THE HOUSE REPORT - OCT 2023

THE

HOUSE REPORT

INSIDER LOOK AT THE PHOENIX METRO MARKET

TRENDS

EXPERT GUIDANCE

INSIDER INSIGHT

An overview into which trends to watch

Navigate this year’s market with confidence

Words of wisdom from Nicole Kobrinsky

Copyright October © 2023

CONTENTS

Overall Insights 1

A quick and insightful look at the realities of the real estate market in Phoenix Metro

Highlights 2

We utilize the The Cromford Index™ which is a set of market indicators to measure the balance of supply and demand

Trends 3-4

A comprehensive look at more detailed market statistics from a past and current perspective

OVERALL INSIGHTS Mortgage rates have hit their highest levels in 20 years and the impact on demand can be seen in the numbers.

Listings under contract fell another 8.6% from the dismal level of last month.

Closed sales were also disappointing dropping another 11% from last month.

New listings remain scarce, but the flow has increased over the last 2 months.

Demand is so poor that the active listing count is starting to build, up 12% over the last month. However it remains well below last year at this time.

Price readings have something for everyone, with the average $/SF for closed listings up sharply and now over 3% higher than this time last year.

However the median sales price is 1.6% below last year and slightly lower than last month. This strange and unusual behavior is caused by pricing at the high end remaining stronger than it is at the low end.

HOUSE REPORT | PAGE 1

The balance between supply and demand still favors sellers in the majority of markets, but negotiating power is swinging towards buyers with every day that passes. Supply rising and demand falling means this trend is gathering strength. If interest rates remain in the high sevens or increase further, then we can expect market balance to hit within 2 months or so. However we usually see a significant weakening of supply from the middle of November to the end of the year and this could temper the downward direction in the Cromford® Market Index.

Demand remains much better in the new home market, though even here buyers will find it increasingly hard to qualify for loans if interest rates get closer to 8%.

A year ago, the market was looking very weak and few people imagined that $/SF could possible go up 3% in the following 12 months.

This reinforces how unpredictable the market can be when looking more than a couple of months out. The best that can be done with math is a well-defined interpretation of the trend during the next 8 weeks or so.

Right now these 8 weeks are not looking rosy. Just remember we felt the same way in October 2022.

Nicole Kobrinsky PRESIDENT & BROKER OF RECORD

DATA SOURCE: ARIZONA REGIONAL MULTIPLE LISTING SERVICE, INC (ARMLS) & CROMFORD ASSOCIATES LLC

HIGHLIGHTS CROMFORD MARKET INDEX | ALL AREAS & TYPES

MARKET TYPE ABOVE 100 SELLER'S MARKET

100 BALANCED

BELOW 100 BUYER'S MARKET

HOUSE REPORT| PAGE 2

SUPPLY TREND

MARKET INDEX

DEMAND TREND

The Supply Trend Index is up a small 2.4 pts in the last month

The 100 mark represents the index value for a balanced market. A value above 100 represents a market that favors a seller.

A value below 100 represents a market that favors a buyer. The Market Index Trend is down 15.8 pts in the last month.

The Demand Index Trend is down a tiny 0.4pts in the last month

DATA SOURCE: ARIZONA REGIONAL MULTIPLE LISTING SERVICE, INC (ARMLS) & CROMFORD ASSOCIATES LLC

TRENDS THREE YEAR | ALL AREAS & TYPES

CROMFORD MARKET INDEX

HOUSE REPORT| PAGE 3

MARKET HIGH

2023 EXPECTATIONS

MARKET LOW

The Market Index was 514 at the height of the market in May 2021.

In January 2023, we began the shift back into to a seller's market and are sitting at an Index of 193.8.

Resale pricing paused in July but still looks likely to overtake last year's pricing during the next three months.

In the late Spring of 2022, the market decelerated quickly. The lowest Market Index of 88.3 was seen in December 2022.

DATA SOURCE: ARIZONA REGIONAL MULTIPLE LISTING SERVICE, INC (ARMLS) & CROMFORD ASSOCIATES LLC

TRENDS YEAR OVER YEAR | ALL AREAS & TYPES

AS OF SEPTEMBER 2022 ACTIVE LISTINGS

AS OF SEPTEMBER %∆ (yr) 2023

1 MONTH AGO

%∆ (1 mo)

20,084

13,404

-33%

11,969

12%

22,580

15,639

−31%

14,476

8%

PENDING LISTINGS

4,862

4,264

-12%

4,604

-7.4%

LISTINGS UNDER CONTRACT

7,358

6,499

-12%

7,111

-8.6%

DAYS ON MARKET

51

56

9.8%

57

-1.7%

MONTHS OF INVENTORY

3.2 mo

2.6

-18.75%

2.1

23.8%

SALES PER MONTH

6,460

5,563

-14%

6,261

-11%

SALES PER YEAR

96,009

72,794

-24.2%

73,796

-1.3%

MONTHLY AVERAGE SALES PRICE PER SQ. FT.

$276.60

$285.08

3.1%

$281.99

1.1%

MONTHLY MEDIAN SALES PRICE

$439,000

$432,000

-1.6%

$435,000

-.07%

(excluding under contract)

ACTIVE LISTINGS (including under contract)

HOUSE REPORT| PAGE 4

PRICING

INVENTORY

VOLUME

The monthly median sales price and monthly average price per square foot went down slightly YOY.

Active listings are down 31% and months of inventory is down from 3.2 months to 2.6 months YOY. Prices are likely to inch upward in the coming months especially if demand picks up in the Fall and/or interest rates decline.

Residential transactions are down 11% MOM. Overall volume for the year is down 24.2%.

DATA SOURCE: ARIZONA REGIONAL MULTIPLE LISTING SERVICE, INC (ARMLS) & CROMFORD ASSOCIATES LLC

Questions or Comments? Email Report author: Nicole Kobrinsky at nicole@housegallery.com

6901 East 1st St Suite 103 Scottsdale, Arizona 85251 (480)808-1223 | housegallery.com

© 2023 HOUSE GALLERY COLLECTIVE. ALL WORLDWIDE RIGHTS RESERVED. ALL MATERIAL PRESENTED HEREIN IS INTENDED FOR INFORMATION PURPOSES ONLY. WHILE, THIS INFORMATION IS BELIEVED TO BE CORRECT, IT IS REPRESENTED SUBJECT TO ERRORS, OMISSIONS, CHANGES OR WITHDRAWAL WITHOUT NOTICE. THIS INFORMATION IS BASED ON DATA FROM ARIZONA REGIONAL MULTIPLE LISTING SERVICE, INC (ARMLS), CROMFORD ASSOCIATES LLC , REALTORS PROPERTY RESOURCE®, LLC AND INTERPRETED BY HOUSE GALLERY COLLECTIVE, LLC. DATA HAS BEEN LIMITED TO SALES REPORTED WITHIN THE COUNTY OF MARICOPA BOUNDARIES. IF YOUR PROPERTY IS CURRENTLY LISTED WITH ANOTHER REAL ESTATE BROKER, OR YOUR ARE UNDER A BUYER REPRESENTATION CONTRACT WITH ANOTHER REAL ESTATE BROKER, PLEASE DISREGARD THIS OFFER. IT IS NOT OUR INTENTION TO SOLICIT THE OFFERINGS OF OTHER REAL ESTATE BROKERS.