I always feel compelled to say is that while there are definitely overall market trends we can point to, the real (estate) story is in the specific area and price range (market segment) of your client. As you know, those can vary significantly, and even buck the general trend. A good exercise would be to read Mike Orrs expert market snapshots below, from Thanksgiving to date, and then go to our STATS page and play around with the Tableau Charts, now covering 10 different real time market measures you can drill down to your areas of interest. After all the turkey and black Friday ++ - youll be back in the game! December 1 - At the start of December the Cromford® Demand Index is at its lowest level since June 2008 while the Cromford® Supply Index is the highest it has been since August 2011. It should therefore be no surprise that several other market indicators are looking weak relative to the last 4 years. The sales counts for November are very low, as expected given there were only 18 working days in the month. The total monthly sales for areas & types will be the lowest since January 2009. The annual sales rate is down to around 86,000, the lowest since September 2009. The market is tepid, but not cold. The contract ratio is 36.3, around normal but the lowest we have seen for the start of any month since April 2009. To put it into perspective, the lowest we have seen since 2001 is 6.6 in January 2008. Between December 2005 and April 2009 the contract ratio was continuously below todays reading. Tepid feels strange after so many years of a hot, frantic market, but it is really just normal. November 30 - Earlier this year there were many ominous warnings in the media that institutional investors in single family homes would start to dump them on the market creating a glut of supply. So far exactly the opposite is taking place. Hardly any of the 13,500 or so single family homes owned by institutional investors are coming onto the market. We have seen just 17 sales over the last 4 months. If these 13,500 homes were owned by average homeowners we would see about 7.5% sold every 12 months, so over 4 months we would have seen about 340 sales instead of 17. We conclude that at the moment institutional investor owned homes are being sold at only 5% of the normal average rate. We will keep watching for any significant change in this situation. November 29 - Turning our attention to the secondary cities, the Cromford® Market Index for the single family markets look like this: Anthem is improving from 91.3 to 93.3 over the last week - 92.8 four weeks. Demand is now recovering and supply is increasing only slowly. Tolleson is gaining strength now - up from 85.8 to 87.0 - 85.9 four weeks ago. Supply is stable and demand is slowly recovering. Litchfield Park is showing good signs of improvement, up from 91.2 to 92.8 over the last week - 91.9 four weeks ago. Supply is still growing but demand is recovering faster. Fountain Hills is starting to turn around after a very week October, up from 77.3 to 77.9 - 86.6 four weeks ago. Supply is still growing but demand is picking up steam too. Sun City West is still in the strongest position, though down from 143.1 to 141.2 over the last week - 162.1 four weeks ago. Demand is now growing, but so is the supply. Maricopa is still deteriorating, albeit very slowly - down from 50.5 to 50.3 over the last week - 56.0 four weeks ago. Demand has stabilized but supply is still growing. Apache Junction looks like it is stabilizing - down from 96.2 to 95.7 over the last week - 112.2 four weeks ago. Demand is growing but do is supply. Paradise Valley is slightly weaker, down from 110.1 to 109.3 over the last week - 114.8 four weeks ago. Demand is growing again, but supply is growing slightly faster. Laveen is still deteriorating, but only slowly - down from 81.8 to 80.7 over the last week - 91.5 four weeks ago, Supply is not rising but demand remains weak. Sun City is deteriorating from a relatively strong position - down from 108.2 to 104.7 in the last week - 126.8 four weeks ago. Supply is now above normal for the first time since March. El Mirage is slightly weaker - down from 102.9 to 101.4 in the last week - 111.9 four weeks ago. Demand is stable but supply is growing. Casa Grande is slightly weaker - down from 63.2 to 62.3 over the last week - 70.8 four weeks ago. Demand is stable but supply is growing. Sun Lakes is weakening from a relatively strong 142.1 to 134.8 over the last week - 178.2 four weeks ago. Supply is growing fast though demand remains fairly robust. Gold Canyon is still getting weaker, down from 71.3 to 69.2 in the last week - 84.2 four weeks ago. Demand is now on an upward trend but supply is growing faster. Cave Creek is doing poorly - down from 95.7 to 91.4 in the last week - 112.0 four weeks ago. Demand is dropping fast and supply is still increasing. Buckeye is doing poorly - down from 69.2 to 66.0 over the last week - 82.5 four weeks ago. Demand is weakening and supply is growing. Arizona City is rapidly deteriorating from a strong 126.7 to 116.0 over the last week - 152.5 four weeks ago. Supply is increasing and demand falling quickly. November 28 - The Cromford® Market Index has found a stable level at around 97.2, within the balanced zone with a slight bias in favor of buyers. This is for all areas & types within ARMLS. If we examine the single family market within the major cities we find: Tempe is improving strongly from 75.9 to 78.7 over the last week and is even above the 78.5 we saw last month. The demand index is up sharply in Tempe and the supply index has started to fall. Chandler is showing stronger signs - up from 104.7 to 105.6 over the last week - 108.9 last month. Demand is well up and supply has stabilized. Glendale is also showing improvement - up from 106.6 to 107.6 over the last week - 112.1 last month. Demand is up and supply has stabilized. Scottsdale is up slightly from 99.5 to 99.9 over the last week - 112.3 last month. Demand is up and supply has stabilized. Peoria is stable - unchanged from 90.6 over the last week - 105.0 last month. Demand is showing first slight signs of improvement. Mesa is stable - down from 96.7 to 96.6 over the last week - 104.8 last month. Demand is well up but supply is still growing too. Avondale is showing its first signs of stabilizing - down from 95.4 to 93.9 - 111.5 last month. Demand is increasing but supply is still growing too. Queen Creek is still deteriorating, albeit more slowly - down from 61.2 to 60.0 over the last week - 72.9 last month. Demand is flat and supply is growing. Phoenix is still gently falling - down from 95.3 to 93.5 over the last week - 106.4 last month. Demand has stopped falling but supply is growing. Gilbert is still weakening - down from 89.5 to 87.1 over the last week - 100.9 last month. Demand is still weak and supply is growing. Goodyear is weaker - down from 87.3 to 84.5 over the last week - 106.8 last month. Demand is stabilizing but supply is still growing strongly. Surprise is doing poorly - down from 79.9 to 76.5 over the last week - 92.8 last month. Demand is weak and supply is growing strongly. The above list is ranked by how well it has performed over the last week. There is a big difference between Tempe at the top and Surprise at the bottom. Three of the top four cities are in the golden rectangle centered on Scottsdale Road and Rural Road. This area tends to recover fastest from any downturn in the market. The bottom 5 cities have the disadvantage that they get the biggest share of supply from new construction, which helps buyers retain an advantage in negotiations. This is because resale home sellers have additional competition from new home builders. Tempe sellers has the advantage of competing with almost no new single family homes added to the supply. Cromford Daily Observations
Posted on: Mon, 02 Dec 2013 15:36:27 +0000
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