February 25 - It is time to examine the Cromford® Market Index for the single family market in the 17 largest cities.
This is the worst looking table for sellers that we have seen in a long time, with only one city (Queen Creek) showing an improvement, and that a very small one. The problem for sellers is that too many other sellers are joining them and competition among these sellers is therefore rising. Sellers tend to focus on tracking potential buyers, because those are the people they meet and they often forget to keep an eye on their competition down the street. However, buyers are checking out everything that is available in their chosen price range and location and they tend to know when their choices are growing wider. It is not always the case, but buyers are often more aware of market conditions than sellers.
Overall supply is still well below normal below $250,000 but there is now plenty of supply over this price and something of an excess in several of the luxury home areas over $500,000. Scottsdale, Cave Creek, Fountain Hills and Paradise Valley are all now below the balanced 100 mark and although they have not fallen below 90 into what we would classify as a true buyer's market, some buyers will no doubt use any advantage they can get.
The good news is that the downward trend is likely to slow down over the next few weeks. Normally the flow of new listings starts to ease off in March and we do not expect this year to be any different. Indeed there has already been some improvement in the CMI over the last week in a few cities:
Other smaller cities showing some slight improvement for sellers include El Mirage, Gold Canyon and Sun City West.
Overall I would say the Northeast Valley remains relatively weak, while the West Valley is gaining some strength at the expense of the Southeast Valley, which started the year strongly. Phoenix is still looking fairly good for sellers and is one of the areas I expect to see turn round its cooling trend sometime in the next 4 weeks.