Market Data - August 2019
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 September 1, 2019 we had 2,183 active listings over $500,000. This is a 4% decrease from 2,183 last month and a similar decline to the one we saw at this time last year. We now have 5% fewer listings than we counted on September 1, 2018. The price ranges over $2 million have 11% more supply than last year with 478 active listings, up from 430. The supply of homes between $500,000 and $2 million has dropped 8% from 1,861 to 1,705. Most affected are homes between $500,000 and $800,000, which are down 13%. 99% of active listings are normal with 18 short sales / pre-foreclosures and 10 lender-owned properties. Normally luxury listing counts rise sharply between September and November every year and we are expecting that pattern to occur once again in 2019.
Demand – Sales
Sales have been exceptionally strong since March, and 2019 gave us the second highest August total in history, beaten only by 2005. This is despite August being a traditionally a slow month for luxury sales. During August 2019 we counted 457 closed transactions though ARMLS. This is up 2% from August 2018, when we saw 449, so not as strong a comparison as in the previous 3 months. Sales over $3 million set a new August record of 15 (7 last year). The price range between $600,000 and $1 million was also up 12%, but the remaining ranges slipped slightly.
Demand – Under Contract
We can anticipate future sales by looking at homes under contract. We started September 2019 with 577 listings under contract, which is 15% higher than the 501 of September 1, 2018. This is a much stronger comparison than last month. A particularly strong segment is the range between $2 million and $3 million, where 46 homes are under contract compared with 33 last year. The under-contract count for the range between $500,000 and $1 million is also strong but that between $1 million and $2 million is weaker than last year. This data suggests that September closed sales are likely to be higher than September 2018. Normal sales comprise 98% of luxury homes in escrow, up from 96% 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 price per sq. ft. 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 $292 per sq. ft. which is an increase of 33%. The twelve-month average currently stands at $292, up 5% from $277 in August 2018. The six-month average has climbed to $299, up from $278 in August 2018 and the three-month average stands at $294, up from $270 in August 2018, but moving lower since peaking in April 2019.
Overall luxury pricing has established a firm rising price trend again over the last 2 years, having moved sideways between 2015 and 2017. This trend has been helped by the growing number of transactions over $2 million.
Under Contract Pricing
We have seen a rise in sales pricing over the past 18 months, but under contract pricing had been showing little movement until last December when we saw an abrupt rise to $300 per sq. ft. This reflected the low percentage of homes under $1 million in escrow at the start of January and a relatively strong showing from homes over $1 million. At the start of September our figure is back down to $286. We therefore expect sales $/SF to decline slightly over the next month, something that often occurs during the third quarter.
The average under contract price for normal listings is $287 per sq. ft. The average for (the very few) lender owned homes is $237 per sq. ft and short sales and pre-foreclosures average $265 per sq. ft.
Area Reports - August 2019
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.