February 9 - In true Phoenix tradition, the balanced market did not last very long - from October 27 to February 8 to be precise. We are now in a confirmed buyer's market with the Cromford® Market Index dropping below 90. Demand is weak with the Cromford® Demand Index at 78.7, its lowest level since May 2008. Supply is not high, but it is growing fast and the Cromford® Supply Index stands at 87.7, its highest level since July 2011. The deterioration in market conditions for sellers is across the board. No geographic area or price range is improving. However some sectors are much more favorable to sellers than others. In general the luxury market and the active adult areas are more favorable for sellers than the rest of the market. In the majority of sectors, prices are now under downward pressure, although they have not responded much yet due to residual seller optimism. However, if current market conditions prevail we are likely to see lower sales prices in many of these areas before too long. (Supporting graphs below)
Personally, I think that the market conditions are a reflection of the current economy. Everyone is uncertain about what is going to happen this year with health care, there still seems to be more jobs being lost than created, lots of people have gone onto government programs in the past 4 years and don't plan on going off of them, and the people who are working are paying more in taxes.
Until we get some stability in the economy, we are likely to see a leveling of prices in all areas.
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