Market Data - August 2016
We are looking at single family homes price from $500,000 upwards in all areas of the Northeast Valley, including Scottsdale, Paradise Valley, Fountain Hills, Rio Verde, Arcadia, Biltmore, Cave Creek and Carefree.
We usually see a very steep decline in active listings over $500,000 during July each year. This year is no exception and on August 1 there were 2,679 homes offered for sale, down 10% from the 2,966 we saw on July 1. This decline was due to the sales that closed during July, relatively few new listings plus a large number of cancelled listings. It still leaves us with 16% more active inventory than we had last year at this point, which means we still have more than enough supply to meet the relatively weak demand from buyers during the summer months. 98% of active listings are normal with 42 short sales and 15 lender-owned properties. The dip in supply was fairly consistent across all price ranges.
Demand – Sales
There were 305 closed transactions though ARMLS during July 2016, down 15% compared to July 2015. This unimpressive number is partly due to there being a weekend at either end of July this year meaning that there were 10% fewer working days than July 2015. Unlike last month, sales were relatively strong at the top end with 7 units over $3 million (the highest July count since 2010), and 19 between $2 million and $3 million. This is the second highest July total in 16 years. Sales between $800,000 and $1 million were much weaker than last year with 41 sales compared with 72 in July 2015.
Demand – Under Contract
We can anticipate future sales by looking at homes under contract. The number of listings under contract was 458 as of August 1, which is up 19% from August 1, 2015. This is a positive sign and all ranges up to $2 million are higher than last year. The ranges above $2 million are much lower than last year reflecting the higher number of listings that closed successfully during July. Normal sales comprise 95% of luxury homes in escrow, up from 91% a year ago.
Due to relatively low volumes and a wide range of price points, the Northeast Valley luxury market can display a lot of volatility if measured on a monthly basis. We therefore prefer to measure over a longer period in order to identify trends more accurately. Over the 4.5 years since the market low of $219 in early 2012 we have seen the 12 month average move upwards to around $265 per sq. ft. which is an increase of 21%. However luxury home pricing peaked in August 2015 and has been on a slow weakening trend since then. The 12 month average pricing is $3 per sq. ft. lower than it was a year ago in July 2015. The six month moving average stands at $265, down from $268 last month and $269 in July last year. The 3 month average stands at $264, down less than $1 from July 2015.
Under Contract Pricing
The pricing for homes under contract was at a low point of $165 per sq. ft. in September 2011. Up to the end of March 2014 it was advancing and reached a peak of $257. Between March 2014 and August 2016 it has made no consistent moves in either direction and as of August 1, the average stands at $257, the same level as 2.5 years ago. This suggests that sales prices will continue to move sideways in the near future. The average under contract price for normal listings is $260 per sq. ft. The average for (the very few) lender owned homes is $156 per sq. ft and short sales average $217 per sq. ft.
Area Reports - August 2016
Although we publish montly reports for the following five communities, we track sales in all areas of the Northeast Valley. If you have questions about a specific area that is not covered in the areas below, please call us at 480-991-2050 and we can provide you with up-to-date market information.