A useful way of measuring how hot the market is is the contract ratio (see definitions section for how it is calculated).

The overall market for all areas and types has seen its contract ratio decline from a high of 285 as recently as February 23 to 46 as of August 3. We usually consider the range 30 to 60 as being normal, with figures over 60 being unusually hot and those under 30 being unusually cold. The high-end sectors tend to have much lower contract ratios so 15 to 30 can be considered normal for an area like carefree or Paradise Valley.

If we look for ZIP codes where the single-family detached market is unusually cold right now we find a few very small ZIP codes with no contracts at all::

• Fort McDowell 85264
• Arlington 85322
• Black Canyon City 85324

The sales volumes are so small in these ZIP codes that having no contracts is not so unusual, so we exclude them from our analysis.

The following have some contracts, but low contract ratios indicating cold markets where buyers have an advantage over sellers. The contract ratios are shown in parentheses.

These are our top 20 targets for buyers:

1. Mesa 85215 (20)
2. Phoenix 85003 (20)
3. Phoenix 85007 (20)
4. Superior 85173 (20)
5. Tempe 85283 (24)
6. Scottsdale 85257 (25)
7. Casa Grande 85193 (25)
8. Casa Grande 85194 (25)
9. Phoenix 85045 (26)
10. Scottsdale 85258 (27)
11. Phoenix 85015 (27)
12. Litchfield Park 85340 (27)
13. Phoenix 85020 (27)
14. Phoenix 85048 (27)
15. Wittmann 85361 (28)
16. Scottsdale 85251 (28)
17. Anthem 85086 (28)
18. San Tan Valley 85140 (29)
19. Phoenix 85009 (30)
20. Phoenix 85044 (31)

We note that Ahwatukee is prominently featured in this list with all 3 of its ZIP codes (85044, 85045 and 85048), so as I buyer I would feel free to flex my negotiating muscles if shopping for homes in Ahwatukee.

At the other end of the scale there remain a few ZIP codes where the contract ratio remains relatively high (60 or more), including:

1. Arizona City 85123 (156)
2. Tempe 85284 (96)
3. Eloy 85131 (94)
4. Phoenix 85054 (86)
5. Mesa 85203 (83)
6. Casa Grande 85122 (72)
7. Phoenix 85053 (72)
8. Mesa 85201 (71)
9. Phoenix 85027 (65)
10. Coolidge 85128 (60)
11. Gold Canyon 85118 (60)
12. Mesa 85204 (60)
13. that's all folks

Pinal County is strongly featured in this list, especially the areas around Casa Grande, Eloy and Arizona City. I would not expect such an easy time as a buyer in the ZIP codes on this (admittedly short) list.

Segmenting by price, we see that the contract ratio for single-family homes priced below $350,000 is still over 60, so this market retains some strength. However prices have risen so much over the past 2 years that this segment represents only 4.5% of the total market.

The contract ratio for homes priced between $350,000 and $400,000 is 59, so at the top end of normal. But for homes over $400,000 and up to $1.5 million we now see contract ratios between 35 and 41. This is at the colder end of normal and the trend is strongly downward. This price range represents 82.4% of the market with $400,000 to $800,000 dominating with a 55.5% market share. This huge segment is where buyers are starting to gain the upper hand.

Over $1.5 million, contract ratios are in the mid-thirties, which is actually higher than usual. Demand has dropped significantly in this price range but supply remains quite low. The luxury market is very quiet, even for August which is always a very slow month, but the low supply means buyers do not have as much bargaining power as they enjoy below $1.5 million.

Market insights provided by the Cromford report.