Cromford Report – Daily Observations – June 2020 June 30 - The latest S&P Case-Shiller Home Price Index numbers were published today. They cover home sales during the period February to April 2020.

For most of the 20 metropolitan areas prices accelerated compared with previous month.

Comparing with the previous month's series we see the following changes:

1. Minneapolis +1.90%2. Cleveland +1.60%3. Seattle +1.44%4. Phoenix +1.39%5. Boston +1.32%6. San Diego +1.19%7. Charlotte +1/16%8. Chicago +1.11%9. Denver +1.03%10. Tampa +0.95%11. Washington +0.92%12. Las Vegas +0.85%13. Atlanta +0.82%14. Los Angeles +0.73%15. Dallas +0.67%16. San Francisco +0.66%17. Miami +0.62%18. Portland +0.59%19. New York +0.40%20. Detroit - data not available

The national average was +1.10% so Phoenix increased at higher than the national average, and jumped from 13th to 4th place compared with last month..

The year over year comparisons are below:

1. Phoenix 8.8%2. Seattle 7.3%3. Minneapolis 6.4%4. Cleveland 6.0%5. San Diego 5.8%6. Tampa 5.8%7. Charlotte 5.6%8. Las Vegas 4.7%9. Atlanta 4.5%10. Portland 4.3%11. Boston 4.3%12. Los Angeles 4.1%13. Denver 4.0%14. Miami 3.9%15. Washington 3.8%16. San Francisco 2.8%17. Dallas 2.8%18. New York 2.5%19. Chicago 1.4%20. Detroit - data not available

The national average was 4.73%, up from 4.35% last month. Phoenix remained in the top spot yet again and now has a gap of 1.5% over the number 2 city - Seattle. Minneapolis is showing strength too.

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June 29 - The Cromford® Market Index continues to hurtle skywards, accelerating over the last 7 days:

It has risen 10% in the last week alone, from 205.3 to 226.4 and looks very likely to surpass the March 19 peak of 241.1. However, nothing is guaranteed in such a volatile market.

Active listings without a contract are still falling, but the pace of decline has eased a little from 8% to 4% a week over the last 2 weeks.

Listings under contract are still rising, but the rate of increase is falling, from 7% to 2% a week over the last 2 weeks. The number of closed sales is rising, but this is a trailing indicator compared with the under contract counts.

The above trends should start to slow the rise of the CMI somewhat over the next month, but how much we will have to wait and see.

Sales pricing is experiencing strong upward pressure, especially now that the luxury market is building volume again after a sudden collapse in April.

June 28 - According to the Census Bureau there were 1,757 single-family permits issued in Maricopa and Pinal counties during May. There were 2,179 in May 2019, so this represents a drop of 19%. Year to date at the end of May we have seen 10,916 single-family permits, up from 9,940 last year, so the recent slow down has not eliminated this year's advantage gained during the first quarter.

There were also permits for 583 multi-family units, which compares with 1,228 in May 2019, giving us a larger 53% decline. However multi-family permits were very strong during the first quarter of 2020, so the year to date number still looks healthy at 5,609. This is up from 4,118 at the end of May 2019.

June 27 - Real estate agents make most of their revenue from commissions, based off the closing sales price. This makes dollar volume one of the most important indicators of how agents are doing. It is also crucial for title companies and mortgage lenders.

However, it is a trailing indicator, telling us how the market has done, not where it is going. Here is the weekly chart for the last 2 years.

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We can see a big hole in revenues between April and June 2020, but that hole is now closed. We can expect dollar volume to exceed 2019 levels for a while as listings under contract are 14.6% higher than last year and average contract prices are up 4.5% and getting stronger.

So although revenues took a hit during the second quarter, the third quarter could see them recover to go as much as 20% higher than last year. This is independent of how bad the situation gets with COVID-19 since these short-term home closings are already contracted and we are unlikely to see cancellations any higher than in 2019.

The longer term effects of the pandemic are not likely to be seen until forbearance programs are over and evictions and foreclosures are restarted in volume. Any impact from these are likely to be felt in 2021 and beyond. In the short term, there is plenty of additional business happening between July and September and it might be advisable to add to our rainy day funds during these months to give us more financial security during the next downturn.

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June 26 - We have added another popular chart that compares the Cromford® Demand Index with the Cromford® Supply Index. You can find the latest version here.

When the green line is higher than the brown line, demand exceeds supply. The size of the gap gives you a good impression of the imbalance.

The opposite situation is a buyer's market where supply exceeds demand. This was seen between 2006 and 2009 and briefly in 2010 and 2014.

The light gray line at 100 represents the normal level of both supply and demand. You can see that we have suffered from a lack of supply ever since 2011.

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June 25 - Once again, here is our table of Cromford® Market Index values for the single-family markets in the 17 largest cities

We are running out of adjectives to describe the current state of the market and the speed with which it is changing. Calling it a feeding frenzy does not do it justice.

Buyers outnumber sellers by a colossal margin across the majority of the market. The main exception is the luxury market, though that is now moving quickly in the seller's direction. The 55+ markets are also less skewed in favor of sellers, though Sun Lakes is an exception to that rule.

The lowest percentage increase in CMI was 25% in Cave Creek, the highest low we have ever seen. The average was a rise of 48.7%, higher than the already astounding 36.6% we recorded last week. Avondale's CMI increased 86% in one month, another all time record.

In many cities the supply of active listings without a contract is dwindling to levels not seen since the bubble year of 2005. For example:

• Avondale - 35 • El Mirage - 8 • Glendale - 147 • Maricopa - 71 • Sun Lakes - 32 • Tolleson - 20

How long before one of these cities actually runs out of homes for sale on the MLS? Some of the tiny towns have already reached that point (e.g. Aguila, Cordes Junction, Gila Bend, Mobile, Palo Verde, Spring Valley, Toltec and Valley Farms). Gila Bend, Stanfield, Cordes Lakes and Guadalupe have just one active listing each.

June 24 - The COVID-19 situation continues to deteriorate in the USA and the world as a whole, though many countries that were hit hard in March are now seeing significant reductions in active cases.

Globally, new cases are increasing at a rate of 13% per week, reaching 1,125,386 per week as of June 24, a record high. A month ago the rate was 14% per week and the total was 695,189 per week. The global daily increase in the number of weekly new cases is 2.3%, the highest percentage since April 10. When this number is positive, the situation is deteriorating. It went negative for a short period between April 15 and April 23 and also briefly between May 2 and May 4. Over the last week the global daily rate has deteriorated from 1.1% to 2.3%, indicating renewed acceleration.

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Most of the deterioration globally is due to worsening rates of new infection in the Americas and the Indian sub-continent. These areas currently account for 74% of the daily new infections in the world. The USA alone accounts for 22%, an alarming number given that only 4.3% of the world population lives in the USA. Brazil is an even more obvious hot spot with 24% of the daily new cases and only 2.7% of the world's population.

Within the USA, 81% of the population lives in states where COVID-19 infection rates are accelerating. This was only 46% as recently as June 13, so the situation has deteriorated quickly over the last 11 days.

The fastest growth in weekly new cases (over 5% increase per day) are currently in the following:

1. Idaho 15.3% per day 2. Montana 9.5% per day 3. Oklahoma 8.7% per day 4. Texas 8.3% per day 5. Florida 7.9% per day 6. Washington 7.5% per day 7. Arizona 7.1% per day 8. Kansas 6.6% per day 9. Georgia 6.5% per day 10. Michigan 6.3% per day 11. Ohio 6.3% per day 12. Missouri 6.1% per day 13. South Carolina 5.8% per day 14. Nevada 5.8% per day 15. Hawaii 5.5% per day 16. West Virginia 5.2% per day 17. California 5.1% per day

There are still a few states that are seeing significant daily reductions. Those falling more than 3% per day are:

1. Connecticut -10.3% per day 2. Maryland -4.9% per day 3. Massachusetts -4.0% per day 4. New Hampshire -3.8% per day 5. Indiana -3.1% per day

This list has been getting shorter over the last 2 weeks. New York has gone from -6.1% last week to +3.7% today, a troubling development.

The USA as a whole is seeing weekly new cases increase at 4.4% per day, the worst reading since April 9.

We are probably no more than a third of the way through the pandemic and all forecasts of the future of the housing market should bear that in mind. We are now in inning 3.

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June 23 - The chart below plots average price per sq. ft. for the last 2 months across all areas and types.

We can see how the average drifted lower until late May but has reversed course and is now headed higher again.

The green line - pending list price per sq. ft. is the leading indicator. The other 2 lines tend to follow a similar trend to the green line, but about 30 days later. The chart above is therefore showing a strong signal about higher sales pricing during July.

Why are prices rising:

• the high end luxury market is recovering so that properties with very high average $/SF are starting to appear after a 2 month gap in April and May

• the few sellers who panicked at the start of the pandemic and sold without regard to getting the highest prices are now cleared from the market

• supply continues to fall, reaching unusually low levels, although new listings are showing signs of recovery over the last week.

• demand is rising with new buyers arriving in volume

June 22 - Our good friend Butch Leiber has created a YouTube channel and a series of videos that help explain some of the basics of the Cromford® Report. You can find this channel here:

https://www.youtube.com/channel/UCDYrjBbw4GnEeYRlHdbMMtQ

At the moment there are 3 useful videos here:

1. What Is the Cromford® Report? 2. Sharing Charts and Watermarking 3. Sharing Charts with the Snipping Tool

These will be particularly useful for new subscribers who are just starting with Cromford® Report for the first time. However if you use the Cromford® Report but don't use watermarking, then I can recommend video on that subject.

If we get a good response to this channel we hope to see more videos added over time.

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June 21 - Listings under contract continue to accumulate as buyers sign up for the diminishing supply of homes for sale:

Note how 2020 followed a very similar track to 2018 until mid-March. Contract activity fell sharply but stabilized during April and then recovered all the lost ground and more over May and June.

It is very unusual for us to see almost 14,000 listings under contract at this point in the year. It did happened between 2009 and 2013 but that was caused by the large number of short sales that stayed under contract for many months awaiting lender approval.

June 20 - The COVID-19 pandemic is worsening in Arizona and in the USA as a whole. A week ago we wrote that 46% of the population of the USA lived in states where the number of new cases was accelerating. That percentage reached 57% by June 17, 60% on June 18 and was 63% on June 19. This is not an encouraging trend. The number of new cases is still falling in the states that were hit hardest back in March and April (such as New York, New Jersey, Massachusetts, Pennsylvania, Illinois, Michigan). However most of the West and South of the country is experiencing exponential growth in new cases. The worst affected states are:

1. Texas - 4,497 new cases per day, weekly growth in total cases 25% 2. Florida - 3,822 new cases per day, weekly growth in total cases 26% 3. California - 3,608 new cases per day, weekly growth in total cases 16% 4. Arizona - 3,246 new cases per day, weekly growth rate in total cases 42%

Since Arizona's population (7 million) is so much smaller than the other 3 states in this list (90 million between them), the daily new case count is a serious concern. This is not just a result of higher testing volume; this surge in new infections is reflected in an increase in serious cases requiring hospitalization and the occupation of ICU beds which are starting to approach maximum capacity. The weekly total case growth of 42% is the highest in the country with South Carolina at 32% standing at number two. Arizona's most encouraging day in retrospect was May 26 when the growth rate was only 15%. Unfortunately, the growth rate has been worsening steadily since May 27.

The other states that are experiencing accelerating new cases are: Alabama, Arkansas, Colorado, Delaware, Georgia, Hawaii, Idaho, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Nevada, North Carolina, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Utah, Washington, West Virginia and Wyoming.

The numbers say this is not really a second wave, it is the first wave continuing to spread geographically.

Our conclusion is that getting back to normal housing activity is probably still many quarters away.

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June 19 - Once again, here is our table of Cromford® Market Index values for the single-family markets in the 17 largest cities

Like last week, all 17 cities have moved in favor of sellers over the prior month, but this time they are moving at the fastest rate we have ever witnessed.

A surge in demand coupled with an unusually weak supply of new listings is creating an almost surreal market. In many segments, buyers outnumber sellers many times over. In this environment things can get very frenetic and stressful, decision time is often very short and mistakes can result. Buying a home is one of the biggest decisions a buyer will make so I hope they will take time out to think carefully and not get caught up in the frenzy.

As recently as May 21, all 17 cities were moving in favor of buyers, so the change in direction has been sudden and violent. This is not normal.

The higher end of the market was lagging behind significantly, but is now joining in too. Paradise Valley's CMI is up 26% and Scottsdale's up 25% over the last month.

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June 18 - I apologize for making the same point as on June 16, but the situation with supply is extraordinary and they say a picture is worth a thousand words.

Here we plotted single-family detached listings under $500,000. UCB and CCBS listings are excluded.

In the last 2 months the count has dropped from 6,653 to 3,496 with pace accelerating during that last 4 weeks. That is a decline of over 47% and so far no end is in sight for this trend.

June 16 - At the moment the supply of homes for sale is collapsing, making things extraordinarily tough for buyers who must compete with each other for the few homes offered for sale. At the start of the pandemic, we saw a moderate bump in supply as a few investors sold in a panic, particularly those who owned vacation rentals who suddenly lost almost all their bookings. But now we are seeing a chronic shortage of entry-level and mid-range homes turn into a feeding frenzy for the few properties that remain on sale. Things are much more normal at the upper reaches of the market where few investors operate and iBuyers are not interested, but even here supply is below normal levels.

The situation has led to new record lows being set for the number of single-family homes for sale without an existing contract. For example the city of Maricopa has only 93 active listings compared with an average over the last 12 years of 428. In contrast it has 289 listings under contract (Pending, Active-UCB, Active-CCBS). The contract ratio is 311, consistent with an extremely unbalanced market where demand far exceeds supply. Normal contract ratio readings rarely exceed 150.

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Other locations where extreme supply shortages prevail are shown below:

Location Active (excluding UCB and CCBS)

Historical Average

Contract Ratio

Phoenix 1,285 4,573 183 Mesa 421 1,625 230 Avondale 43 359 426 Queen Creek 354 980 209 Surprise 305 929 184 Gilbert 255 1,137 286 Glendale 176 932 311 Chandler 237 1,001 235 El Mirage 12 67 775 Laveen 19 147 553 Youngtown 7 13 343 Florence 59 143 298 Tolleson 30 95 270 Waddell 30 66 237 Coolidge 30 57 230 Arizona City 14 64 207 Casa Grande 126 258 199 Buckeye 240 428 190

The above list of places accounts for a large proportion of the Greater Phoenix area and all have unusually high contract ratios. The only areas with moderate contract ratios are those that are far outside the center (e.g. Morristown, Wickenburg, Tonopah, Eloy, Congress and Superior), or have a predominance of more expensive homes (Paradise Valley, Carefree, Scottsdale, Fountain Hills, Rio Verde and Cave Creek). Paradise Valley has a contract ratio of 31, Scottsdale 67 and Wickenburg has 33.

June 14 - Dramatic things are going on in the lending world:

• April 2020 saw the highest monthly pre-payment rate in 16 year - up 23% from March and up 136% over April 2019 - largely due to the very low interest rates

• April 2020 saw the largest ever single-month jump in delinquency - up over 90% - largely due to borrowers requesting forbearance

• 1.6 million homes loans became past due during April 2020 • Foreclosure moratoriums brought foreclosure starts to a new low of 7,400 - down 80% from April 2019 • During April 2020 Arizona home loans that are non-current (delinquent or already in foreclosure) jumped

91% to 5.2% of all loans (compared with April 2019)

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June 13 - New cases of COVID-19 are accelerating in the following states:

State New Cases This Week

New Cases Last Week Change Population

Infected Alabama 4,558 2,394 +90% 1 in 199 Alaska 118 102 +16% 1 in 1,119 Arkansas 2,994 2,088 +43% 1 in 250 Arizona 9,007 6,196 +45% 1 in 211 California 21,320 19,064 +12% 1 in 263 Florida 10,838 7,334 +48% 1 in 292 Georgia 5,442 5,028 +8% 1 in 187 Hawaii 50 22 +127% 1 in 1,958 Louisiana 3,797 2,905 +31% 1 in 100 Mississippi 2,314 1,805 +28% 1 in 154 North Carolina 8,127 6,924 +17% 1 in 245 Nevada 1,486 965 +54% 1 in 281 Oklahoma 1,014 641 +58% 1 in 490 Oregon 873 477 +83% 1 in 762 South Carolina 4,039 2,522 +60% 1 in 287 South Dakota 466 407 +14% 1 in 152 Texas 13,074 11,413 +15% 1 in 330 Vermont 79 69 +14% 1 in 555 Wyoming 111 41 +171% 1 in 551

This is a relatively short list (19 states) but contains over 46% of the population of the USA largely because California, Texas and Florida are among them. This should concern us because it shows that the pandemic is far from over and "getting back to normal" is not likely in the short term.

June 11 - Once again, here is our table of Cromford® Market Index values for the single-family markets in the 17 largest cities

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The speed and scale of the turnaround in the market is unprecedented. All 17 cities are now moving in favor of sellers over the prior month, when as recently as May 21, all 17 cities were moving in favor of buyers. In addition, the majority of cities are moving violently in favor of sellers with 12 of them increasing their CMI by more than 20%. Gilbert is almost in that group while Buckeye lags behind because it has far more supply than most parts of the valley.

The higher end of the market lags behind significantly, but is now starting to catch up. Paradise Valley flirted with a buyer's market for a week or two, but is now above 100 and in a balanced market and accelerating higher. Cave Creek, Fountain Hills and especially Scottsdale have started stronger moves in favor of sellers after a weak couple of months.

The average monthly increase in the CMI is 22.4%, up from 8.1% last week.

Anyone who thinks home values are likely to fall in this environment has got hold of the wrong end of the stick.

However we have already seen how suddenly things can change in either direction, and volatility in sentiment means we need to watch the crucial indicators even more closely than normal.

June 10 - Based on affidavits of value filed during May we have collected the following statistics on iBuyer activity:

Opendoor OfferPad Zillow Knock All iBuyers Combined Homes Purchased in May 2020 23 27 1 2 53 Homes Purchased in May 2019 326 99 101 8 534 Annual Change in Purchases -93% -73% -99% -75% -90% Homes Sold in May 2020 147 84 28 6 265 Homes Sold in May 2019 322 124 119 0 565 Annual Change in Sales -54% -32% -76% -53% Median Purchase Price in May 2020 $283,800 $263,500 $336,600 $343,400 $278,700 Median Purchase Price in May 2019 $242,650 $233,356 $290,000 $326,000 $246,014 Median Sale Price in May 2020 $265,000 $270,050 $269,950 $399,668 $269,900 Median Sale Price in May 2019 $249,000 $241,500 $300.000 $255,000 Homes in Inventory at the End of May 2020 353 117 37 15 522 Homes in Inventory at the End of May 2019 961 281 380 10 1,649 Annual Change in Inventory -63% -58% -90% +50% -68%

The COVID-19 pandemic has had a much larger impact on the iBuyer operations than the rest of the market. While overall re-sales during May dropped 40% compared with 2019, and new home closings increased 1%, iBuyer purchases fell 90% while sales declined 53%.

Total iBuyer inventory has fallen 68% since this time last year, with Zillow down 90% and OfferPad down the least at 58%. We note that in terms of purchase transactions, OfferPad was the market leader in May 2020, although we expect Opendoor to regain that title during June.

In the current frenzied market, it is not uncommon for a home in the iBuyers' target price range to receive more than 20 offers within a few days of listing. Thus the iBuyers are finding it much harder to make new purchases than sell what they already have. This lack of inventory means their market share is down substantially from last year and their turnover is also lower than a year ago. This seller's market should make it easier to achieve a good gross margin, but as an example of how things can sometimes go wrong, I refer you to ARMLS listing 5923382. Purchased by Zillow in April 2019 for $490,000 and listed for $502,900, it took 13 price reductions before it eventually sold in February 2090 for $421,000. Ouch.

The iBuyers are off to a fairly slow start to June but not as slow as May, and we would expect to see some recovery in volumes during this month. We can already see that they are having to target higher price ranges in order to grow their business, as homes below $250,000 become increasingly hard to find.

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June 9 - We have added the long term chart that shows how the Cromford Market Index is a reliable indicator of future appreciation.

You will be able to retrieve the latest version of this chart from the menu at the right: Cromford Market Index - Versus Appreciation

June 8 - After a deep slump during March and April, listings under contract are surging back and have now reach a record high for the year:

The speed of the recovery in demand is quite astonishing and is not currently reflected in sales counts or sales prices, but the sheer volume of homes going under contract will inevitably push the sales rates and sales prices higher over the next 4 to 6 weeks.

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June 6 - Today we are sharing a couple of charts created by Tina Tamboer to compare the monthly payment for a typical 1,500 to 2,000 sq. ft. home over time.

We see that the ideal time to buy a home was between March 2009 and late 2012. Because of the current low interest rates the typical house is no more expensive to own than it was 15 years ago in 2005. It is a lot cheaper than in mid 2006.

Focusing on the more recent years:

Although home prices have increased, monthly payments have gone down over the last 18 months.

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June 5 - We have never seen supply so low in the City of Maricopa. There are just 113 active listings without a contract. This time last year there were 364. The count has dropped 42% in the past 4 weeks. Amazing.

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June 4 - Once again, here is our table of Cromford® Market Index values for the single-family markets in the 17 largest cities

The turnaround in the direction of the market is enough to make your head spin. We now have 13 out of 17 cities improving for sellers, most of them at a very fast rate.

We note that the 4 cities that have not improved for sellers over the past month are all higher priced parts of the valley. All four of them have started improving for sellers over the past week or two. Paradise Valley remains in a balanced market but all the others are seller's markets.

Among the smaller cities we do have one example of a mild buyer's market - Sun City. The age restricted market has been hardest hit as a large percentage of their population is vulnerable to COVID-19 and many are probably sheltering in place.

The general market below $600,000 is now booming and supply is dropping very fast.

June 3 - We have the affidavit counts for Maricopa County for the month of May. Pinal will take a few more days to complete.

The total number of closed transactions dropped 35% from 12,041 in May 2019 to 7,823 in May 2020. This includes single family, condos and townhouses. All the pain was felt in the re-sale sector with closings down 40%. The new home sector actually rose 1% to 1,552. Typically, contracts for new homes take much longer to close than for re-sales. If there has been a lull in signed contracts or a rise in cancellations for new homes, that will usually not show up in closed transaction counts until several months later.

The overall median sales price was $315,000, the same as last month and up 9.8% from a year ago. The new home median was up only 0.9% to $368,310, while the re-sale median was up 8.7% to $299,000.

With new homes rising to a market share of almost 20%, the highest since 2008. This change in the mix supports a higher median sale price. New homes sell for higher prices than re-sales, but they are also quite a bit larger than re-sales too. The overall average price per sq. ft. is quite similar at the moment for both re-sale and new homes. This is because most new homes are being constructed on the outer fringes of the valley where prices are lower. If you compare new homes with resales in the same small geographic area you usually find a clear price premium for new homes. This increases with price until the premium reaches 25% to 35% at the high end of the market.

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June 2 - The housing market in Greater Phoenix is swinging strongly in favor of sellers again as illustrated in the six month Cromford® Market Index chart below:

Not only have listings being going under contract more quickly, the supply of new listings is much weaker than normal and many segments of the market are looking extremely short of homes for sale. This puts buyers into competition with each other leading to bidding wars.

Here are a few examples of ZIP codes with very low numbers of active single-family listings, excluding UCB and CCBS, compared to last month:

1. Aguila 85320 - nothing for sale (normally we see an average of 10 listings) 2. Arlington 85322 - 1 listing (normally we see an average of 4 to 5 listings) 3. Peoria 85381 - down 57% since last month to 18 (50 is typical) 4. El Mirage 85335 - down 56% since last month to 25 5. Youngtown 85363 - down 56% to 4 6. Phoenix 85035 - down 50% 7. Mesa 85215 - down 49% 8. Phoenix 85045 - down 49% 9. Phoenix 85027 - down 48% 10. Mesa 85202 - down 48% 11. Avondale 85392 - down 47% 12. Mesa 85204 - down 46% 13. Glendale 85303 - down 45% 14. San Tan Valley 85143 - down 44% 15. Phoenix 85003 - down 43% 16. Peoria 85345 - down 42% 17. Gilbert 85233 -down 42% 18. Mesa 85203 - down 41% 19. Phoenix 85033 - down 38% 20. Tempe 85282 - down 38%

June 1 - In the Cromford® Public section of this site we have a Tableau chart that analyses the intended use stated on the affidavit of value filed alongside the deed. For April 2020, this shows the most significant changes we have seen since we created the chart

Buyers intending to use their purchase as a primary residence rose from 72% in Q1 to 82% of purchases in April. Every other type of intended use fall sharply:

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• Investor purchases dropped from 11% to 9% • Second home purchases dropped from 13% to 8% • iBuyer purchases dropped from 3% to less than 1%

The last time we saw such a low percentage of purchases going to iBuyers was in Q1 2016. Their peak was Q1 2019 when they hit 4.6% of transactions. iBuyers were making few offers (none in some cases) during April, so the closed purchases transactions by iBuyers will be very low when we update this chart to include May as well. We do not have all the affidavits counted yet for May, but the combined count is currently 42 acquisitions, which is down 92% compared with the 549 purchased in May 2019. So we conclude that the sub- market most affected by COVID-19 is the iBuyer segment.

New home closings have not been significantly impacted by the pandemic. In fact the April 2020 closings totalled 1,821, up 4% from April 2019. Investor flips were down 37% while distressed sales were down 64%. Normal MLS closings were down 28%. The overall number of closed transactions in April 2020 was 9,236 which is down 25% from April 2019. Dollar volume was down only 18%, thanks to the out-sized contribution from newly constructed homes. The age-restricted segment suffered more than average with dollar volume dropping 30% to the lowest level since April 2015.

© 2 0 2 0 C r o m f o r d A s s o c i a t e s L L C

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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