More evidence of our changing real estate market:
The Cromford Report has defined Contract Ratio as follows:
Contract Ratio indicates how "hot" a market it. It specifically measures the number of active sales contracts under negotiation relative to the supply of active listings. It is defined as 100 x (Pending Listings + Active Listings with Contingent Offer) / Active Listings Without a Contingent Offer. The higher the number the greater the buying activity relative to supply.
If this number rises then it is a sign of growing contract activity and a positive signal for sellers. Conversely a falling number is a sign of a weakening market – either supply of active listings is increasing or contract activity is slowing, or both. In a balanced market the value of the Contract Ratio is about 30. When it lies below 20 the market can be considered "slow" or a "buyer’s market". Above 40 can be considered a "seller’s market" and when it moves above 100 we regard this as evidence of a "buying frenzy".
As you can see, in this chart, the Seller’s market ended in November 2005, and the Phoenix area has re-entered this realm as of March 2009. Decreased inventory and increased investor and first-time buyer demand is fuelling this surge.
{ 2 comments… read them below or add one }
I was just ‘griping’ to an agent I am in a cross-sale with that we went from one extreme to the other with ‘no middle’ to enjoy or savor after a very couple of hard years.
Apparently I was wrong; as you chart indicates we had a whole ’2 months’ in the middle! LOL.
Thanks for the info.
Now that’s funny… and illuminating!