Is This a Worrying Sign of Market Weakness? Not Really.

The monthly average price per square foot for closed listings has dropped over the last 4 weeks - see the chart below:

Is this a worrying sign of weakness? Not really. It is a seasonal effect caused by the relative absence of luxury property closings during the third quarter. It happens almost every year. Luxury closings peak in May and June and after that, people who can afford luxury homes usually find ways of not being in Central Arizona in July and August, when temperatures tend to stay over 110F for long periods of time. They don't like moving in during that weather. Homes that close during July and August tend to be smaller and cheaper, designed for regular folks, who have to put up with the heat.

Two things in this chart that are sending positive signals:

1. The average price per square foot for listings under contract is still showing a rising trend, albeit a slow one.
2. The average % of list for closed listings is climbing - you can see that the red and brown lines are getting closer over time.

The Cromford® Market Index is still telling us we have a seller's market at 160-165, even though it is no longer moving higher.