Market Data - January 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 January 1, 2018 we had 2,819 active listings over $500,000. This is a 6% decline largely due to the low number of new listings posted in December and many existing listings expiring at the end of the year. This latest total represents 5.0% fewer listings than we saw on January 1, 2017, and this is a larger drop than we saw last month. Luxury listings are still in good supply compared with the rest of market, however. We expect listing counts to grow quickly between January and April. The price range from $500,000 up to $1 million has seen supply drop by 13% since last year, while that between $1.5 million and $3 million has increased by 5%. Above $3 million active listings are down just 2%. 98% of active listings are normal with 39 short sales and 9 lender-owned properties.
Demand – Sales
There were 374 closed transactions though ARMLS during December 2017. This is a very strong 28% rise from December 2016, when we saw 292. This is also the highest December total in history for the Northeast Valley luxury market. The stand-out price ranges were $600,000 to $1 million (up 47% from December 2016) and from $2 million to $3 million (up 75%). The increases were modest for $500,000 to $600,000 and $1 million to $1.5 million while sales over $3 million dropped from 9 to 8.
Demand – Under Contract
We can anticipate future sales by looking at homes under contract. We started 2018 with 459 listings under contract, which is up 33% from the 344 of January 1, 2017. This is a higher percentage than last month and suggests strong sales during January and February. All price ranges saw good increases compared to last year, except for $2 million to $3 million which declined from 18 to 13. An increase from 14 to 34 for homes between $1.5 million and $2 million was the highest percentage increase. Normal sales comprise 96% of luxury homes in escrow, up from 93% 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 $270 per sq. ft. which is an increase of 23%. Luxury home pricing first peaked in August 2015 when the twelve-month average price per sq. ft. hit $269 and finally exceeded that level 2 months ago. The twelve-month average currently stands at $270, up just 1% from $267 in December 2016. The six-month average climbed to $268, up 1% from $265 in December 2016 and the three-month average reached $275, up $3 from $272 in December 2016.
Despite very strong sales, overall luxury pricing has increased less than inflation over the last 2 years in the Northeast Valley.
Under Contract Pricing
At last we see a significant change happening here. 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. From then until November 2017 it had made no consistent moves in either direction. However, it finally made a new high on November 1 and as of January 1, 2018, the average stands at $280, a significant upward move since last month. This suggests that sales prices should at last make some positive progress in the next couple of months. The average under contract price for normal listings is $282 per sq. ft. The average for (the very few) lender owned homes is $191 per sq. ft and short sales average $216 per sq. ft.
Area Reports - January 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.