A couple of weeks ago we commented that the rate of decline for the Cromford® Market Index was less than the rate of increase during the first quarter.
This is no longer the case, as can be seen from the daily chart below:
The CMI is now dropping quickly. The number of active listings is increasing by roughly 300 per week. The number of showings is in decline and the number of contracts getting signed is getting smaller as each week goes by.
All this makes sense. When prices leap by over 35%, demand is suppressed and supply stimulated.
The obvious question is how far this trend will go before it levels out. The honest answer is that no-one knows. Buyers are more cautious now than they were in 2005. Sellers' normal first reaction will be denial. Some will blame their agent. These sellers will probably be complaining that they are not getting the viewings and offers their house deserves. This is because they have so quickly become accustomed to a frenzied market. They will now need to get re-adjusted. The market still favors sellers, but buyers will start to gain a little more respect.
400 is still a very high CMI, but the change in the market that we first detected and reported in mid-March is now very palpable.
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
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