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Arizona Real estate market update for November 2021

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Hope you’re having a great day!  Just want to update you on the market in this quick market update.  If you’ve been following me for a while you’ve noticed that the Cromford market index, MLS data, and the sources I’ve been documenting have been pretty much right on in showing you the direction of the real estate market, so much that I even bought a house recently trusting this data, follow my social media for the updates on the major remodel I’m doing and go through these blog posts for the past 4 years. Yes, supplies and contractors are not the easiest solutions right now either if remodeling or flippling but if you’re thinking of buying or selling you should at least know what to expect.  Also, I have no gain in giving you a headline that the market is going to crash like you see when scrolling through youtube, these people are looking for clicks which I fell for 6 years ago.  You have to stick with the real data and to start with you want to follow these simple stats Months of Supply, the Cromford Market index, and active listings.  In the Arizona market, these 3 points are enough to know what’s going on. We all know that Arizona and the Phoenix metro area are in the top 3 if not top for population growth and jobs, we just need more supply, this is the most important data, and it takes time to normalize.  For instance, we need about 16000-18000 active listings to have a stable market where prices are not going down and keeping up with inflation, we only have about 7000 active listings right now
For now, let’s keep track of these items:

  • Months of supply Currently around 1.24months.  A more balanced market is at 5-6 months. Months of supply is the number of of months it would take to sell all current inventory with no new listings going on.
  • Cromford market index 347 today, but this would have to be below 100 for prices to go down.  This will take min of 8-12 months and could just level off.
  • Active listings on the MLS are at 7300 which is climbing slightly but we need it to be at least 16000 for it to be a balanced market. That’s almost 9000 homes we need.

Take a look at the charts, they speak for themselves.

The market index has come off its high in the 500’s in March down to 346 but don’t let this fool you, we’re still in an extreme seller’s market and this number has to hit 100 before prices will stabilize.
Supply is increasing currently which is a good thing, we need more stability.
Different price points have different supply numbers. Obviously, below $300k there is barely any inventory and the $600-800k range is higher.
Now this is crazy, why would you want your rent to increase $300,500 or I’ve even seen $1500 in one year?
We’ve had a crazy few years, and its not over.

These Charts do the talking. The market currently is not going to crash anytime soon, we will be able to see it coming with all the data we have nowadays, I will be able to tell you. Watch for the Cromford market index to near 100, months of supply to reach 5-6 months, and active listings to reach 16,000 plus. Until then the market will continue to appreciate, you’ll sell your home fast, and you may face multiple offers because there are many people still wanting to buy and not many people wanting to sell. If you have a question about the market please call me at 480-466-4917.

Jay Bru

jay@jaybrugroup.com

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