Market Data - February 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.

Supply

On February 1st, 2019 we had 3,052 active listings over $500,000. This is a hefty 17% increase from 2,619 last month but not abnormal for the time of year and represents 3% fewer listings than we saw on February 1st, 2018. The supply trend was moving clearly downwards during 2018 until we reached November, but the last three months have seen supply start on a rising trend again. All price ranges saw a substantial increase last month, but the range over $3 million stands out as being the only one to set a new long term high of 349.  It is going to take a very long time for all 349 of those to sell at the current sales rate. 99% of active listings are normal with 22 short sales / pre-foreclosures and nine lender-owned properties. Normally luxury listing counts climb fast during the first three months of each year, reaching a peak at the beginning of April. It looks like buyers will have a great selection to choose from by April.

Demand – Sales

January 2019 gave us 315 closed transactions though ARMLS. This is down 11% from January 2018, when we saw 354. It confirms the weakness we saw in the under-contract listing count for the last three months, especially in December. However, it is still the fourth highest total for January that we have recorded. Not all price ranges saw an annual decrease compared with January 2018. The range between $1 million and $1.5 million was up 4% and between $600,000 and $800,000 was also up 4%. The range between $2 million and $3 million did very well with an increase of 35%, but homes over $3 million slumped from fifteen to just seven, rather ominous for the 349 homes we have for sale over $3 million.

Demand – Under Contract

We can anticipate future sales by looking at homes under contract. We started February 2019 with 559 listings under contract, which is down 8% from the 606 of February 1st, 2018. The last three months have been a little lower than a year earlier, but this month sees a slight narrowing of the gap that suggests that year over year sales growth is likely to be less weak in February, but still down from 2018. The weakness is concentrated in the low end from $500,000 to $1 million. They are flat between $1 million and $2 million but up 50% from 20 to 30 for listings over $3 million. Hopefully this means the top end of the market will bounce back from its very quiet January. Normal sales comprise 98% of luxury homes in escrow, up 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 thirteen months ago. The twelve-month average currently stands at $281, up 4% from $271 in January 2018. The six-month average has climbed to $281, up from $272 in January 2018 and the three-month average stands at $286, up from $283 in January 2018.

Overall luxury pricing has established a rising price trend again over the last twelve 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 had been showing little movement until last month 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 February our figure has fallen back only slightly to $297. We therefore expect sales $/SF to remain strong during February.

The average under contract price for normal listings is $300 per sq. ft. The average for (the very few) lender owned homes is $189 per sq. ft and short sales average $205 per sq. ft.

Area Reports - February 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.

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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