Market Data - July 2017
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 July 1st, 2017 we have 2,767 active listings over $500,000. This is 13% fewer than the 3,189 we saw last month. Luxury listings are still in plentiful supply compared with the rest of market. However, this latest total represents 7% fewer listings than we saw in July 2016 and the trend is moving in favor of sellers. We expect the active listing numbers to decline further over the next 2 months until we reach a low point on September 1st. 98% of active listings are normal with just 32 short sales and 13 lender-owned properties. The significant reduction in supply was consistent across all price ranges.
Demand – Sales
There were 495 closed transactions though ARMLS during June 2017. This is a 16% rise from June 2016, when we saw 425. It is the second highest June total in history, beaten only by 2005 (with 640) at the height of the housing bubble. Most of the price ranges saw higher sales than in June 2016, however the range between $500K and $600K fell 12%. There were 11 homes over $3M, down from 25 in May, but up from 7 in June 2016.
Demand – Under Contract
We can anticipate future sales by looking at homes under contract. The number of listings under contract was 511 as of July 1st, which is up 2% from the 503 of July 1st, 2016. The increase in the number of listings under contract is very much smaller than the increase in closed sales, suggesting that on average, listings are spending less time in escrow than last year. Some listings are being added to the MLS as they are closed. This implies they were not actually marketed through the MLS but are being claimed by the agents retrospectively. The price range from $600,000 to $1.5 million showed the largest percentage growth in listings under contract. The ranges from $500,000 to $600,000 and from $1.5M to $3M declined while other ranges were relatively flat compared to last year. Normal sales comprise 98% of luxury homes in escrow, up from 94% 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 $269 per sq. ft. which is an increase of 23%. However luxury home pricing peaked in August 2015 when the 12 month average price per sq. ft. first hit $269 and we have so far not seen any move higher than that. The 12 month average since September 2016 has been very stable at $266 to $269 per sq. ft. and is currently just $6 higher than a year ago. The six month moving average stands at $273, up $5 from $268 in June 2016 and the 3 month average now stands at $274, up $9 from $265 in June 2016.
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 quickly and reached a peak of $257. Between March 2014 and May 2017 it has made no consistent moves in either direction. As of July 1st, 2017, the average stands at $257, just $6 higher than last year and still well shy of the peak of $264 set in January 2016. This suggests that sales prices may continue to make a little progress in the near future but it is likely to be slow going. The average under contract price for normal listings is $258 per sq. ft. The average for (the very few) lender owned homes is $280 per sq. ft and short sales average $193 per sq. ft.
Area Reports - July 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.