Welcome back to Williams Luxury Homes’ stat update! Today, we’re excited to dive into some of the latest CMIs for Greater Phoenix, as reported by Cromford Report. As the title said, we will be revealing an important Greater Phoenix figure that increased by 35% since late October. As usual, we will also be going over the latest Supply Index and Demand Index. Most importantly, we remain dedicated to providing up-to-date information, and this data from Cromford Report is no exception.
In addition to discussing the Greater Phoenix market as a whole, we’ll also be taking a closer look at specific cities across the valley. We will look at stats for all 17 primary cities/areas in the Phoenix Metro, including Chandler, Gilbert, Mesa, Fountain Hills, and PV.
Have you ever wondered how real estate professionals measure the health of a local housing market? One useful tool is the Cromford Market Index (CMI), which takes into account several factors such as supply and demand to determine whether it’s a buyer’s, seller’s or balanced market. The CMI is measured on a scale from 0 to 500. A score of 90 or below indicates a buyer’s market while scores above 110 suggest a seller’s market. A score between 90 and 110 denotes a balanced market. Make sense? Moving along…
To calculate the CMI, analysts at the Cromford Report examine data on each of the 17 cities and areas within the Phoenix Metro local market. This includes information on home sales, active listings, pending sales, days on market, and other metrics. One important aspect that affects CMI scores is the balance between supply and demand. It’s important to note that fluctuations in CMI scores are normal and should be monitored closely. Understanding these trends can help inform your decisions when buying or selling real estate in Phoenix Metro area.
When there are more buyers than homes available for sale, it creates upward pressure on prices. This signals a seller’s market. Conversely, when there are more homes for sale than buyers interested in purchasing them, it creates downward pressure on prices. And yes, you guessed it, suggests a buyer’s market. We gauge this by looking at the Supply Index and the Demand Index (published by Cromford Report on March 5th, 2023).
As you can see, the demand is currently stronger than the amount of supply. Many factor splay into this but a large one is that many new homebuilders stopped applying for new permits. To give a comparison of how much healthier the market is today as opposed to a few months back, below is a snippet from a stat update we did on October 27th, 2022.
“On October 26th, 2022, the Supply Index was 81.5 and that Demand Index was 78.6. This is the first time in many years that the Supply Index was higher than the Demand Index.”
We remember writing that. Why? Because it was depressing. We like balanced markets. Many feared the entire United States real estate market was headed into a dark place. And while we’re not here to predict the future, for now, the market simply has not crashed. It adjusted. Yet now, it has been adjusting in favor of SELLERS.
On 10/20/22, the CMI for the OVERALL Greater Phoenix market was 99.1. On 10/26/22, it was even WORSE at 96.4. As of 3/7/23, the CMI (Cromford Market Index) for the Greater Phoenix Metro is 130.1. That is a 35% increase in the CMI. Right now, at 130.1, it sits at 20.1 points above a balanced market. What does this equate to in appreciation rate? That’s IMPOSSIBLE to answer. Dozens of factors come into play pertaining to real estate markets. Anything could happen. All we are doing here is sharing the latest information.
Out of the 17 measured areas, 12 were seller’s markets, 2 were balanced, and 3 were buyer’s markets. In contrast, only 6 cities were seller’s markets. So that is HALF of how many there are today.
According the ARMLS, there were 15,278 active and coming soon listings on the market. Out of that figure, 12,129 were single family homes. While that number is far up from this time last year, it’s MUCH lower than the peak of inventory around October. As of March 1st, ARMLS reported 9,115 pending sales. This is down 25% year over year.
There is approximately 3.70 months of supply at the current way the market is moving.
Thanks for tuning in to Williams Luxury Homes’ stat update! As you can see, the Greater Phoenix market has steadily improved over the past few months. With a 35% increase in the Cromford Market Index since October, it’s safe to say it’s currently a seller’s market. But remember, real estate markets can be unpredictable, so staying informed and making decisions based on current data is essential. At Williams Luxury Homes, we’re committed to providing up-to-date information and helping our clients navigate the ever-changing world of real estate. Stay tuned for more updates!