Market Summary for the Beginning of 2025

Here are the basics – the ARMLS numbers for January 1, 2025 compared with January 1, 2024 for all areas & types:

There is quite a lot of positive news in these numbers. Obviously, supply is down from the November peak, but we would expect that as part of the usual seasonal pattern. What we don’t know is how fast supply will grow again in January and we will be closely watching that over the next several weeks. The decline was late starting in November but it really accelerated in December and ended in a big bang with a large number of listings expiring at the end of December. For sellers it is much better to have 7.3% fewer active listings to compete with. But if those expiring listings come straight back in January, the good news will have been an illusion.

Closed sales counts are improving nicely. December’s count was up more than 13% from a year ago, although we have to admit this was an easy target to beat. It is encouraging that the annual sales count has risen to almost 72,000. much healthier than the 69,627 we saw at the end of September. However, it is still well below the long term average of 85,000 per year.

Under contract counts remain subdued but at least we managed a 7% increase from the beginning of 2024.

A combination of reduced supply and a slight recovery in demand means the Cromford® Market Index has returned to the balanced zone between 90 and 110. We are no longer in a buyer’s market across all areas, though several outlying locations remain very favorable to buyers.

Overall, demand is slowly starting to rebuild despite mortgage rates remaining stubbornly high. Our concern is that we do not know how much new supply will arrive during the next three months. If we get a light load, the market will continue to move towards balance. If we get a large number of new listings, we could slip back into a buyer’s market. The next four weeks are likely to be critical.

Pricing was unusually strong in December, particularly when we look at the $/SF numbers. This measure is distorted by the relatively hot market in upscale luxury homes. These are selling in healthy numbers and for higher prices. A frothy stock market, combined with elevated cryptocurrency values means that those with significant capital investments are feeling much better off. The very wealthy have done extremely well over the past couple of years and as usual this has increased demand in the extreme high end markets, especially the Northeast Valley.

Most home builders’ stocks tell quite an interesting story in 2024 having gained hugely in value by the end of September only to give most or all of those gains back by the end of December once it became clear that mortgage rates were not coming down in a hurry. The inventory of completed but unsold new homes has recently been increasing for the USA as a whole and new home supply is more plentiful than it was this time last year. This may lead to more flexibility from home builders in sales negotiations during the first half of 2025, especially concerning homes that are ready to move in.

With 30-year fixed mortgage rates over 7%, we do not anticipate strong growth in demand, but the reversal of the earlier declining demand trend is a good sign that we have seen the worst. Everything now depends on how much additional supply will arrive over the next few months. Source Cromford Report

For the latest information, please visit my website. You’ll find a daily blog, monthly reports, and seller and buyer guides. Don’t forget to sign up for Neighborhood News, the best way to stay connected with what’s happening in the real estate market in your area. You can view homes that are currently for sale and those that have recently sold. Discover whether home sales in your neighborhood are trending upwards or downwards, and check current selling prices for homes nearby. You can also search real-time listings in any market area using the “SEARCH FOR HOMES” feature.

Looking ahead, I am excited to continue serving you and your real estate needs. Let’s make this year even more prosperous and fulfilling together.  May your 2025 be filled with joy, success, and new beginnings in your home and life.

Cheers to a fantastic New Year!

SHAWN KEANE