The Cromford Report – Daily Observations May 2018

    May 1 – The contract ratio compares the number of listings under contract with the number of listings active with no contract. It tells us how hot the market is for any chosen sector. It tends to be lower for higher priced segments where there is always a good supply of active listings. Rather than compare with a standard value, it makes sense to compare segment with its long term average and maximum values. This way we can see how hot the segment is compared with its history.

    In the table below we are studying single-family homes in Greater Phoenix by price range:

    Price Range Contract Ratio May 1, 2018 Long Term Average Max Last Time at This Level Comments
    Under $100K 65.1 146.7 800.3 Feb 2018
    $100K – $125K 153.8 136.9 518.3 Jun 2017
    $125K – $150K 170.0 117.1 325.1 Apr 2018
    $150K – $175K 275.5 101.7 275.5 never record high
    $175K – $200K 234.2 83.1 234.2 never record high
    $200K – $225K 167.5 66.4 189.4 June 2012
    $225K – $250K 131.5 58.6 146.4 June 2012
    $250K – $275K 117.8 56.1 124.5 April 2018 record high last month
    $275K – $300K 105.1 49.3 113.3 June 2012
    $300K – $350K 93.5 43.6 95.1 June 2012
    $350K – $400K 74.3 37.9 90.2 May 2013
    $400K – $500K 69.1 32.3 75.7 June 2012
    $500K – $600K 53.4 26.3 60.5 May 2012
    $600K – $800K 42.7 22.2 51.9 June 2013
    $800K – $1M 28.9 16.9 33.6 May 2013
    $1M – $1.5M 27.9 14.4 30.0 June 2012
    $1.5M – $2M 14.0 11.7 21.9 April 2018 record high was June 2013
    $2M – $3M 15.4 8.1 15.4 never record high
    Over $3M 9.9 5.1 10.0 June 2015


    • Under $150K, the fire is going out for lack of fuel. There are simply too few listings for it to function as a normal market.
    • Between $150K and $200K we have just set new records for the contract ratio (which has only been measured since October 2006). This market is extremely hot, but is in danger of running out of fuel before too long.
    • Between $200K and $350K the market is very hot, but not quite as frenzied as the summer of 2012. However the range $250K to $275K did set a new record last month.
    • Between $350K and $1.5M the market is much hotter than average but not yet close to breaking record levels set in 2012 or 2013.
    • The range between $1.5M and $2M is the coolest but is still well above average. Not in sight of its record set in 2013
    • The range between $2M and $3M has not been this hot since we started measuring contract ratios in 2006. It is unusual that its contract ratio exceeds that for $1.5M to $2M.
    • The range over $3M is very hot and very close to its all time record.

    The supply over $1M remains adequate, but the number of homes going under contract is very strong.

    Contract ratio is a seasonal measurement so we expect it to peak in May or June for each year.



    © 2018 Cromford Associates LLC

    The data used to create the Cromford® Report is obtained from public records and obtained under license from the Arizona Regional Multiple Listing Service, Inc (ARMLS). Cromford Associates LLC and ARMLS expressly disclaim and make no representations or warranties of any kind, whether express, implied or statutory, as to the accuracy of the data used or the merchantability or fitness for any particular purpose.


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