Market Data - January 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 January 1st, 2019 we had 2,619 active listings over $500,000. This is a 1% drop from last month but 9% fewer listings than we saw on January 1st, 2018. Luxury listings are still in relatively good supply compared with the rest of market. However, we have seen reductions over the past two years and the supply trend was moving clearly downwards during 2018 until we reached November. Supply decreased faster in December 2017 than it did in December 2018, so the trend has reversed slightly over the past two months. All price ranges except one are seeing a reduction compared with last year, ranging from -17% for $2 million to $3 million to -1% for $600,000 to $800,000. The exception was the range over $3 million which increased by 8%. 99% of active listings are normal with 20 short sales / pre-foreclosures and thirteen 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. We have no reason to believe 2019 will be any different.

Demand – Sales

December 2018 gave us 354 closed transactions though ARMLS. This is down 6% from December 2017, when we saw 376. It confirms the weakness we saw in the under-contract listing count for the last two months. However, it is still the third highest total for December that we have recorded. Not all price ranges saw an annual decrease compared with December 2017. The range between $1 million and on to $2 million was up 17%. Homes over $2 million did not do well, dropping from 34 to 16.

Demand – Under Contract

We can anticipate future sales by looking at homes under contract. We started January 2019 with 405 listings under contract, which is down 20% from the 508 of January 1st, 2018. The last two months have been a little lower than a year earlier, but this month sees a steep fall that suggests that year over year sales growth is likely to be much weaker in January. The weakness is concentrated in the low end from $500,000 to $1 million where listings under contract are down 29%. Above $1 million they are down only 2%. Normal sales comprise 97% of luxury homes in escrow, up from 96% 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 twelve months ago. The twelve-month average currently stands at $281, up 4% from $270 in December 2017. The six-month average has climbed to $276, up from $268 in December 2017 and the three-month average stands at $283, up from $247 in December 2017.

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 this month when we saw an abrupt rise to $300 per sq. ft. This reflects 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. We therefore expect sales $/SF to be strong during January.

The average under contract price for normal listings is $302 per sq. ft. The average for (the very few) lender owned homes is $203 per sq. ft and short sales average $236 per sq. ft.

Area Reports - January 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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