2014 was one of the most balanced years in the Phoenix Metro residential real estate market according to Michael Orr’s (ASU) Cromford Index. One year ago the Cromford Index was just above “100” which Mr. Orr has determined to be a “balanced market” between supply and demand.
From that point the index steadily increased in 2015 favoring a seller’s market. The seller’s market that ensued reached an index of 148 during the first week of September just over two months ago. It has now steadily been decreasing and currently resides at 131. Remember, 100 is balanced, so this reversal only reinforces our market’s trend of maintaining balance.
For context, the Cromford index reached an incredible high of 308 back in April of 2005-which was the seller’s market of all seller’s markets. Just two years after that the index plummeted to its lowest point ever to 27 in October of 2007, a rabid buyer’s market. I can tell you that both of those markets were hell on steroids to work in.
In the near term, it looks as if balance will continue to prevail. Interest rates are remaining low, the number of buyers will remain about where it is now, and the supply of homes for sale is slightly increasing. For there to be meaningful change in any given buyer or seller direction will require an abundance of more buyers to send home prices higher, or a significant increase in the number of homes for sale to drive down values for buyers. From our vantage point we don’t see either of those events happening soon.
The major impacts however will be price based. The lowest price ranges (under $300K) will continue to be very strong for sellers. The highest price ranges, especially over $2,000,000 will not be kind to sellers. The moderate price range ($300K to $800K) should continue in, shall we say, a balanced sort of way.
If you or someone you know would benefit from our expertise, by all means have them contact us. We’ll be happy to help. It’s what we do! (602) 689 – 3100