September 2023 Market Update

In today’s LUXE BLOG, we’re going to go over U.S. Housing news and the LATEST DATA regarding Greater Phoenix’s real estate market. As we always make clear, we’re upfront. We’re not here to just paint a pretty picture. Yet while the front half of this article may sting, the back half is fairly good for Greater Phoenix. MAKE SURE to see the City By City section. Lots of good stats there. Let’s get into it.

The Basics

• The Crawford Market Index (CMI) indicates a seller’s market.
• However, it’s a weaker seller’s market compared to previous years.
• Demand has decreased.
• Supply has slightly risen.
• The balance between supply and demand is shifting.
• Different cities in the Phoenix Metro area experience varying market conditions.
• Some cities are seeing more significant changes in CMI than others.

FULL STATS FOUND BELOW

Gen-Z Struggles With Homeownership

• Many Gen Z and Millennials feel homeownership is out of reach.
• Factors include inflation, rising debt, and higher borrowing costs.
• A significant obstacle is saving for a down payment.
• Student loan debt is another roadblock for potential buyers.
• The average payment takes up a substantial portion of household income.
• While this data is on a national scale, Phoenix faces similar affordability challenges.

Also Read: The Top Reasons Why People Choose Arizona Over California

Real Estate Investor Woes

• Home sales at a loss reach levels not seen since 2016.
• Investors exiting the market is a growing trend.
• Phoenix leads in the number of investor losses.
• A challenging market requires expertise and a solid strategy for profit.
• Flipping houses has become more complex with changing market dynamics.

Mortgage Demand Stalls

• Mortgage demand hits levels last seen in 1996.
• Interest rates have increased, affecting refinances.
• Mortgage applications down 27% from the same time last year.
• The current market is less favorable for buyers compared to the previous year.
• The CPI report on inflation adds uncertainty to the mix.
• The upcoming FED meeting may offer insights into future rate hikes.

Also Read: Why Is Rent So High In The State Of Arizona? Things To Know

Sellers In Greater Phoenix Have Lost Some Power Since August 2023

Before We Get Into Greater Phoenix’s Stats

Before going over data, we want to talk about how we look at it. CromfordReport.com is a leading market data company here in ‘The Valley’. They’ve been the go-to company for statistics for a long time. They use what is called The Cromford Market Index (CMI) to gauge the market. Using data from 17 major cities and/or municipalities in Greater Phoenix, they break down seller demand, buyer demand, the overall market health, and each area’s overall health individually. The collective of all these factors make up the CMI.

The overall CMI and individual CMIs go as follows – 90 and under = buyer’s market. 90-110 = balanced market. 110+ = seller’s market. The higher the number above 110, the stronger of a seller’s market we are in. Back during the pandemic boom, the overall CMI almost hit 500! That was NOT sustainable. At that number, the market was appreciating at up to 35% a year. What happened was a ton of people bought homes here with VERY LOW rates. Now they have lots of equity, a low rate, and not much motivation to sell. Meanwhile, buyers are facing high interest rates and low return.

As of 9/20/23, the overall CMI was 149.4. Remember, anything over 110 is considered a seller’s market. However, the CMI has been dropping a bit as of late. And when we look at the 17 individual areas, the pace of the drop has increased a bit. With that said, WE EXPECTED THIS. Southern Arizona’s real estate market dominated during the pandemic. Of course things are going to even out some. In many ways, our market is healthier than it has been in a long time. And while we need rates to come down and more seller’s to become motivated to sell, the main driving factor of our somewhat stable market is a lack of new inventory.

Also, as of 9/20/23, the Supply Index was 50.6 while the Supply Index was 75.6. In both of these indicators, 110 would be considered “normal”. Basically, demand is down, but supply is WAY down. And both are below normal.

Also Read: What Is It Like To Live In Arizona?

City By City – CMIs As Of 9/14/23

Below is a list of the main 17 cities and/or areas measured (strongest to weakest). What is interesting to note is although Chandler is the strongest, it also fell the MOST month-over-month. This is a FANTASTIC example of how hard real estate markets are to predict.

• Chandler: 246.2 (Negative Change -20% from 309.1 Last Month)
• Glendale: 191.9 (Negative Change -9% from 211.6 Last Month)
• Phoenix: 190.7 (Negative Change -6% from 202.1 Last Month)
• Paradise Valley: 190.3 (Positive Change 1% from 188.9 Last Month)
• Fountain Hills: 184.0 (Negative Change -11% from 207.1 Last Month)
• Mesa: 183.3 (Negative Change -8% from 200.0 Last Month)
• Gilbert: 181.3 (Negative Change -15% from 212.1 Last Month)
• Cave Creek: 175.6 (Positive Change 18% from 149.0 Last Month)
• Scottsdale: 168.8 (Negative Change -6% from 179.5 Last Month)
• Avondale: 160.4 (Negative Change -9% from 177.1 Last Month)
• Peoria: 141.5 (Negative Change -3% from 145.8 Last Month)
• Tempe: 136.1 (Positive Change 5% from 130.1 Last Month)
• Surprise: 117.7 (Negative Change -9% from 129.7 Last Month)
• Buckeye: 112.2 (Negative Change -5% from 118.1 Last Month)
• Goodyear: 105.3 (Negative Change -10% from 116.7 Last Month)
• Maricopa: 105.2 (Negative Change -4% from 109.5 Last Month)
• Queen Creek: 97.7 (Negative Change -8% from 106.0 Last Month)

Also Read: Things To Know About Arizona

We Hope You Enjoyed

Recently, Williams Luxury Home became our own brokerage! Since our conception, we were a team at another firm. But now, as of September 19th, we’re our own firm. And that fires us up. Why? Because it reflects our dedication. A dedication to a craft known as luxury real estate. We know this market. And we know how to protect OUR CLIENTS. Via our 150+ years of combined experience and DEEP connections in cities such as Scottsdale and Paradise Valley as well as across this state, we make sure GOOD THINGS happen for our clients. That’s what we do. See you next time.