The Cromford Index™ is a set of market indicators that we use to measure the balance of supply and demand which that indicates the balance of the residential resale market. Values below 100 indicate a market that favors buyers. Values above 100 indicate a market that favors sellers. A value of 100 is equally balanced.
Right now- we are at the same market index as we were in 2004, BEFORE the insanity started in our local marketplace 9 years ago, which caused the bottom out of our market just 2 years later in 2007. It’s almost as if years 2005-2012 never happened with regards to pricing, rates, demand, etc…. We are back to being in a Traditional Marketplace again, with Short Sales and Foreclosures combined only comprising less than 1/5 of the available homes on the market to choose from.
What we’ve noticed with these charts is that the peak of the recent investor craze (which caused multiple offer bidding wars this past year and caused many buyers to give up even trying to purchase) was in 2012 primarily as by early Spring of 2013, it’s gotten easier and easier for buyers looking to purchase a home as the demand has dropped.
With the balance of supply and demand changing, we’ve also seen fluctuations in the interest rates that buyers could get on their mortgage loans. When rates were at insane never before seen lows (in the 3’s), we saw that help drive demand back up, which also helped bring values back up… as that happened and demand increased, we also saw rates start to climb again.
In the last 6 months, we’ve seen demand decrease as the rates increased so much so that this past week, the Feds announced they will continue to purchase 85 Billion dollars worth of bonds on a monthly basis which caused our rates to decrease again.
We’ve also seen a easing in the mortgage guidelines allowing folks in the “penalty box” ( they had a short sale, foreclosure, or bankruptcy) to buy again within a year or less versus 3-7 years and Programs like the “Home in 5” granting 5% of FREE $ to assist with down payments to make it easier for more buyers to return to the market sooner than later.
What does that mean for Buyers and Sellers today?
For Buyers: Rates are still at historic lows, in the 4’s makes purchasing more affordable than renting. Better selection of homes as the demand has recently fallen. Easing of guidelines to make it attainable to purchase a home again for people who didn’t think they could yet.
For Sellers: Sellers need to be realistic when selling their homes. They cannot expect multiple offers without pricing right and ensuring the home shows really well. Staging always helps to sell a home faster for higher dollar amount.
Whether you’ve been considering purchasing &/or Selling and need help of qualified experienced Realtors who care about their clients, give us a call, we are always happy to help with no obligation. We have several tools like our App provided by Academy Mortgage to make the task easier for our clients. 480-243-4242