Arizona's Market Mosaic: Navigating the Nuances of Real Estate Dynamics
The proportion of the list price that sellers secure at the sale has increased from 96.61% last year to 97.58% today, signaling an uptick in market optimism compared to the previous year. The Cromford® Market Index (CMI)* currently sits at 117.5, a slight dip from last year's 120.8, with little indication of strong momentum in any direction, contrasting with the steady climb observed last year.
The current data offers ambiguous and faint signals. While there's an uptick in both demand and supply, this balance has only led to a marginal increase in sales volume, so slight that it's barely noticeable once seasonal adjustments are factored in.
Comparatively, the growth in listings under contract by February 11 has decreased slightly from 60.6% last year to 59.9% this year, beginning from a reduced baseline.
In essence, the market doesn't provide much cause for excitement, whether one is anticipating positive shifts or bracing for a downturn. Neither scenario seems likely at the moment, leaving stakeholders in a state of anticipation without clear direction.
Arizona's real estate market, historically known for its dramatic fluctuations, is currently experiencing a period of stagnation. Market dynamics are diversifying, with certain areas seeing a slowdown, while others are becoming more favorable for sellers. This month, 13 cities have reported an increase in their Cromford® Market Index, though four cities have seen declines, and several others are beginning to show signs of weakening. Notably, Scottsdale and Surprise have seen reductions alongside Fountain Hills and Goodyear. The past week also saw declines in Buckeye, Maricopa, and Paradise Valley.
The 17 cities analyzed have experienced an average increase of 8.1% in their Cromford® Market Index, a decrease from the 10.5% reported last week. Despite the overall positive month-over-month change, the slowing trend is not the development sellers hope for at this time of year. Inventory is expanding in both the highest-priced and most affordable areas, far from Central Phoenix. For the first time since 2020, Paradise Valley has over 200 active listings without contracts, and Cave Creek is witnessing a growth in inventory after a concerning drop.
However, mid-range areas relatively close to the valley's core, including Glendale, Tempe, Chandler, Gilbert, Peoria, and Phoenix itself, have performed well over the past month. These markets show a healthy balance of supply and demand, despite low transaction volumes.
Currently, 10 of the 17 cities are considered seller's markets, with four cities having balanced markets and three classified as buyer's markets, illustrating the mixed and evolving nature of the regional real estate landscape.
*Cromford Market Index™ (CMI) is a value that provides a short term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market.