Real Estate Market Update - July 15

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

The average change in CMI over the past month is -7.2%, a larger fall than the -6.9% we saw last week. However the rate of decline is slowing. In other words a -0.3% change is better than than the -0.8% we measured last week. If this trend is repeated then we could see the monthly deterioration reduce fairly soon.

As we saw during the previous 2 weeks, we only have 3 cities showing an increase in their Cromford® Market Index over the past month, while 14 have declined. The 3 improving are the same as last week, but only Avondale has improved by a decent percentage.

We have a long list of cities that moved substantially in favor of buyers: Tempe, Gilbert, Fountain Hills, Paradise Valley, Goodyear, Cave Creek, Glendale and Chandler.

9 out of 17 cities remain seller's markets over 110. We have 2 cities that are balanced, while the remaining 6 are buyer's markets. However only 3 remain over 140.

Not much has changed since last week and although the market is close to balance there is currently little sign that it will deteriorate to the point where we have a buyer's market overall.

The benign CPI data released this week has had a relatively small downward effect on mortgage rates, but a supercharged upward effect on the share prices of home builders. For example, KB Home rose more than 10% in hope of improved market conditions if the Federal Reserve starts to lower rates.

Overall supply looks like leveling off, bringing an end to the upward trend that has been in place since the beginning of the year. Without an excess of inventory, any improvement in demand caused by falling interest rates could translate to the CMI changing direction. However this is currently just a possibility and yet to be proven. We will certainly be reporting on it should we find solid evidence. Stay tuned.