Market Data - December 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.

Supply

On December 1st, 2018 we had 2,619 active listings over $500,000. This is a 4% increase from last month but 10% fewer listings than we saw on December 1st, 2017. Luxury listings are still in relatively good supply compared with the rest of market. However, we have seen reductions over the past 2 years and the supply trend is now moving clearly downwards rather than up as it was between 2014 and 2016. Although this downward trend gained momentum over the past few months, supply increased faster in November 2018 than it did in November 2017. All price ranges except one are seeing a reduction compared with last year, ranging from -16% for $2 million to $3 million to -8% for $500,000 to $600,000. The exception was the range over $3 million which increased by 5%. 99% of active listings are normal with twenty-one short sales / pre-foreclosures and twelve lender-owned properties. Normally luxury listing counts decline during December and then grow strongly between January and April and we have no reason to believe 2018/19 will be any different.

Demand – Sales

November 2018 gave us 349 closed transactions though ARMLS. This is down 6% from November 2017, when we saw 370. It confirms the weakness we saw in the under-contract listing count last month. Not all price ranges saw an annual decrease compared with November 2017. The range between $600,000 and $1 million and between $1.5 million to $2 million were up, the latter up 26%. However, homes over $3 million dropped from 14 to 8, while those between $500,000 and $600,000 fell from 95 to 62.

Demand – Under Contract

We can anticipate future sales by looking at homes under contract. We started December 2018 with 508 listings under contract, which is down 8% from the 550 of December 1st, 2017. This suggests that year over year sales growth is likely to be weaker in December and January. The weakness is concentrated in the low end from $500,000 to $1 million and in the high end above $2 million. The mid-range from £1 million to 42 million shows annual growth of 12% from 124 to 139. Normal sales comprise 96% of luxury homes in escrow, down from 97% last year.

Sales Pricing

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 $281 per sq. ft. which is an increase of 28%. Luxury home pricing first peaked in August 2015 when the twelve-month average price per sq. ft. hit $269 and finally exceeded that level eleven months ago. The twelve-month average currently stands at $281, up 4% from $269 in November 2017. The six-month average has climbed to $277, up from $266 in November 2017 and the three-month average stands at $283, up from $267 in November 2017.

Overall luxury pricing has established a rising price trend again over the last eleven months, having moved sideways between 2015 and 2017.

Under Contract Pricing

We have seen a rise in sales pricing over the past twelve months, but under contract pricing is showing little movement over the past month, so we expect a correspondingly small movement in sales pricing next month.

The average under contract price for normal listings is $284 per sq. ft. The average for (the very few) lender owned homes is $216 per sq. ft and short sales average $218 per sq. ft.

Area Reports - December 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.

Paradise Valley

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Scottsdale

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Arcadia

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Biltmore

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Fountain Hills

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