Wednesday, June 1, 2022 / by Bryan Baylon
We issued a red flag warning on April 24 and in the 5 weeks since then the market has deteriorated at the fastest rate we have ever seen. The Cromford® Market Index is 272.2 today, but it stood at 406.2 on April 24, so it has plummeted by one third in just 5 weeks. On May 1, the CMI stood at 385.2 so it has dropped 113 points over the month. This is by far the largest monthly decline we have ever seen in the CMI.
We admit to being surprised at how quickly the market is cooling. We expected a downward trend but did not anticipate it would be so dramatic. The softening trend is now very well established and momentum is strong. We will shortly be entering the third quarter, usually the weakest time of year for the Greater Phoenix housing market. Even in a good year, prices tend to drift lower during the third quarter. We are not having a good year, despite the incredible strength of the first quarter.
- Supply is growing fast
- Demand is weakening
- Sales volumes are in swift decline
- More asking prices are being lowered
- Listing cancellations and expirations are starting to rise
The last time we saw a similar frenzied market cool down very quickly was in April to November 2005. This is a more striking reversal than we experienced that year.
Market incites provided by the Cromford report.