The Greater Phoenix housing market has changed dramatically over the past 2 months, at a pace that can make it hard to take in. You need a tool that can show how fast the market is switching from hot to cold and I suggest that tool is the Contract Ratio. You can find the definition in our definitions section.

Once you are fully comfortable with how the contract ratio works then the Tableau Chart can be useful for see what the contract ratio is doing in any chosen segment of the market.

A simpler chart with fewer controls is the weekly chart by city. Here is an example of that chart with Phoenix selected:

What we learn from this chart is that the contract ratio in the city of Phoenix (single-family detached) was a very strong 250 as recently as mid-April. In just 2 months, it has collapsed so far that it now stands at a lowly 62. This is already the weakest reading since 2014 for week 25. What makes it even more alarming is that the contract ratio has not yet stopped moving lower. It shows every sign of diving much lower still. Next week we expect it to go below the 2014 reading of 56.

There may be many people who have yet to fully comprehend or accept how hard the brakes have been slammed on our market. My tip - do not underestimate the impact of these changes. Brace yourself for a bumpy ride in the months ahead.

Market incites provided by the Cromford report.