Q 2017 was 1.7%, in 2Q 2016 was 1.3% and in 2Q 2015 was 0.2%.

We can see that iBuyers are not involved with home sales over $500,000 nor with the new home market. Excluding those sales from the total, they currently have a 4% market share, up from 2.1% a year ago.

If we focus on the 55+ communities (both legally restricted and targeted by marketing), then we see a very different picture:

  1. Owner Occupier - 64.0%
  2. Second Home - 28.0%
  3. Investor - 6.3%
  4. Unknown - 1.0%
  5. iBuyer - 0.7%

Since the iBuyer buying process is fairly passive, we conclude that the owners of 55+ properties are far less attracted to the iBuyer web sites than the average seller. We also see that investors show far less interest in 55+ homes than average. However 55+ properties are very popular as second homes.

Investors are far more active purchasing condos (16.6%) than single-family homes (9.8%)

iBuyers have tended to prefer the opposite with a 2.5% share in condo purchases and a 3.3% share in single-family purchases.

Top cities for the percentage of purchases by iBuyers in 2Q 2018 were:

  1. Waddell - 10.6%
  2. Tolleson - 9.5%
  3. Anthem - 9.1%
  4. Laveen - 8.0%
  5. San Tan Valley - 6.1%
  6. Glendale - 5.2%
  7. Avondale - 4.9%
  8. Surprise - 4.9%
  9. Arizona City - 4.8%
  10. Buckeye - 4.8%

August 13 - Sometimes it can be revealing to examine a market by breaking it into just a few large geographic areas. Below is a table of some key statistics for single-family homes comparing August 2018 with August 2017.

Area Annual Change in Annual Sales Rate Annual Change in Active Listings (excluding UCB/CCBS) Annual Change in Days of Inventory
Central & North Valley +2.4% -1.5% -5.3%
Northeast Valley +6.3% -16.3% -19.7%
Pinal County +4.2% -16.5% -19.8%
Southeast Valley -0.1% -16.3% -16.3%
West Valley +2.3% -9.4% -12.3%

For sellers, every area has seen an improvement, but the Central & North Valley has seen by far the lowest percentage reduction in days of inventory. This is primarily due to a very small drop (-1.5%) in active listings compared to the rest of the valley.

The Northeast Valley and Pinal County have both seen a big improvement for sellers with an almost 20% drop in days of inventory. Both had a large 16% decline in active listings without a contract while they both saw strong increases in annual sales, with the Northeast the strongest of all.

The Southeast Valley saw a similar fall in active listings to Pinal County and the Northeast, but the annual sales rate has not managed any growth. It therefore lags behind the other two areas in positive movement for sellers.

The West Valley managed a similar increase in the annual sales rate to the Central Valley but saw a more significant drop in active listings.

Ranking the areas by improvement for seller's prospects we have:

  1. Pinal County
  2. Northeast Valley
  3. Southeast Valley
  4. West Valley
  5. Central & North Valley

It is surprising how different the areas are to one another and also how much the Northeast Valley has improved for sellers over the past 12 months.

August 10 - We have an unusually low number of listings under contract at the moment. Looking at the weekly chart for all areas & types we can see that in the last 10 years only 2008 and 2014 had lower counts at this point of the year. This is particularly unusual given that sales volume remains strong.

Certain cities have a significant shortfall of single-family contracts compared with last year:

  1. Fountain Hills - down 41%
  2. El Mirage - down 26%
  3. Avondale - down 24%
  4. Litchfield Park - down 21%
  5. Surprise - down 19%
  6. Sun City - down 18%
  7. Tempe - down 17%
  8. Glendale - down 16%
  9. Chandler - down 15%
  10. Casa Grande - down 15%

Fountain Hills had a large number of listings under contract in April, as many as 109, its highest count since 2012, but has slumped to just 41 as of this week.

Since the sales rates are holding up, you could argue that listings are closing more quickly or are being entered into ARMLS only after closing. This is certainly true of some listings, but since a drop in listings under contract is usually the first sign of a fall in demand, we are watching this situation closely. We suggest that you do too. As yet we are drawing no conclusions but we are wondering if the sales rate will follow suit over the next few months.

August 9 - The table below shows the Cromford® Market Index values for the single-family markets in the 17 largest cities by dollar sales volume.

We again see a big divergence between the Northeast Valley and the rest of the market.

The Northeast Valley continues to improve for sellers with a 26% increase in the CMI for Paradise Valley over the last month and a 10% rise for Scottsdale. Cave Creek has also gained a healthy 5% but Fountain Hills has started to fade after a very strong run over the past 3 months.

The rest of the market is looking a little bit tired. All cities are still seller's markets, but every city outside the Northeast (except Buckeye and Goodyear) showed at least a slight move in favor of buyers over the last month. Much of the change is due to weaker numbers of listings under contract. Tempe has also gained supply faster than normally expected for the season. Tempe, Gilbert and Avondale were the biggest losers. The change was modest for Mesa, Chandler, Surprise, Glendale, Phoenix and Queen Creek.

Supply remains very low, but has started to show early rises between $200,000 and $400,000.

It is unusual that Mesa should be top of the table while its close neighbor Tempe has hit the bottom. We are living in interesting times.

August 8 - Zillow has now purchased 62 homes and sold 10. All are in Maricopa County and none in Pinal.

The average purchase price of the 10 homes that have been sold was $309,700, which is just 0.4% below their average Zestimate of $311,036. The average sale price was $319,080, 2.3% higher than Zestimate. This means the average gross margin was 2.9%.

It took an average of 15 days to list the homes purchased, a further 23 days to get a contract and 20 days to close. These are lower numbers than the existing iBuyers (Opendoor and OfferPad), but remember we are only measuring the homes that sold, which by definition are the ones that sold quickly. There are plenty of homes that will take longer but are not closed yet.

Indeed, the first home purchased by Zillow is still active and has had no offers after 71 days and numerous Open House events. It has had 2 price reductions and is now on offer for $415,000 (having been purchased for $410,000). Zillow is offering an additional $2,500 commission to the buyer's broker on top of the 3% already offered.

There are now 10 listings in UCB status (the other iBuyers always use Pending status). There are 24 Active with no contracts and 18 not listed yet.

Zillow has announced a huge reduction in its targets for home sales in 2018. Forecast revenue is now down from $255 million to $40 million. They stated to investors that home closings are taking longer than anticipated.

August 7 - Between 2014 and 2016 we saw a strong upward trend in the supply of luxury homes, particularly in the Northeast Valley. That trend came to a halt in 2017 and we are now seeing a downward move. On August 1, 2018 we counted 2,365 single-family active listings (including UCB and CCBS) across the Northeast Valley and priced over $500,000. This is the lowest start-of-month count since September 2015 and is down 11% from a month ago and 8% lower than this time last year. The downward trend has gained momentum in the last 8 weeks.

Luxury buyers may have become used to having plenty of supply to choose from, and certainly supply is abundant compared with the market below $500,000. However supply is dropping faster than for several years and as a consequence sellers are gaining significant negotiation advantage. This is reflected in the rise in the Cromford® Market Index numbers for Scottsdale, Paradise Valley and Fountain Hills.

We normally see an increase in active listings from September through November but this is unlikely to change the narrative. Buyers of luxury homes have had their best times (the spring of 2016 was the peak) and their search is likely to become trickier over the next few months.

August 6 - The daily chart showing Average Annual Appreciation based on Monthly Average $/SF has been unusually stable for the last 6 months. The appreciation rate (by this measure) has stayed very close to 8% with only slight dips to 7% and occasional surges towards 10%.

If home prices are rising by 8% a year, then they are getting much less affordable. Average incomes are rising by something like a quarter of this rate. Rents are also rising at a steep rate (see charts below). The cost of shelter is rising as a percentage of income.

The effect is to make existing home owners feel more wealthy since their equity is growing fast. However, the incentive for people to move up and the enthusiasm of first-time buyers is in gradual decline. We have a low Cromford® Supply Index because remarkably few people wish to sell their house. We also have a declining Cromford® Demand Index because fewer people are trying to buy. At the moment demand remains much higher than supply across most sectors, so it feels like we have strong demand. Do not be fooled. The CSI stands at 59.1, the lowest level since 2015, but the CDI is at 96.5, the lowest level since March 2015. This is a key reason why we do not have bubble conditions (in which demand rises artificially due to speculation).

August 2 - The table showing the Cromford® Market Index values for the single-family markets in the largest 17 cities appears below.


There is a surprising amount of movement here. First we should point out that every one of the 17 cities is a seller's market. However only 7 of the 17 saw improvement for sellers over the past month and 10 saw deterioration.


Once again the biggest moves upward came from the Northeast with Paradise Valley up a staggering 32% and Scottsdale up 11%.

The biggest decliners were Tempe down 17% and Avondale down 12%.

Mesa remains on top for the second week, even though it took a 1% hit over the month.


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