What does this mean? – It means that the supply of active listings for sale is now slightly lower than in a normal market. So the “glut of homes on the market” that we keep reading about in the news no longer exists.
If the index falls below 90 sometime in the next several weeks then we can conclude that supply has fallen well below normal and we will then have a shortage of homes on the market, That is not unlikely given how quickly supply has fallen since November 2010. The drop from 110 to below 100 took less than 6 weeks.
If we include Active with Contingent Contract (AWC) listings in our counts then the following changes have occurred since November 21:
All Areas & Types – down 30.1%
Greater Phoenix, all types – down 31.1%
Greater Phoenix, single family detached – down 31.4%
Greater Phoenix, townhouse – down 31.7%
Greater Phoenix, apartment style – down 32.2%
Greater Phoenix, mobile home – down 18.0%
The figures are even more startling if we exclude the AWC listings:
All Areas & Types – down 39.2%
Greater Phoenix, all types – down 40.7%
Greater Phoenix, single family detached – down 41.8%
Greater Phoenix, townhouse – down 41.7%
Greater Phoenix, apartment style – down 37.4%
Greater Phoenix, mobile home – down 20.2%
Market pricing has not yet reacted to this change in the balance between supply and demand. Pricing is always a trailing signal.
Source: The Cromford Report May 30, 2011
Stephanie Weiss Moves (480) 273.7472