Before we engage in our Phoenix Metro market discussion, let’s take a look at June’s stats to get you somewhat up-to-date, though with the way the market’s so quickly moving, we might be out of date before the fireworks fly this evening. And oh, by the way HAPPY 4TH OF JULY!!!
Compared to last year at this time, listings are up 153%. Listings under contract have dropped 16% from last month and are down 24% versus a year ago.
According to the Cromford Report, “The rise in supply has been faster than ever seen before…the change in demand was equally stunning.” Compared to last year at this time, listings are up 153%. Listings under contract have dropped 16% from last month and are down 24% versus a year ago. In addition, monthly sales are down 21% from one year ago, and 8% compared with last month. That monthly sales number will drop more next month.
Keep in mind, that “pending” and “sold” stats are “lagging indicators.” Pending deals went under contract over the past several months, and a number of them had “locked” mortgage rates that enabled them to close at a lower than current lower rate. Sold deals went under contract 3-4 months prior to now. Next month and beyond we’ll see more of the reality of the market.
One segment of the market, per Cromford, that has upheld sales has been the iBuyer market, which are large companies (Offerpad, Opendoor, etc) still buying. This will, or should change, or we’ll see continued heavy losses by these companies. These companies create two deals for each house they buy, as they turn around to try and quickly sell it. This contributes to a higher skewing in sales numbers.
Builders are again being nice to Realtors, inviting us to bring our clients their way which is a stark difference over the past few years. They’ve gone from rationing their product only a few months ago to needing incentives such as mortgage rate buy-downs to coax buyers to sign up or keep their existing orders. Alas, there is nothing new under the sun.
According to Cromford’s “Contract Ratio,” our market has now entered the top of the “balance range.” At the current rate of downward speed, it’s anyone’s guess if (when) we re-enter a “buyer’s market,” but it’s likely to happen sooner than later.