Market Update 5/2024

 The latest S&P / Case-Shiller® Home Price Index® numbers were published this Tuesday.

The new report covers home sales during the period January to March 2024. This means the typical home sale closed in mid February, more than 3 months ago. Please remember that Case-Shiller data is fairly old, even on the day it is released.

A big turn-around has taken place in the last 2 months. We have all 20 cities showing rising prices for last month. The Pacific coast had another remarkably strong month.

Comparing with the previous month's series we see the following changes:

1. Seattle +2.70%
2. San Francisco +2.59%
3. Cleveland +2.40%
4. San Diego +2.23%
5. Boston +1.88%
6. Los Angeles +1.70%
7. Chicago +1.66%
8. New York +1.50%
9. Portland +1.47%
10. Minneapolis +1.34%
11. Denver +1.33%
12. Washington +1.27%
13. Dallas +1.19%
14. Atlanta +1.15%
15. Detroit +1.14%
16. Miami +0.96%
17. Charlotte +0.96%
18. Las Vegas +0.92%
19. Phoenix +0.53%
20. Tampa +0.50%

Phoenix has fallen from 14th to 19th place since last month. The national average increase month to month was 1.29%, so Phoenix under-performed significantly against that benchmark.

Comparing year over year, we see the following changes:

1. San Diego +11.1%
2. New York +9.2%
3. Cleveland +8.8%
4. Los Angeles +8.8%
5. Boston +8.7%
6. Chicago +8.7%
7. Miami +8.2%
8. Seattle +7.8%
9. Detroit +7.7%
10. Las Vegas +7.7%
11. Charlotte +7.5%
12. Washington +7.0%
13. Atlanta +6.1%
14. Phoenix +4.9%
15. San Francisco +4.9%
16. Tampa +3.8%
17. Dallas +3.6%
18. Minneapolis +3.3%
19. Portland +2.2%
20. Denver +2.1%

Phoenix stayed at 14th place, and is therefore still in the bottom half on a year over year basis. 

All 20 of the cities are again showing positive price movement from one year ago with Denver and Portland at the bottom. Southern California and the North are in the lead.

The national average is +6.5% year over year. Phoenix is below that percentage, and in a similar situation to last month.

Cromford Daily Observation ~ 

The typical 30-year fixed mortgage rate has been varying between 7% and 7.25% since May 6, which is better for buyers than the 7.25% to 7.5% range that we saw between April 11 and May 6.

Despite the better rates, demand has stayed weak and even weakened a little further. The number of listings under contract across all types and areas within the ARMLS database is 8,779. This is down 7% from the 9,441 we saw on April 27. It is also down almost 10% from this time last year.

As we approach the hottest months of the year, when demand tends to fall anyway, this weakness is not encouraging. 

Supply continues to rise, although slowly and the current trends are suggesting continued deterioration for sellers. It would not be a surprise if demand were to fall enough to match the supply of active listings over the next several weeks.

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I can offer a more positive assessment with a simple bifurcation of the market over vs. under $800K:

Up to $800K Listings Under Contract - our best barometer of sales - activity is off 12.5% Year-over-Year ~

$800K plus Listings Under Contract are up 2.2% Year-over-Year ~

Further, as you go up in price range there is a year-over-year increase in demand.

In fact, the $1.5 plus market is up 11% year-over-year ~

In sum, there's an inverse relationship between price and demand - as you go up in price range, demand increases.

Takeaways ~

• That last line is a good market summation - 'as you go up in price range, demand increases'.
• This bifurcation has been with us for some time as the rise in interest rates have impacted affordability.
• Since inventory is increasing, this spells opportunity for those who can manage the rates e.g. knowing they can always refinance if rates moderate (in an election year).
• And for the more resilient luxury sector, well, money continues to move to Arizona!