Market Data - July 2016
We are looking at single family homes price 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.
We usually see a steep decline in active listings over $500,000 during June each year. This year is no exception and on July 1 there were 2,966 homes offered for sale, down 12% from the 3,358 we saw on June 1. This was due to the sales that closed during June plus a large number of cancelled listings. It still leaves us with 17% more active inventory than we had last year at this point, which is enough to cause prolonged problems for many sellers, particularly as demand tends to slow during the third quarter. 98% of active listings are normal with 47 short sales and 10 lender-owned properties. The dip in supply was consistent across all price ranges.
Demand – Sales
There were 416 closed transactions though ARMLS during June 2016, up 12% compared to June 2015. This is the highest sales count for June since 2006. The primary driver of this increase was the segment between $500,000 and $1 million. The segment between $1 million and $2 million saw moderate growth. Over $2 million the market was very weak, with sales down 46% between $2 million and $3 million and down 56% over $3 million. There were 7 sales of $3 million and over which is unusually low for June, usually one of the strongest months.
Demand – Under Contract
We can anticipate future sales by looking at homes under contract. The number of listings under contract was 504 as of July 1, which is up 4% from July 1, 2015. This is a positive sign and four out of seven price ranges are higher than last year with $500,000 to $600,000 up 17% and $2 million to $3 million up 33%. The range from $800,000 to $1 million was the worst performer, down 11% from 91 to 81. Normal sales comprise 94% of luxury homes in escrow, the same percentage as a year ago.
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. Over the 4 years since the market low of $219 in early 2012 we have seen the 12 month average move upwards to around $263 per sq. ft. which is an increase of 20%. However luxury home pricing peaked in August 2015 and has been on a slow weakening trend since then. The 12 month average pricing is $6 per sq. ft. lower than it was a year ago in June 2015. The six month moving average stands at $268, down from $272 last month and $272 in June last year. The 3 month average stands at $264, down $11 from June 2015.
Although demand remains good under $2 million, an excess of supply is preventing prices from moving up and causing them to weaken in some of the outer areas of the Northeast Valley.
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 December 2015 it made no consistent moves in either direction but it jumped to $270 as of January 1, 2016. This was the highest it has been since the peaks of the housing boom. However as of June 1, the average has fallen back to $259, a similar level to 2 year ago, suggesting that sales prices will continue to move sideways in the near future. The average under contract price for normal listings is $262 per sq. ft. The average for (the very few) lender owned homes is $156 per sq. ft and short sales average $220 per sq. ft.
Area Reports - July 2016
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.