When 'they' say the market is 'mostly cooler' it is a very relative thing. The best evidence of this is another Cromford Report tool, the Cromford Market Index.
We share these charts with you on a pretty regular basis, but for the uninitiated, when a market is balanced (supply of inventory and respective buyer demand) the CMI score is 100.
The degree above 100 gives you the 'temperature' of a hot market.
Conversely, the degree below 100 gives the degree of 'cooling'.
With that in mind see the latest CMI chart below for 17 of the Valley's cities with the month-over-month change:
Cromford interpretation of the chart above ~
Most cities are seeing their CMI drop quickly now as inventory rises. Because supply has been so low recently, the increases are large in percentage terms. For example, Chandler has 150 active single-family listings (excluding UCB and CCBS) which is double the 75 it had at the beginning of April. However, the long-term average count for Chandler is 940 and the maximum we have measured was 2,481. So 150 would seem very low if we had not seen 75 three months earlier.
Paradise Valley is not seeing much of an increase in supply so far, but its demand has been falling from unusually high levels.
Cave Creek is unusual in that its supply is at a similar level to April. It has been zooming up the chart and looks likely to reach the number two spot soon.
With more supply to choose from, and list prices increasing more slowly, some buyers are being attracted back into the market. We are seeing a slight rise in demand in several cities. These include Glendale, Maricopa and Queen Creek. When supply increases and demand falls, the CMI heads down very quickly, but if demand starts to rise at the same time as supply increases, the CMI's rate of decline could well moderate.
An interesting time to be watching the market.
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This is a lot of statistical jargon to absorb if you're not familiar or so inclined. That being said, the effort to parse shifting sands is no small part of our job and the value I can bring to my client's decision-making process.
As I'm fond of saying, we don't have a crystal ball but we can cite trends and avoid the broad brush that paints the market monotone.
Takeaway: The payoff comes from paying special attention to your market segment of interest and observing/sharing how it contrasts with adjacent markets, both in terms of location and price range e.g. Scottsdale is slightly 'cooler' in terms of the CMI, while down the road in Cave Creek it's heating up by that same CMI measure. Both cities have significant luxury sectors (over $800K), though notice how Cave Creek is significantly more 'affordable' and seemingly trending more so, even as it's CMI is on the rise:
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