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Could A Balanced Local Market Be Coming In The Near Future?

Balance Coming?

Welcome back to LUXE BLOG! We're thrilled to have you join us for this crucial discussion. We've been blogging like mad - this is our 35th post for October! It's a lot, but we're here to bring you the most relevant real estate news. Today, we're discussing whether a balanced Greater Phoenix housing market could be on the horizon.

What Does The Cromford Report Say?

The Cromford Report's recent data suggests that we could approach a balanced market soon. This is based on key indicators.

  • Main indicator: Months of Supply
  • Increase from 2.1 to 2.9 months recently
  • Balanced market in Phoenix: 3.5 to 4.5 months of supply

According to the Cromford Report, if the current trends continue, we might hit a balanced market in just two weeks. This is important news for both buyers and sellers in areas like Scottsdale, Paradise Valley, and Phoenix, where Williams Luxury Homes represents clients.

Also Read: Is The Greater Phoenix Market In A Bubble? What To Know

Photo of a luxury home in Greater Phoenix.

Months Of Supply Recently Rose From 2.1 to 2.9

Why Is Months Of Supply Important?

For those who are new to the term, months of supply is a measure that helps us understand market balance.

  • Indicates homes on the market
  • Reflects market demand
  • Currently at 2.9 months in Phoenix

While 6 months of supply generally indicates a balanced market nationwide, Greater Phoenix is a bit different. Here, a balanced market is characterized by a supply ranging from 3.5 to 4.5 months. At Williams Luxury Homes, we're always watching the latest numbers. And then applying what we know to our clients' advantage.

Sales Per Month & Active Listings

Another aspect that's contributing to the shift is the sales rate.

  • Sales have been declining since May
  • Mortgage rates hitting 8% a factor

The drop in monthly sales rates is getting some attention. The increase in mortgage rates is one of the variables affecting this trend.

  • Active listings are increasing
  • Listings staying on the market longer
  • Sales per month decreasing

Active listings are also rising, signaling a change in market dynamics. With more homes staying on the market for more extended periods, this could lead to a more balanced scenario.

Also Read: Every City In Greater Phoenix Saw Its CMI Fall Month-Over-Month

Photo of the 'The Valley'.

Active Listings In Greater Phoenix Have Been Rising

Impact On Pricing

The big question on everyone's mind is how this shift will affect home prices.

  • Similar trends observed in 2022
  • Prices started to soften as supply increased

Last year, when the months of supply were similar to the current numbers, we noticed a softening in prices. Given the trends, we might see a similar pattern unfold this year.

Final Thoughts

While we CANNOT predict the future of real estate in Arizona, the data points to an intriguing trend. A balanced market might arrive soon. We will see. Here at Williams Luxury Homes, we're committed to helping you navigate these market shifts with ease. Stay tuned to LUXE BLOG for more content!

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