Market Summary for the Beginning of May 2024

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Here are the basics – the ARMLS numbers for May 1, 2024 compared with May 1, 2023 for all areas & types:

Once again, supply continued to grow over the last month, which is seasonally abnormal. However, it only grew 0.6% and remains below normal. Buyers have 37% more homes to choose from than they had last year but still face 30-year mortgage rates over 7% which is limiting demand.

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Some signs are starting to look slightly positive. We have more pending listings than last month and under contract listings comfortably exceed 9,000 at last, up 8.5% from last month, though they are still down 6.3% from this time last year. The closed sales count for April was higher than both last year and last month, which is reassuring at first sight. However we had 22 working days in April 2024 and only 20 in April 2023, so the comparison is weighted in favor of the month that just completed. If we compute the number of closed sales per working day we are actually down 4.7% to 319 from 334 a year ago.

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Pricing is the brightest spot for sellers, and advanced further than expected over the last 30 days. The mix of homes that closed favors larger, more luxurious properties, as evidenced by the average sq. ft. rising from 1,975 in March to 1,996 in April. The price per square foot is up almost 10% from this time last year while the median sale price is up almost 6%. On top of stubbornly high interest rates (at least compared to the last decade), these higher prices are keeping a lid on demand. In these circumstances, the under contract count is proving to be quite resilient so far.

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Various reports suggest that more buyers are looking for homes that are move-in ready and are less willing to consider homes that need a lot of work to bring up-to-spec. This trend may partially explain why new home sales remain robust and far healthier than re-sales, and it also opens-up an increased opportunity for fix-and-flip investors. They should be seeing less competition from iBuyers, institutional investors looking for homes to rent and ordinary home buyers. The consequence is that they may be able to get better gross margins between their buying and selling prices than in the market that prevailed over the last several years. However, this effect is balanced by inflation causing fix-up costs to increase.

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Given the recent trend in mortgage rates, the current market is holding up a little better than expected. The Cromford® Market Index stands a point above the balanced zone (90 to 110) and has barely declined over the past 2 weeks. Being stuck at just over 110 is superior to being stuck at 100 from a seller’s perspective. Areas closer to the center of the valley still have the advantage of tight supply to keep seller’s in control. However several re-sale markets are much more favorable to buyers, especially Maricopa, Buckeye and San Tan Valley, all of which suffer strong competition from new homes.

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The outlook for May is more of the same, but the housing market remains very sensitive to any significant change in mortgage rates.

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Go to my website for up-to-date information and a special feature called “Neighborhood News” “the best way to stay connected to what’s happening in the real estate market in your area”.  See homes that are for sale and recently sold, find out if home sales in your neighborhood are trending up or down, see what homes around you are currently selling for.  Also, you can search real time listings in any area of the market under (Find Your Dream Home.)  Check it out and stay updated with my daily blog and monthly market report that I send out monthly.   

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If you’re considering selling or buying, give me a call to discuss your situation and current market conditions.

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