Market Data - July 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.
On August 1, 2019 we had 2,266 active listings over $500,000. This is a 13% decrease from 2,609 last month and a larger decline than we saw last year. We now have 4% fewer listings than we counted on August 1, 2018. The price ranges over $2 million have 11% more supply than last year with 505 active listings, up from 456. The supply of homes between $500,000 and $2 million has dropped 10% from 1,947 to 1,761. 99% of active listings are normal with 20 short sales / pre-foreclosures and 11 lender-owned properties. Normally luxury listing counts fall sharply between May and September every year and we are following that pattern once again in 2019.
Demand – Sales
Sales have been exceptionally strong since March, and July set a new high once again, despite it being a traditionally a slow month for luxury sales. July 2019 gave us 501 closed transactions though ARMLS. This is up 15% from July 2018, when we saw 437. 2019 has set a record high for April, May and July sales. Sales over $1 million were the strongest by comparison with the July average, totaling 143. The previous record was 132, held by 2005. Homes under $1 million also broke the previous record, reaching 358 versus 347 in 2005.
Demand – Under Contract
We can anticipate future sales by looking at homes under contract. We started August 2019 with 592 listings under contract, which is higher than the 591 of August 1, 2018 by the slimmest of margins. This is a weaker comparison than last month. Above $3 million we now have more homes under contract (21) than we have seen at the start of any previous August, although the range between $1 and $3 million is down compared with last year. The under-contract count for the range between $600,000 and $1 million is up to 289 compared to a year ago when it was 260. This data suggests that August sales are likely to be similar to last year, but with more homes over $3 million. Normal sales comprise 97% of luxury homes in escrow, up from 96% 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 $290 per sq. ft. which is an increase of 32%. Luxury home pricing first peaked in August 2015 when the twelve-month average price per sq. ft. hit $269 and finally exceeded that level again in August 2017. The twelve-month average currently stands at $290, up 5% from $277 in July 2018. The six-month average has climbed to $299, up from $281 in July 2018 and the three-month average stands at $297, up from $278 in July 2018.
Overall luxury pricing has established a firm rising price trend again over the last 2 years, having moved sideways between 2015 and 2017. This trend has been helped by the growing number of transactions over $2 million.
Under Contract Pricing
We have seen a rise in sales pricing over the past 18 months, but under contract pricing had been showing little movement until last December when we saw an abrupt rise to $300 per sq. ft. This reflected 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. At the start of August our figure is back down to $288. We therefore expect sales $/SF to decline slightly over the next month, something that often occurs during the third quarter.
The average under contract price for normal listings is $290 per sq. ft. The average for (the very few) lender owned homes is $205 per sq. ft and short sales and pre-foreclosures average $243 per sq. ft.
Area Reports - July 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.