Housing Market FINALLY Slowing Down? The Cromford Report, Tina Tamboer
In this interview, host Jason Hartman talks with Tina Tamboer of the Cromford Report about the current state of the Greater Phoenix housing market. They explain how the market behaves differently below and above the $400,000 price point, noting that lower‑priced homes are seeing rising inventory due to weak demand caused by higher interest rates, while higher‑priced homes still have strong buyer interest but are experiencing a surge in new listings that pressure list prices. They discuss weekly price‑reduction trends, median reduction amounts for various price bands, and the growing days‑on‑market metric, which signals increasing seller pressure. The conversation covers the impact of rising rates on first‑time buyers, private‑landlord investors, and flip investors, and how these forces affect rental supply and rent growth. They define a “frenzy” as having more contracts than listings and show that the frenzy is fading, especially above $400k, indicating a shift toward a more balanced market. Foreclosure data is examined, revealing a sharp rise in pre‑foreclosure notices but very few actual foreclosures, suggesting limited distress. Tina frames the current environment as a “disruption” rather than a true correction, arguing that once rates eventually fall, any correction may be upward. They conclude with practical advice: buyers should focus on long‑term holds, sellers need to adjust expectations, and agents can access detailed, zip‑code‑specific market indices through the Cromford Report’s proprietary service.
Chapters
You know, in my opinion, a correction is after a disruption. So when you have a market that's going in a certain direction anyway, and somebody interrupts it, disrupts it, you could be like back in the 2009, it was the first time home buyer credit. Right. And pushed us into a little seller market. We were like, yay. And we all welcomed it. But it was very expensive. So you remember after the next election cycle, it did not carry through, so expired. And the correction happened after that disruption was done right there. And we went back to where we would have been anyway had it never happened. So the question today is, where is our market going anyway?
So, Tina, there really is quite a difference in the market depending on whether you're under $400,000 or over $400,000, right?
Yes.
Tell us about that.
So essentially what we're seeing is the under 400 market is seeing a rise in supply. However, it is because of a lack of demand. So the interest rates have had much more impact on this price point. Once you get over 400, however, you still have people that are in the game. Our demand is still high. These are just what's under contract waiting to close over the next four to six weeks. So as a result, what we're seeing is that the people over 400,000, that inventory has continued to rise at a very sharp rate. And that is because of new listings. So it's not because of demand. So those are two completely different scenarios. But what we're seeing is the first thing to respond is not a sale price. The first thing to respond is a list price or a seller expectation of price. So in response to the marketplace, we're looking at price changes per week in the three to four range. They are rising, but they are still very low, historically speaking. So they did go up 137% in nine weeks. Okay, so big dramatic number, but they were so low, it's not hard to reach that. Right.
137% of 20 listings is still only 45 listings.
Yeah, but pretty. As of week 22 for this year, $10,000 price reduction in this price range is actually pretty decent. And that's the median price reduction we're seeing.
Okay, so let me just make sure we unpack this a little bit. So we're talking about properties priced between 300,000 and $400,000. So when we're talking about the greater Phoenix Metro, this is definitely the low end of the market now, right?
Yes.
And so we have seen some price reductions here. But I just want to ferret out what you said a moment ago, are you saying that the interest rate sensitivity with the rising rates is higher or lower in the low end properties?
It's higher.
It's higher. So in other words, those people have basically been kicked out and they will stay in the renter pool because they just can no longer qualify, potentially with higher interest rates. Right. Is that what you see going on?
Well, they're just one of the players that are affected. So first time home buyers, of course, you know, everybody who's on the higher ranges, their interest rate goes up, they get a smaller house, they stay in the game. Right. They just get a smaller house. But when you get into the three to four, remember our median price here is 480,000 right now. And so this is definitely where the first time home buyers are. But you also have your private landlord investors who may be leveraging as well. So if you're looking at trying to purchase a rental, okay. And you're coming in and sellers still want the most they can get for their homes, but yet now you're spending probably 6 or 7% maybe on your interest rate.
Right, because the investors pay higher rates.
That's right.
They can get into the fives though, still. But yeah, go ahead.
Depends on their credit, depends on, you.
Know, who, whether they want DCR or.
You know, they have all kinds of options. That's right. But the thing is that as these interest rates rise, their cash flow starts to dwindle and some of them may not be able to make the numbers work for themselves, you know, especially if they're not cash. You also have.
So then, so then some investors will just decide not to invest. Right. And so both of these things would lead me to conclude, and I don't know if you really study anything at all on the rental side, but certainly you're aware of the dynamic that this would have the effect of pushing rental prices upward even more. It would put more upward pressure on rents because you've got this set of people staying in the renter pool exiting the home buying dream, sadly. And then you've got fewer investors that are willing to pull the trigger and buy investment property as well. So that constricts supply of rentals at the same time. Right.
Well, here's the issue is that landlords used to be, over the last couple of years, they knew there was room to push those rents so they would take on the higher prices knowing they'd have to charge more in rent. So rents have been rising, but now they're hitting a ceiling where even if somebody's knocked out of the buyer pool. That doesn't mean that they can pay a higher rent. If they can't pay the higher cost of buying. That means that these landlords now are having to maybe compromise on certain things like allowing roommates, allowing pets, allowing, you know, making some adjustments so that they can get the required rents that they would like. But they're not the only players either. You also have, in this particular price point, you have flip investors as well. So as the lending situation has made their pool of people who can buy these homes back from them once they're done renovating or, you know, trying to execute their flip, they're going to get more conservative as well. So if the prices are too high or people aren't taking their offers of like, you know, 50,000 below asking or something like that, then they're not going to be jumping on these either. Especially if they're not confident that they won't have a long holding time. So this particular price point is being specifically affected the most in terms of demand.
So I got a question for you. A few minutes ago you mentioned, I think very rightfully, and I agree with you on this, that on the higher side of the market, and you know, we're not really talking extremely high end necessarily, but we are that too. But just over 400,000 or over the median in your market, which is $480,000, you said that people would simply adjust their expectations. They still are home buyers. They're still in the. They simply have to settle for less house because now they can't qualify for as much house as they wanted to originally. And I completely agree with that. Why would that be any different? And I don't think it is different. By the way, you might disagree with me with renters. See, I think what happens is you talked about the landlords pushing rents up as high as the tenants can afford. But I think what really happens is the tenants simply have to downgrade their standard of living. Unfortunately, you know, that's, that's what inflation does. It's a robber and a thief. It destroys the quality of life. It destroys the standard of living. I mean, look, before grocery prices shot through the roof, I bet people, you know, normal people with normal incomes, okay, went to the grocery store and they bought nicer stuff and now they buy inferior quality stuff. Maybe they used to buy all organic and now they don't because it's just too expensive. They used to buy goodies at the store and you know, truffles and whatever, filet mignon, and now they don't Right. You know, they went from steak to hamburger. People simply compromise. That's what happens, I think, just at all levels, doesn't it?
Yes.
Renter, buyer, everybody, right?
Yes, absolutely. I don't think most renters really want to have a roommate, but if that's the position they're in, that's the position they're in.
Yeah, right. Yeah, it is. It is.
Okay, so, but where we're really seeing it like again, let's just go back to when supply rises like this. Then sellers have to adjust their expectation on price as well. They've been asking for the moon. Right.
Right.
Now they have to kind of come down to where the oxygen is, which is where the buyers are.
So when still in the stratosphere, but certainly not down to earth yet.
Right. So between 401 and a half million and I combined them because they all look the same. So when you get into this price range, you're seeing a massive increase in seller price reductions every week. And your median price reductions, if you're between 4 and 8, you're looking at 10,000 to $15,000 median. Once you get over 8 to 1 1/2, you're looking at anywhere from 26 to 51,000 median amount of price cuts. And when you look at the number of them, we are now soaring over 2019, which was pre pandemic. So, and this is a very sharp increase of people bringing that list price down. And it continues over one and a half million. Not quite as dramatic, but definitely all of the price points over 400 that have seen a. Not a demand drop necessarily. Some of our demand is coming down, but it's more seasonal than it is anything else. But it's because there are some sellers now getting off the fence, thinking, okay, well, I guess if I'm going to sell at the peak of price, then I'm going to go through my home on the market before this is all over.
Right. So they've added to, they've added to the supply. Those extra. The sellers that were kind of waiting and think, you know, I'm going to keep riding this wave a little longer. But now they're kind of, some of them are sensing maybe the wave is breaking and it's time to pull out. You know, if you're a surfer, that's exactly what you do.
You know, that's right.
You pull out of the tube before it breaks on you. And so something. So they're adding to the supply. But I just want to point out two things here, Tina. Number one is that These price reductions are pretty mild. I mean, reducing the price $26,000 to $51,000 on a house that's a million five is just really no big deal. Or $14,000 if it's $800,000. That isn't significance, is it?
Well, once you get over. I'll pop back to this slide. Once you get over 800, you're more like a 25,000 to 50,000.
Sure.
Once you get over one and a half, you're looking at 100 to 120,000.
Still over 1.5 million.
Yeah, yeah. You're still relation to their original price is not a huge price reduction. But these are every week. So if you have one property who has that has three price reductions, say once a week, they're going to be in. Every single one of these counts. So they, you know.
You know what else I really struggle with on these is that, you know, everybody's pricing their house when they list it, because they've all been so conditioned now to think that whatever the neighbor got, I'm going to get way more. Because of course, my home's always better than the neighbors. Yeah, they always think that no matter what. And they just think, well, you know, if that one sold, then mine must be worth 50 or 100,000 more. Right. So when we talk price reductions, are they reductions off a seller's faulty psychology or are they a real market value reduction? Right. That's hard to tell, isn't it?
Well, it's not that prices on the sales side are going to come down. Okay. We have been running at.
This is just on the listing side. Yeah.
An appreciation rate of say, 2%, 3% a month is very, very high.
Yeah.
Right. And if that's what you got used to, then you're pricing your property maybe 3% higher than your last comp. That may have been two or three months ago.
Right.
And that worked for a while, until it didn't. Until now. You've got more competition now. The buyers have more to choose from. They're not forced to to pay that much more. So as a result, you're on the market. This market talks, and when the market talks to you in this type of environment, if you don't have an offer, you don't have showings within 24 hours, 48 hours, then the market has essentially ghosted you. When you're ghosted, you're bringing the price down. Because when you're in a frenzy like what we've been in, the only thing it is is price at that point. Right. So the Expectation that you would get, say 3% higher than your competitor or your, your neighbor from two or three months ago is now not reasonable. Now you may get 2% higher, maybe 1% higher, maybe a half a percent higher than that comp. Because literally two months ago, we were in a completely different market. You had fewer competitors to deal with and buyers have more to choose from. So that's why the first indicator, this is not the last indicator to move. This is the first indicator that tells us that sellers are under some pressure. Not a lot of pressure. They still have hope. Okay, they still have hope, but a little bit of pressure that they're coming in. The next thing to move is your days on market. So once the price reductions don't work to get that contract in an immediate time frame, then you start to see the creeping up. And actually, this is from last week. We're already up to 11 days now. So we've already started to see that creep. And it's not a bad market. 11 days is not terrible.
That's nothing.
But it is, it is starting. So the days on market started about halfway in. So about five weeks ago, the days on market started to creep up. Not super noticeable because it's just a day here and then it hangs out. But in some price points, especially over 400,000, we are seeing an extra day added almost every week before a property is under contract. So that is the second thing to move. That does not mean prices are going to come down yet, though. Sale prices, the list prices, come down, the days on market go up, and then what happens is you get that one deal, that one contract, and that's the only game you've got going right now. And they are asking for a concession. And this is where agents who have not been in the market longer than two years have actually been asked what's in a. What is a concession. They have not had to deal with concessions. Yeah, like for those of you who are quietly wondering, that's where the seller is offering to pay a certain amount of closing costs, they might actually take a contract that has less than 50% down. You know, you're not going to see people waiving appraisals, you're not going to see people waiving inspections. And if they find something that is not, not acceptable to them in an inspection, they have three or four other homes that they feel confident they can go get and they'll be happy in. So they can might see a few more fallouts. Right. But that doesn't mean we're in a buyer's Market. It does not mean that sale prices won't continue on an upward trajectory. It just means that we are seeing the slowdown and we're seeing the tables turn a little bit more towards the buyers. Sellers getting a little accommodating and responsive.
Yeah, right. Okay, good. Keep going. And it's about time. But we're far from balance, aren't we? We're a long ways still.
Yes.
However, at least we're moving in the direction of the buyers a little bit.
We are. We are moving in the directions towards the buyers a lot compared to where we were literally 10 weeks ago. We're still a very strong seller market. However, because of what people have gotten used to the last two years, it feels like a buyer's market. It just feels that way. And, you know, the more properties you see go on the market, the longer you see them hang out there. Not under contract. Maybe not seeing a line of people around the door, you know, out the door to want to go in and see it. I think that that's giving people this feeling that, okay, maybe we're going into this buyer's market. Maybe I'll wait for prices to come down. But then they're smacked in the face with the interest rates. So it's kind of a bittersweet experience for buyers because they don't like these interest rates, but they are having a much better experience in the home buying process now.
At least they get a couple more houses from which to choose.
That's right.
Right.
That's right.
Okay. Okay. Let's go to the next data point.
So essentially, this kind of brings it to the forefront. Like, are we still in a frenzy? As of week 22, we were still in a frenzy up to $600,000. This is weakening very quickly. Every single week, this weakens. Meaning that a frenzy, by our definition, is when you have more under contract than what's available for sale. So you can see up to 600. You still have more under contract than what's available for sale. But you can see that the. The number of listings compared to this time last year are up 200%, 178%. So it's not that your demand hasn't grown or that demand's not good. It's that you have so many more competitors in these price ranges that by the next week, it'll be 500,000. By the next week, it'll be a frenzy only under 400,000. So that doesn't mean that the market isn't a buyer's market. It just means that we Are now moving into a less aggressive seller market where you can still expect some appreciation on your home, but you not going to see the aggressive nature of buyers going soaring over asking price. You know, the percentage of sales over asking price in a normal seller's market is not 50%. In a normal seller market, it's more like 10 to 15% might go over asking. An amount over asking is not $50,000 or $20,000. A typical amount over asking price is $3,000.
But in what price range? You got to make that relative to the price range?
Just median. Overall. Overall median.
So $480,000 house. Yeah.
Right. So essentially the higher up in price you go, the less common sales over asking price are. So once you get over a million, 2 million, 3 million, the idea that those are going to go over asking price is they dwindle first.
I got to tell a story about a house I was looking at recently in Scottsdale. I wanted to buy this property and it was listed for, I think a million four. It was in perfect condition. It had a great location. This is a great house. I called my agent, said, I want you to put in an offer. And she said, there. I can't remember the number, so forgive me, I'm not going to get this right. But there were several offers. There were many offers already. The house came on the market like, you know, last night and it sold. And this was just two months ago, maybe three. I don't know. I'm not. Maybe not remembering the exact time, but it was somewhat recently and it sold for over $400,000 above list. I just can't believe it. I mean, it's just. It's just shocking. But again, those are becoming few and far between. That's not the norm anymore, thankfully, because, well, it's. That's a very hard market in which to operate. Yeah.
The irony is that we are still seeing, even though it's coming down, we are still seeing a high level of closings coming in over asking price. The. The amount is declining. It used to be 20,000 was the median over. Now it's like 15. Right. We do expect that to continue down as we go. But remember that all of our closings don't represent today. All of our closings represent where we were most likely at least four, 60 days ago.
Yeah.
Yeah. And so with these interest rates having kind of given a lot of people pause, we've had a significant shift over the last four weeks in the number of new listings coming on the marketplace.
That's why I think the next month or two are going to be very telling that. It's, it's just a really telling time right now. But look, at the end of the day, inventory is still extremely low historically. It is just tragically low. And believe it or not, and I did a study on this that you might want to know about, Tina, median mortgage payments are actually quite low historically. And there's another interesting chart released by the St. Louis Federal Reserve showing, and you'd like this one, I can share it with you if you haven't seen it already, showing that the debt burden on homeowners is just historically low. It was lower two years ago, but it's almost the lowest it's ever been since 1984. Yes, these people are not distressed. They're just not. There's not likely to be any sort of foreclosure market. If everyone's expecting that, just don't hold your breath.
Yeah, that's right. The reason why we're not expecting a crash is for that very reason you do not have a lot of desperate sellers. Sellers are not desperate to give up their 2 point something percent mortgage rate. Their payment that could easily be under $1,000 a month. Why would they walk away from that payment and go rent for $1,000 more for the same home or less than what they're currently living in? So it doesn't make any sense. But what does make sense is if somebody is in financial distress and they are worried about making that payment, their payment is so low they would only need to bring in one person. So it would be, I would say, this is my perspective, it would make more sense to think that people would leave their rentals and go move in with people who need help paying their mortgage payments. So the last thing we would see is foreclosures. The first thing we would see is people kind of getting out, out of that rental pool if we're going to see it now. That's not something I track. That would make a lot more sense to me than somebody walking away from, in many cases, a ton of equity, 50% equity in their home and decide in the 90 day period after their foreclosure notice, pre foreclosure notice, that they can't sell their home in 11 days. That doesn't make any sense either.
Yeah, right.
And collect all of that and save their credit. They have so many choices and there is so much aid, serious aid for homeowners to stay in their homes that it doesn't make any sense to say that we are now waiting for all these foreclosures to come on because these sellers are not desperate. If anything, people are walking away from their car payments first.
Right? And there is going to be a bit of a car crash, pardon the pun, after as soon as the manufacturers catch up. And I have been watching some interesting things about the auto industry as soon as the manufacturers catch up, which could be a couple more years with this chip shortage. I mean these shortages are just taking so long to work their way through the system. I mean we've basically lived on this super efficient just in time manufacturing economy globally these supply chains are still all screwed up. It's a mess. You know, here's a thing I've been saying for a long time, Tina. I think that the Federal Reserve has basically put a poison pill into the real estate market. Now it's not poison for investors or owners or sellers, who it's poison for is. It's poison for buyers and renters that want to become homeowners. And that poison pill is, you alluded to it a moment ago. Why would they give up these 30 year fixed rate loans? And at 2.5, even 3, 3.54%, nobody is going to walk away from that. That mortgage has become a giant asset. It is an asset and I like it to the bond market because in the bond market we all know that when interest rates go up, the value of any bonds you're holding goes down. And if interest rates go down, the value of your higher rate bonds goes up. That's the exact same thing with all the tens of millions of people holding these super cheap mortgages out there. The value of their mortgage, AKA their house because the mortgage is attached to the house and immovable goes up because the rates are higher. And that's just going to constrain supply for as much as 30 years. I mean that is shocking to me that they did that. It's a very dysfunctional thing that they did because these people that got their mortgages in the last two years, those mortgages aren't going to come due until 2050, 2051, 2052. I mean they're going to remodel their houses, they're going to add a room, they're going to add a pool, they're going to make their house nicer. They're going to try to keep that house no matter what because that mortgage cannot be replaced.
Well, you know, never say never. If I've learned anything about mortgage rates, don't try to predict them at all.
I agree with you there, but I mean, do you think they'll come back down to these, I mean.
Well, historically speaking, and like I said, I don't predict interest rates. I let other people be wrong about.
Interest rates, however, and I've been wrong about interest rates a lot. For me to be wrong, we have. I have to be very wrong. All I'm saying is it just has to be above those 5,000 year lows that we experienced, you know, to want them to keep the house. Right.
So historically speaking, though, and forgive me if I already went over this in our first one, but historically speaking, from interest rate standpoint, if you believe we're going to be going into a recession, every single recession, at the end of that recession, interest rates take a dive every single time. Every single time. So if you believe we're going into a recession, then you would reasonably believe that interest rates will most likely come down towards the end of that recession or even during the recession, if that's what happens. And so as a buyer today at 5.2% or whatever it is right now, if I'm expecting maybe in one year, two years, three years at the most, for interest rates at some point to come down, I know that I'm going to be able to refinance and lower my cost. But I'm getting in today at this price because the price I pay is permanent, but my payment, as we know, is not. And by the time I've accumulated.
That's what I love about real estate. Yeah, you can renegotiate the deal on an ongoing basis. Right. Whereas with, with a stock or cryptocurrency or precious metals, you don't get to renegotiate the deal. You bought it, that's the price, you locked it in. But real estate, because it's multidimensional, you can renegotiate the deal along the way by refinancing and so on and so forth, adding value, whatever. And you're absolutely right about that. All I'm saying is, are we going to see 2.5% again? You know, that's the thing. Like, I agree that rates may well go down. The government has an incentive and the Federal Reserve has an incentive to see rates go down because they've got so much debt. Right. And so we have an aligned interest with them. They don't want to pay high rates on their debt and have to pay high rates on Treasuries to finance the debt. But you know, back to 2.5%, I don't know.
Well, at the same time, do we even need, will we need 2 1/2% by the time this all goes down over time. Are we expecting that incomes are not going to rise during the time of a late shortage? Yeah. So can people actually afford. I mean, look at all of the side gigs on, you know, TikTok, you know, YouTube. All we need to do is become influencers, right? And we get this extra stream of income. There's a lot of money circulating around. So is it reasonable to expect that our incomes are not going to rise over time to accommodate the interest rates and the prices of homes two, three years down the line? How long has the typical recession? And when I look back, going back to the 70s, typically a recession is about a year. Like I said, I don't predict them. I'm just looking at what's reasonable to expect here. If we're going to have a recession one year, two years, and then towards the end of that, will we see interest rates come back down. And oftentimes whenever they've spiked up, even in the 80s, whenever they spiked up, they have spiked down almost as quickly as they went up.
We shall see that. That's a tough one to predict. Read. I know, I don't predict observer, if you want to know more about interest rates, but that's a really tough one. Yeah.
If you are interested, I'll just pull. This is the slide I was talking about where I went back to the 70s to show at the end of each recession, they spiked down every single time.
That's how they got out of the recession, arguably by reducing rates, by putting that downward pressure on rates and heating up the economy again. The other thing you see on this chart is that these rates are just so, so low. Even now they are so low you don't even touch the 5% mark until the early 2000s.
Yes, yeah, that's right.
Before that, you don't get anywhere near it.
So at this point, what we're looking at is it's not all about the interest rate, it's not all about the payment. It's about where do you expect incomes to go in the future? Where do you expect supply to be in the future? What we have right now is not, in my opinion, is not a correction. We have a disruption corrections. So allow me to go to another slide, if you don't mind. I'll just scroll all the way down here towards the end of my presentation. You know, in my opinion, a correction is after a disruption. So when you have a market that's going in a certain direction anyway and somebody interrupts it, disrupts it, you could be like back in the 2009 it was the first time homebuyer credit. Right. And pushed us into a little seller market. We were like, yay. And we all welcomed it, but it was very expensive. So you remember after the next election cycle, it did not carry through so expired. The correction happened after that disruption was done right there. And we went back to where we would have been anyway had it never happened. So the question today is where is our market going anyway? Where do you expect this would have happened anyway? Probably a curve. Maybe not this year, but maybe over time we would have had this curve anyway. So the disruption, if it does cause prices to come down eventually, it's not happening right now. But if it does, then that would be the effect of a disruption. And then the correction would be once that interest rate starts to come back down, the correction will most likely possibly be on the uptick, not on the downtick. So that's kind of my perception of what's happening right now. When somebody is purposely increasing interest rates for the specific reason to slow down housing and slow down consumption, that does not feel like a correction to me. It feels like a disruption.
Okay, yeah, good distinction.
So this is just Phoenix's history and of course we'll have to see who all's right at the end.
We will, we shall see.
It's, let's talk into the next things.
Are, you know, predictions are, you know, what they're worth, right?
Yeah, but here's the thing. If you're a buyer or a seller, timing the housing market is really, it's. You just get in when you get in and you work at whatever the market is at the time. So trying to wait to the very last minute, like you said, you know, you get in when you can afford it and then you, you get your monopoly money and you start building from there. And then the longer you hold, the more, the less risk you take on. Because if you're thinking I'm only going to hold it for a year or so, I don't think this is a good time for short term holds. I think that this is a good time for three to five year holds to see what the market's doing, to see if you're going to ride out any kind of disruption and see what the correction looks like down the line. And it really does matter, like how many homes are we going to have, how many people are going to be here, are we going to continue to grow our population in the metropolitan area that we're in. And that all plays a massive part in predicting long term. And so that's why we at the Crawford Report, we don't predict long term. We just tell you where it's going to be over the next three to six months. So because if you're driving in the dark, you need headlights to know when there's a curve in the road. So that's what we're here for.
Yeah. Good. Good stuff. Okay, Tina, anything else you'd like to share with our audience?
Well, we touched a little bit on foreclosures. So here's an interesting thing. We have people. I know you've been around a long time, Jason. I've been around a long time. We have seen foreclosures. We know how these work. We forget that there are a lot of people, professionals and consumers, that really don't understand the foreclosure process. So in Greater Phoenix, when somebody says when in foreclosure, right before there's a foreclosure, there's a pre foreclosure, which is a notice of trustee sale, which gives a seller 90 days to sell their home or come do with the, you know, come up to par with the lender. Right. So right now, as of this particular measure, we had nine days before home sold. So the idea that pre foreclosures were up 349% from April of last year and it was about the same for May, by the way. The thing is that that's not hard to do when you're coming out of a moratorium. We were still 33% below pre pandemic levels of pre foreclosures. And these are not actual foreclosures. These are just lenders saying you haven't made your payment. And so the actual numbers of people who actually foreclosed, that's a trustee deed. And out of all of them, only 21 made it all the way to foreclosure. Yeah.
21 out of how many?
Well, 337.
A lot of people are familiar with the California process. So let me just explain that one. They file what's called an NOD or notice of default. And usually that's long after the person stopped making payments. So there may be a year before they file the nod. Right. So for example, someone who stopped making payments when their business was shut down during the pandemic. Right. I'm being snarky intentionally. You know, they may still not be making payments. Okay.
Yes.
And the lender literally just filed an nod. Okay. Then that starts the clock for a 90 day cure period. Okay. Or a 90 day period where you can catch up on your payments.
Okay.
And then after the 90 days, assuming they even enforce the 90 day period, which they usually don't, they usually work with the person. Okay.
Yes.
But if they do, the law allows them to have another 21 day period after that where the person has to pay the entire loan balance off or go to trustee sale and then that is a foreclosure at that point.
Right.
But a lot of people count the nods or even just back payments when people are making payments and then they say, oh, look at the foreclosure market, there's all these foreclosures. But that's just simply not true. Because as Tina has shown you, out of 337 equivalent of the nod being filed, only 21 actually made it to foreclosure.
Yeah. And you know, those had to be some real treasures.
Yes. Some pretty bad houses that nobody wanted. Yeah.
And for us, when they went to auction, they all went to a third party. None of them went back to the bank. So that tells you.
Yeah. In other words, the bank has the option to be a party to that sale and they can just buy it back themselves. Right.
Typically they. The bank only takes it back if nobody buys it at auction for what the bank requires.
Got it. So in all cases, someone bought it.
Yes, somebody bought it at auction. Which tells me that the minute in Greater Phoenix, even today, if you have a notice of trustee sale filed publicly on your home, you are probably going to get inundated with calls and offers of people buying, you know, to buy your home, list your home, avoid that seven year hit on your credit to where you can't buy another home, which is what we experienced back then. I don't believe that with the level of demand we have today that anybody who goes all the way to foreclosure is just a sad story and unnecessary. Completely unnecessary.
Right. Because someone would have purchased that house long before it ever got to the foreclosure stage.
Yeah. And easily for what people would owe. At the very least, I'm sure you can find a bunch of investors who will at least pay what you owe Right. On the home. And so you'd still lose all your equity. But it's like the idea that we're going to go into one of these 2008 through 2011, that's not a reasonable expectation based on the most recent activity.
Yeah, good point. Okay, Tina, this is great data. I always appreciate you sharing this stuff. We've had a good long discussion on this. Just wrap it up with any closing thoughts. If you would give out your website, we'd Love to have you back in the near future again to just give us an update as the market goes through a little bit of a change.
Yes, yes. Well, here's the thing. We are a proprietary service out here in Greater Phoenix. We have very strong relationships with the multiple listing service out here and public record service providers out here. And so as a result, we are only permitted, really, to sell our services to real estate agents here. So if you do want to know what these markets look like for your particular zip code, for your price point, the type of home you're buying, the best thing to do, especially in this marketplace, is to be in touch with a real estate agent who is a subscriber to our services at the Cromford Report. And so if you do want to know, just real briefly, we do have on the front page of our website, cromfordreport.com you can see our dials that have our supply index and our demand index and our market index. And anything that's green is good for a seller. Anything that's red is bad for a seller. So if it's green, it's a go for seller, market.
Okay. Good stuff. Well, Tina, thank you so much. Always a pleasure.
Yeah, my pleasure. Thank you.
