Market Data - January 2017

Our monthly report analyzes market trends for single-family homes priced $500,000 and over in all areas of the Northeast Valley, including Scottsdale, Paradise Valley, Fountain Hills, Rio Verde, Arcadia, Biltmore, Cave Creek and Carefree.

Supply

On January 1, 2017 we had 2,971 active listings over $500,000. This is 5% less than the 3,113 we saw last month, thanks to homes being taken off the market for the holidays and expirations at the end of 2016. This total represents 5% more than at the start of 2016. We can expect supply to rise sharply over the next 3 months. 98% of active listings are normal with 40 short sales and 14 lender-owned properties. The decrease in supply was consistent across most price ranges, with the exception of the range above $3 million which grew 3% instead of shrinking.

Demand – Sales

There were 298 closed transactions though ARMLS during December 2016. This is a fairly strong number, just short of the 299 we saw in December 2014. It is up 11% from December 2015. The weakest price range was $1.5 million to $3 million which dropped from 43 sales in December 2015 to 30 in December 2016. However, sales over $3 million grew from 6 to 9.

Demand – Under Contract

We can anticipate future sales by looking at homes under contract. The number of listings under contract was 344 as of January 1, which is barely changed from the 343 of January 1, 2016 and down 19% from last month. The ranges from $600,000 to $1.5 million were higher than last year but other ranges were lower. Listings under contract for homes over $2 million were especially weak, down from 40 on January 1, 2016 to 24 this year. Normal sales comprise 93% of luxury homes in escrow, up from 92% a year ago.

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 12 month average move upwards to around $267 per sq. ft. which is an increase of 22%. However, luxury home pricing peaked in August 2015 and had been in a slump until last month. The strong showing in October was followed by another increase in pricing in November, but December saw a slight decline again. The 12 month average pricing is at the same level as a year ago in December 2015. The six month moving average stands at $266, up from $258 in December 2015. The 3 month average stands at $273, which is up $10 from December 2015.

Under Contract Pricing

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 and reached a peak of $257. Between March 2014 and January 2017 it has made no consistent moves in either direction and as of January 1, 2017, the average still stands at $258, close to the same level as last month and 2.5 years ago. This suggests that sales prices will continue to move sideways in the near future. It also implies that the more favorable average pricing that we saw in October and November was primarily due to a favorable change in mix, away from the lower price segments, rather than a general improvement in pricing across the board. The average under contract price for normal listings is $263 per sq. ft. The average for (the very few) lender owned homes is $181 per sq. ft and short sales average $185 per sq. ft.

Area Reports - January 2017

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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