๐ง๐ต๐ฒ ๐ ๐ฎ๐ฟ๐ธ๐ฒ๐ ๐ฏ๐ ๐๐ต๐ฒ ๐ก๐๐บ๐ฏ๐ฒ๐ฟ๐
Now that the peak home buying season is upon us โ we have a little more data on how the market is performing. No pearl clutching headlines here, but still, we find it interesting (accusations of being a geek might be valid) and hope you will as well.
๐ฆ๐๐ฝ๐ฝ๐น๐ โ Supply is up 14% over last year but still 31% below normal according to the Cromford Report. Compare the following numbers just for contrast. We have as of the writing of this report โ 16,886 active listings vs. 4400 just 2 years ago. Wow. Below normal looks pretty normal by comparison. As usual though, the numbers need further examination. It is the top end of the market is where the supply is plentiful. Homes over 10 million currently have a2.6 year supply. Between 5-10 million โ 16 months supply. Between 3-5 million, 8 months of supply. Like price, location also determines supply. Outlying areas have more supply such as Buckeye, Maricopa and Casa Grande. Butthat shifts the closer homes are to the city center as the Cromford Report explains:โ โฆ many cities that are closer to Phoenix and are dominated by homes under $1 million still have a tight supply and buyers outnumber sellers in most of these areas.โ The moral: marketplaces are really a combination of micro markets that must be independently evaluated.
๐๐ฒ๐บ๐ฎ๐ป๐ฑ – Not shockingly, higher interest rates are keeping buyer demand below normal levels. Depending on oneโs view โ this is not entirely bad news. Why? Price. With supply and demand somewhat in abeyance, pricing is fairlystable. As the Cromford Report shares:
โโฆThose who have been keeping these updates over the past year have probably noticed that the median sales price has barely moved for 10 months. Starting at $440,000 from June-July 2023, stagnating at $435,000 from September-December, dropping to $430,000 from January-February 2024, and now back up to $441,000 in March. While the current appreciation rate from last March measures +5.8%, over the next 2 months this will start to move closer to 3%, which is in line with the rate of inflation. This 10-month stagnation in price, which has endured erratic mortgage rates ranging from 7-8%, has allowed some breathing room for annual incomes to catch up to pricesโ
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โThere is still no sign of a market crash in the short or medium term, but the market is struggling to gain traction. The healthy amount of incoming supply is not quite matched by a small improvement in demand and the balance between sellers and buyers only favors sellers by a small amount when considering the market as a whole. In many sectors of the market, buyers have more negotiating room, even though, judging by the recent price movements, most of them do not seem to realize this..โ
If the last few years have taught us nothing else โ markets can shift sometimes unexpectedly. As always, we will keep you informed when we see it.
Russell & Wendy Shaw
(Mostly Wendy)