January 26 Real Estate Market Update

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

Yet another all-green chart with 17 cities showing an increase in their Cromford® Market Index over the past month.

There has been an average increase of 12.4% in the Cromford® Market Index for the 17 cities, a strong rise but down slightly from the 12.6% we recorded last week. The drop in interest rates that started in October is bringing more offers for homes listed for sale. However there are also far more new listings arriving on the market than this time last year, which is stopping the market from heating up too fast. Year to date we have seen 7,467 new listings. This is up more than 22% from 2023 and even up 13% from 2022 and 10% from 2021. Nobody should be complaining about a lack of fresh supply any more, especially in the higher price ranges.

Demand is improving even faster, with 7,428 listings under contract, up 41% compared with the beginning of 2024. The monthly sales rate is still stuck around 4,000 because that depends on contracts signed during December which were unusually weak. We should start to see improving closing volumes in February.

Leading the pack once again are Gilbert, Glendale, Surprise, Phoenix and Peoria. The laggards include Goodyear, Scottsdale, Fountain Hills and Paradise Valley. The top end of the market is seeing a lot of new supply.

10 out of 17 cities are seller's markets. We have 4 cities that are balanced and 3 that remain buyer's markets, with Buckeye and Maricopa seeing a large amount of competition with supply from new home builders.

With demand and supply both increasing, we should see a recovery in transaction volumes and firm pricing, without the risk of runaway appreciation. However sentiment remains uncertain and volatile, so it would be wise not to look away for very long, or the situation may catch you by surprise.