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March 2023 Arizona Real Estate Market Update

Here is a full list of all the charts, click here

I hope this helps; please call me to know what’s happening in your market. 

Yes prices are ticking back up, its in the data.  Although it doesn’t feel like it, it is.  From May 2022 till now, prices have come down 13.3%.  Will they go lower, still possible but it is what it is.

Youtubers click bait

They're not taking all the data into consideration and are typically not from AZ.

New Listings

Not many coming to market as a surprise. Lets see what the future brings.

Historically still low or average.

This is what is so frustrating for buyers.  The payments.  There are ways around this with refinancing and using the 2/1 buydown.  

Days on Market – Active Listings is the average cumulative days on market for Active Listings 

Contract Ratio indicates how “hot” a market is. It specifically measures the number of completed sales contracts relative to the supply of active listings. It is defined as 100 x (Pending Listings + UCB Listings) / Active Listings Excluding UCB. The higher the number the greater the buying activity relative to supply. If this number rises then it is a sign of growing contract activity and a positive signal for sellers. Conversely a falling number is a sign of a weakening market – either supply of active listings is increasing or contract activity is slowing, or both. In a balanced market for normal market segments, the value of the Contract Ratio is usually between 30 and 60. When it lies below 20 the market can be considered “slow” or a “cold market”. Above 60 can be considered a “hot market” and when it moves above 100 we regard this as evidence of a “buying frenzy”. In high-end luxury market segments the normal level is lower, usually lying between 15 and 25.

Cromford Market Index™ is a value that provides a short term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer’s market, while values above 100 indicate a seller’s market. A value of 100 indicates a balanced market.

Cromford Market Index™ is a value that provides a short term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market.

This is one of the reasons it’s so frustrating for buyers; we have low inventory, interest rates are high, and you have the uncertainty of what’s to come.  Home prices are predicted to be strong. You have to calculate the value of home ownership vs renting.  If you stay put for 3-5 years, you’ll be better off buying.  

Youtubers concentrate on the last 3 years, well I suppose it’s bad, but look at the past decade.  Listings are coming down, the contract ratio is climbing, and prices are reversing.  It’s all in the stats.

 It is possible that you are skeptical when I claim that prices are heading higher. List prices have been moving up for several months but sales prices, not so much. Until now that is. Look at the daily chart below:

The $264 we hit in the middle of January is now well behind us, and we are threatening to breach the $274 level. We may hit some resistance at this level, but there is also positive news coming from the percent of list department. Right now, homes are closing for an average of 97,2% of list. This is well up from the 96.5% we saw during January and the best reading since October.

The Federal Reserve will not like these signs because they want prices to decrease. This may result in interest rates moving higher again. This may suppress demand, but it may also make buyers think current rates are better than future rates, justifying a purchase decision now rather than later. That could be a wise move if prices and rates both rise.

 

Life is tough, especially when putting a roof over your head nowadays, it’s just expensive, and it feels like you struggling, right?  Some not so much more than others but items are expensive still, homes are expensive, rent is expensive, and the fed is trying to slow the buying of Americans.  Things are adjusting along with the post covid life.  Many mistakes were made, and now we’re paying for it.  

This data is from the Cromford Market Report, which I subscribe to and is the only way in Arizona to get true information.  It’s mostly been spot on since I’ve watched it, except when things turn fast like in the spring of 2022 with sharp interest rate hikes.  Data lags, so it’s hard to make decisions.  I can also get you specific data to your zip code, remember every zip code and city is different.  

Hope you’re well and i’d love to help!

You can reach me at 480-466-4917 or jay@jaybrugroup.com

Jay Bru

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