Chandler’s real estate market is heading for a new equilibrium

By Paul Maryniak
Chief Editor

Chandler is rapidly becoming a home buyers’ market or at least reaching a balance between supply and demand, according to a leading Phoenix Metro Housing Market Reports analyst – but let this brings new hope to buyers is another matter.

The Cromford report said Chandler and the entire region are seeing demand fall and inventory rise sharply — sending the Phoenix metro area into territory not seen in more than two years.

This change means that the rise in house prices has slowed and sellers are no longer in the catbird’s seat in sales negotiations – often putting buyers at the mercy of bidding wars, foregoing inspections or making other concessions in a desperate effort to secure a home.

While a sudden flood of new listings could be welcomed by potential buyers, the Cromford report said they could be in for more grief. The only difference is that at least some sellers will take their tearful towels with them as they watch their homes spend weeks on listings for sale.

The Cromford Report and national real estate experts noted that while inventory of resales and new homes has increased dramatically over the past month, demand for these is falling sharply as buyers remain discouraged by prices at record highs and rising interest rates.

“In summary, prices have stopped rising but are still much higher than last year while sales volumes are significantly lower than last year,” he said, adding that there was more volatility with resales than new homes.

Stating that “it is mainly the wealthy who are involved in the market at the moment” and that “most ordinary buyers are overpriced”, the Cromford report gave a grim assessment of the current housing market in the valley.

“The past two months have been dismal for the Greater Phoenix housing market, with demand declining sharply and supply increasing at one of the fastest rates we have ever seen,” he said there. at two weeks. “Either trend would have been negative, but with the two coming together, we had a very cold wind blowing through the market.

“For many weeks, we have been looking for a convincing sign of an easing in one or both of these trends,” he continued. “We couldn’t find any. Instead, over the past week, the situation has worsened considerably, at least from the seller’s perspective. And it’s worse from a demand and supply perspective.

He observed last week that the market here “broke so hard it skidded down the road” because demand fell sharply as listings soared.

Realtor.com, an affiliate of the National Association of Realtors, said, “Affordability will remain a challenge for anyone looking to buy in today’s market as mortgage rates and home prices are not expected to drop this year; fortunately, they are not expected to grow as quickly or significantly as they did earlier this year.

“A big positive is that the number of homes for sale is likely to increase over the year, which means more options for buyers,” he continued.

The Cromford Report based its predictions of the Phoenix Metro market trend on a variety of data that it uses to compile the Cromford Market Index. The numbers for each of the Valley’s 17 major submarkets indicate how close each community is to a balanced market, with numbers above 100 indicating a seller’s market and numbers below 100 favoring buyers.

For all of 2021 and the first three months of this year, its CMI has been showing numbers in excess of 500 at times – indicating markets have tilted sharply to the sellers as supply has narrowed.

But the latest CMI shows a radically different picture, with those numbers dropping between 31% and 42% from the previous month in 16 municipalities across the valley.

For Queen Creek, the June 2021 Cromford Report listed the city’s CMI at 398. Last week, it listed Queen Creek’s index at 107.

Gilbert fell from 490 in July 2021 to 137 while Mesa fell from 433 a year ago to 161.

The Cromford report noted that a wave of panic among people trying to sell their homes before losing any advantage in the market seems to be setting in.

“The brightest sign is that the number of new registrations over the past seven days is down from the extreme high of the previous week,” he said on June 30. “At some point, the stampede of vendors might run out of new vendors. That’s not happening yet, but at least the rate at which vendors join the stampede is slowing.”

Yet days earlier he also said, “More homes are coming up for sale than at any time since 2011.”

But he added: ‘We are not seeing forced sales, as we experienced during the wave of lockdowns from 2007 to 2011. These are people who choose to sell because they fear lower prices houses. This fear is likely to be self-fulfilling. When so many people try to get to the exit door before everyone else, people get hurt.

“We don’t claim to know how much prices will fall in numerical or percentage terms, but the latest data suggests that it’s already impossible for house prices to go up under current market conditions,” he said. . “As people are increasingly concerned about disposing of their real estate assets, the price cuts are growing and multiplying. The top and bottom of the market are the least affected, but the mid-range, where the vast majority of trades occur, is seeing a big freeze.

“When a buyer’s strike and a seller’s scramble happen at the same time, the market stalls in midair. A price correction becomes inevitable. The Federal Reserve has said it wants to see a “housing market reset” and it seems increasingly likely that its wish will come true.”

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