March 27 - Real Estate Market Update

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

(Under 80 indicates a buyer's market, 80-120 are a balanced market, and over 120 is a seller's market)

The market continues to improve for sellers with the average CMI up 9.4% over the last month. The improvement is slowly decelerating, having been 11.0% last week and 12.6% two weeks ago.

Still looking very strong are Gilbert and Chandler . These are all up over 20% from 4 weeks ago.

In contrast, doing relatively poorly are Paradise Valley and Tempe. Paradise Valley looks likely to fall into a balanced market within the next week, with demand falling and supply on the rise. The rest of the Northeast Valley is looking stronger. Tempe gives the impression is is turning around, with its CMI up over the last week.

Demand has been affected by the higher interest rates that have prevailed during February and early March. However rates tumbled dramatically yesterday, so we could see some improvement in both demand and supply if the current rates persist. They have been extraordinarily volatile recently with the 30 year FHA rate dropping from 6.20% to 5.75% in just a single day. The VA rate has declined 50 basis points in 2 days, but the 5/1 ARM has risen from 6.14% to 6.55% during the last 3 days. I can't remember a time when interest rates jumped up and down so fast and frequently. However, FHA and VA loans look particularly attractive right now which will favor the low to mid-range market below $900,000.

We now have 13 cities that are seller's market, 1 balanced and 3 buyer's markets. These latter 3 at the bottom of the table have far more supply than most other areas but they are rather far from the center of Phoenix, which tempers demand a little. Competition from new builds is strong for anyone re-selling a home in Buckeye, Maricopa and Queen Creek