Market Data - August 2018
We are looking at single family homes priced 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.
On August 1st, 2018 we had 2,365 active listings over $500,000. This is an 11% decrease from last month. We have 8% fewer listings than we saw on August 1st, 2017 and the lowest number of active listings since September 2015. Luxury listings are still in relatively good supply compared with the rest of market. However, we have seen reductions over the past two years and the supply trend is now moving clearly downwards rather than up as it was between 2014 and 2016. This downward trend has also gained momentum over the past few months. The price-range from $1.5 million to $2 million is up 10% compared to a year ago, and homes over $3 million are down only 1%, but every other luxury price range is falling by at least 9% year-over-year. That between $600,000 and $800,000 is down the most since last year, dropping by 12%. 98% of active listings are normal with 30 short sales / pre-foreclosures and fourteen lender-owned properties. Normally luxury listing counts reach their minimum at the beginning of September and then rise until April and 2018 is following the usual pattern so far.
Demand – Sales
July 2018 gave us 438 closed transactions though ARMLS. This is a 24% rise from July 2017, when we saw 352, but July had the advantage of one extra working day in 2018 than in 2017. It is the second highest July total in history for the Northeast Valley luxury market, but short of the previous record of 479 in 2005. We have now experienced eight very strong sales months in a row. Every price range saw an annual increase over July 2017 except for homes over $3 million which only managed four (six last year). The sector with the highest increase over last year was that between $2 million and $3 million, up over 35% from 17 to 23. The range from $600,000 to $800,000 was also strong with an increase of over 33%.
Demand – Under Contract
We can anticipate future sales by looking at homes under contract. We started August 2018 with 591 listings under contract, which is up 13% from the 525 of August 1, 2017. This is the same percentage increase as last month and suggests that year over year sales growth will continue into August and September. All price ranges saw increases compared to last year, except for the range over $3 million, which dropped from 18 to 16. Normal sales comprise 96% of luxury homes in escrow, down from 97% 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 twelve-month average move upwards to around $277 per sq. ft. which is an increase of 26%. Luxury home pricing first peaked in August 2015 when the twelve-month average price per sq. ft. hit $269 and finally exceeded that level seven months ago. The twelve-month average currently stands at $277, up 3% from $269 in July 2017. The six-month average has climbed to $281, up from $270 in July 2017 and the three-month average stands at $278, up from $268 in July 2017.
Overall luxury pricing has established a rising price trend again over the last seven months, having moved sideways between 2015 and 2017. However, there has been little change between May and July 2018.
Under Contract Pricing
We have seen a slight rise in sales pricing over the past twelve months, but little progress in the last two months. Under contract pricing is showing a decline over the past two months, so we may see some further weakness in sales pricing next month. This is a common seasonal pattern.
The average under contract price for normal listings is $281 per sq. ft. The average for (the very few) lender owned homes is $177 per sq. ft and short sales average $199 per sq. ft.
Area Reports - August 2018
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.