Market Data - August 2017
Our monthly report analyzes market trends for single-family homes priced $500,000 and over in all areas of the Northeast Valley, including Scottsdale, Paradise Valley, Fountain Hills, Rio Verde, Arcadia, Biltmore, Cave Creek and Carefree.
On August 1, 2017 we have 2,575 active listings over $500,000. This is 7% fewer than the 2,767 we saw last month. Luxury listings are still in good supply compared with the rest of market. However this latest total represents 4% fewer listings than we saw in August 2016. We expect the active listing numbers to decline further over the next month until we reach a low point on September 1st. A little over 98% of active listings are normal with just 31 short sales and 17 lender-owned properties. The reduction in supply was consistent across all price ranges.
Demand – Sales
There were 353 closed transactions though ARMLS during July 2017. This is a 17% rise from June 2016, when we saw 301. It is the third highest July total in history, beaten only by 2005 (with 479), at the height of the housing bubble, and by 2015 (with 360). Most of the price ranges saw higher sales than in July 2016, with the range from $1 million to $2 million significantly stronger than last year. However sales for homes over $2 million were slightly lower. There were 24 homes over $2M down from 26 in July 2016.
Demand – Under Contract
We can anticipate future sales by looking at homes under contract. The number of listings under contract was 489 as of August 1, which is up 7% from the 457 of August 1, 2016. The increase in the number of listings under contract is very much smaller than the increase in closed sales, suggesting that on average listings are spending less time in escrow than last year. Some listings are being added to the MLS as they are closed. This implies they were not actually marketed through the MLS but are being claimed by the agents retrospectively. Not all ranges saw an increase over 2016; $500,000 to $600,000, $1.5 million to $2 million and over $3 million were all down. Normal sales comprise 97% of luxury homes in escrow, up from 95% last year.
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. Since the market low of $219 in 1Q 2012 we have seen the 12 month average move upwards to around $269 per sq. ft. which is an increase of 23%. However luxury home pricing peaked in August 2015 when the 12 month average price per sq. ft. first hit $269 and we have so far not seen any move higher than that. The 12 month average since September 2016 has been very stable at $266 to $269 per sq. ft. and is currently just $4 higher than a year ago. The six month moving average stands at $270, up $5 from $265 in July 2016 and the 3 month average now stands at $268, up $9 from $263 in July 2016.
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 quickly and reached a peak of $257. Between March 2014 and May 2017 it has made no consistent moves in either direction. As of August 1, 2017, the average stands at $255, just $5 higher than last year and still well shy of the peak of $264 set in January 2016. This suggests that sales prices may continue to make a little progress in the near future but it is likely to be slow going. The average under contract price for normal listings is $256 per sq. ft. The average for (the very few) lender owned homes is $146 per sq. ft and short sales average $206 per sq. ft.
Area Reports - August 2017
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.