April 24 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 Cromford Market Index [CMI] of under 80 indicates a Buyer's Market, 80-120 is a Balanced Market, and over 120 is a Seller's Market)

Once again we have 17 of the 17 cities showing improvement for sellers over the past month with all these areas witnessing a strengthening market. The average CMI is up 11.4% over the last month. The improvement is accelerating once again, having been 10.0% last week. This is due to an increase in the number of listings going under contract and falling supply counts.

The positive trend is spreading widely now with even the slowest improving areas (Surprise, Cave Creek) showing a 6% increase. Tempe is improving fastest at 20% with Paradise Valley, Glendale and Goodyear just behind at 16% to 19%. Queen Creek is now a balanced market (over 90) and Maricopa is heading in that direction. Buckeye remains a buyer's market and has some ground to make up.

There are still plenty of people who believe the market "should" be crashing, but the market is not taking any notice of this foolishness.

Things are even more positive when we look strictly at the new home market. Pricing has remained stronger than the re-sale market and builders are having little trouble selling all the homes they can complete. Gross margins are strong and leave room for incentives to close the deal.

Home builders may have more difficulty getting financed after recent bank failures have tightened up commercial lending. This will favor the larger public builders who are sitting on balance sheets with large piles of cash and have fixed interest loans that seem very cheap by today's standards. We anticipate this will mean the large developers will probably grow their market share at the expense of the smaller builders. Wall Street seems to agree, with home builder's stocks moving strongly higher over the past 3 months.