3/15 Unfazed
Inflation Remains Stagnant, CMI Deteriorates, The Market Is At An Almost Standstill
This newsletter is 637 words and should take about 5 minutes to read.
Read last week’s newsletter here →"3/9 Downshift"
Boeing offed a whistler-blower about the company (not confirmed but so obvious). Chinese ByteDance might have to sell TikTok to an American company (Laughs in Meta and Google). FC Barcelona may break up with Nike. Jamie Dimon warns a US recession is “not off the table” yet. ISIS is increasingly relying on crypto to fund operations. An Aussie billionaire plans on building a replica of the Titanic. AirBnB has banned all hosts from installing indoor cameras. And the greatest sporting event of the year is upon us next week.
tl;dr
Inventory continues to outpace demand at an extremely low level. But, still causes the market to slow week over week.
The average interest rate is 7.09%
Inflation is stagnating is may lead the Fed to not cut rates this year
Phoenix
Closed listing counts for February 2024 managed to exceed February 2023, but only by 0.2%. This is not the recovery in volume that so many are impatiently hoping for. Sereales pricing performed better than anticipated and was up 1.7% from last month based on the monthly average sales price per square foot. The monthly median sale price rose by $10k woodtoo. However the rate at which contracts are getting signatures is lower than we expected and much lower than normal. We are starting March with only 8,693 listings under contract, down 4.6% from this time last year. And last year was well below normal.
The table deteriorated for sellers since last week, but only slightly. The average change in CMI over the past month is +0.4%, down from 0.8%. There is a wide gap between the top and the bottom of the table.
We have 7 cities showing an increase in their Cromford® Market Index over the past month, while 10 have declined. This is another table with a majority of red markers, with Glendale changing sides after a very good run higher. In fact, despite its CMI moving lower, it jumped into second place over Gilbert, which declined by a larger amount.
Both supply and demand are rising, but both at a very slow pace.
The Cromford Market Index is a gauge of Phoenix’s Supply and demand metrics. 100 is considered a balanced market. Anything higher than the 100-point benchmark is considered a seller’s market. Anything below 100 is considered a buyer’s market.
As of March 15th, 2024, the CMI has decreased to 115.1. Down 1.2 points from 7 days ago.
Supply has increased by 8 basis points and demand has increased by 2 basis points.
Rates
7-Day rate change: +24 basis points
YoY change: -11 basis points
Average interest rate: 7.09%
Sticky cpi
Prices paid to US producers rose in February by the most in six months, driven by higher fuel and food costs that add to evidence inflation remains elevated.
The producer price index for final demand increased 0.6% from January, Labor Department data showed Thursday. The gauge rose 1.6% from a year earlier, the largest annual advance since September.
So what does does mean? Well, other than this February and January, inflation was consistently going down every month. However, after the new year, it is now showing signs of stagnation around 3%. This figure is higher than the Fed’s goal of 2%. Meaning the Fed may keep interest rates higher for longer than anticipated. The markets were pricing in 4 cuts this year. Now they’re only pricing in 3… And in my opinion, we won’t have any since it’s an election year and the Fed is supposed to stay apolitical during elections.
S&p500 vibe check
Meme, tweet, & fact of the week
UCLA boasts an impressive legacy in the March Madness tournament. Securing a record 11 championships.