April 17 Real Estate Market Update

Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

(A CMI of below 80 indicates a buyer's market, between 80 and 120 is a balanced market, and over 120 is a seller's market)

We now have 17 of the 17 cities showing improvement for sellers over the past month with Paradise Valley finding its mojo again. The average CMI is up 10.0% over the last month. The improvement is accelerating slightly, having been 9.7% last week.

The positive trend is spreading widely now, but the intensity has dropped since nowhere is it showing a monthly CMI increase of 20% or more. Maricopa is improving fastest at 17% with Goodyear, Gilbert and Glendale just behind at 16%. Queen Creek will be a balanced market (over 90) in a matter of days with Maricopa closing the gap quickly. Only Buckeye remains a strong location for buyers to flex their muscles and even here the trend is working against them.

If all the indicators are showing green, then why are so many real estate agents unhappy? That's because we have so few people wanting to buy a home. The reason the table above is positive is that we have even fewer people wanting to sell a home. Motivation to sell is extremely low. There are more people who want to buy than sell - that indicates prices will rise. But the lack of sellers and buyers is bad news for industry professionals who like to see high volumes of both.

The media and many analysts seem to focus on demand, which is obviously poor, so they come up with gloomy forecasts, wrongly. They forget that it takes two to tango. Demand means very little unless it measured against supply. Supply is unusually weak except at the top end of the market - the number of new listings continues to drift lower from already low levels. The unimpressive demand is more than enough to soak up all the new supply and more. Buyers have less to choose from and although they are few in number they are now competing for a dwindling stock of homes for sale. Times are getting tougher for buyers.

In this environment estate agents are not busy enough, but prices have nowhere to go but up. The investors and iBuyers with strong motivation to sell were frantic in the second half of 2022, causing prices to tumble, but that is old news.

Average sale $/SF is already up 5% in 2023 and we are only in mid-April