February 25 - Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities (CMI at 100 is a Blanaced Market)
We have 11 cities moving in favor of sellers and 6 moving in favor of buyers. The average change in CMI over the past month is +3.5%, down from +5.7% last week.
Avondale is the first large city to exceed 1,000, although El Mirage was the first among all the cities we measure.
Buying a home is not only desperately stressful, it is getting a lot more expensive. So we should expect demand to come down, and it has started to decline in many areas. It is hard to notice any decline in demand when supply continues to fall. Most sellers cannot tell much practical difference between receiving 30 offers and receiving 25 offers. It is still more than enough demand to keep prices rising quickly.
Eventually prices will rise so much that demand starts to drop below normal. This may possibly give supply a chance to expand from the extreme lows it keeps hitting week after week. We will have to wait and see - there is very little sign of that in any of the current numbers.
Every single large city is over 330. This is well over the CMI for the entire market that we saw in April 2005 at the peak of the housing bubble. That high was 312.9, which now looks rather modest compared with the 504.6 we are measuring today. In April 2005, we observed the first signs that the bubble was about to go pop as increasing numbers of mostly vacant homes hit the market from May 2005 onwards, the result of canny speculators timing their exit from the market well before pricing peaked the following year. No such pressure relief is looking likely in 2021. But it pays to watch the numbers every day for any change in conditions.
- Michael Orr, Cromford Report