Unlocking Opportunities: The Future of Real Estate

The Cromford Report has shared insights indicating a notable increase in market activity, likely due to lower mortgage rates encouraging indecisive buyers. This uptick, although unexpected for this season, reflects shifts in buyer sentiment.

As we review pricing trends for the period ending August 15, the average sales price per square foot (sales $/SF) across the ARMLS database stands at $281.34, a significant drop of 4.2% from July’s $293.64. While our forecasts anticipated a decline, the extent of this drop exceeded expectations, with the actual outcome falling outside our 90% confidence interval. This marks the third consecutive month of sales price decline, suggesting a disconnect between seller expectations and market conditions.

Sellers, having enjoyed favorable market conditions for an extended period, are now navigating a more balanced landscape. Certain areas, including Buckeye, Maricopa, Queen Creek, Surprise, and Goodyear, exhibit signs of a buyer’s market, but the overall market remains more balanced rather than distinctly favorable to buyers. Recent drops in mortgage interest rates indicate a potential upward trend in activity.

Pending listings as of August 15 reveal an average list price per square foot of $328.37, reflecting a 1.4% increase from July. Among these pending listings, 99.2% are classified as normal, with minimal distress sales represented by 0.2% in REOs and 0.7% in pre-foreclosures and short sales. The low foreclosure activity indicates that the decline in pricing is not driven by distress.

Looking ahead, our forecast for the average monthly sales $/SF on September 15 is $288.56, projecting a 3.2% increase from the August figure. We hold a 90% confidence that the actual sales price will fall within ± 2% of this midpoint, ranging from $282.79 to $294.39.

Overall, the past three months have seen a surprising drop in sales prices following an exceptionally strong April. However, this lull may be reaching its conclusion, with expectations of a price rebound in the near future. The high-end market has remained quiet during the peak months, yet its eventual resurgence is anticipated to affect overall sales price averages positively.