Many measures are very slow to react to changes in the market are less useful for this reason. Average days on market is one of these and we advise subscribers to pay scant attention to this oft-quoted but almost useless statistic.

One of the earliest statistics to react is the contract ratio, which can be found in the definitions section and is based of the ratio between listings under contract and listings available for purchase. It is a simple measure of the balance between supply and demand, with high number indicating high demand and low supply while low readings indicate the opposite.

If we look at the entire market within Greater Phoenix, that is, the ARMLS database but excluding out of area listings, we can see the following movements in the Contract Ratio:

1. We started 2022 with 159.5 (frenzy!) and quickly rose to 258.9 (insanity!!) for the week beginning Feb 20. This was not quite the all-time high because we recorded 287.4 for week beginning March 27, 2021
2. During March the contract ratio started to edge lower, reaching 249.0 by week beginning March 26. This was still insanity with crazy bidding wars.
3. In April the contract ratio started a relentless and speedy decline, reaching 168.6 by the end of April and 98.3 by early June. This is still a hot market reading, but the speed of the fall over the 9 weeks shouted a warning to everyone that the market was cooling fast.
4. By the beginning of July, the contract ratio had dropped to 58.3. We regard 60 and above as indicative of a hot market. 58.3 is in the "normal" range
5. By the end of July the contract ratio had fallen to 44, but here it found its footing. The mid-40s are very normal, with the market close to balance.
6. The contract ratio recovered slightly in August then fell back slowly again until we reached 40.9 in late September. Still in the normal range, but weakening.
7. October has seen another rapid decline in the contract ratio and we are at 34.3 as of October 8, which is at the cool end of normal
8. We regard readings below 30 as indicating a cold market and it appears we are slipping towards that boundary.

A price range which is exhibiting an unusually low contract ratio is $400,000 to $500,000, where we have slipped from 35.8 to 30.6 over the past 2 weeks. This is the range that looks most vulnerable to becoming a cold market.

Market insights provided by the Cromford Report.