Market Data - June 2016
Our market report analyzes single family homes priced from $500,000 upwards in all areas of the Northeast Valley, including Scottsdale, Paradise Valley, Arcadia, Biltmore, Carefree, Cave Creek, Fountain Hills and Rio Verde.
During May the supply of active listings over $500,000 saw its first significant decline since July 2015. On June 1, there were 3,358 homes offered for sale, down 8% from the 3,637 we saw on May 1. This was partly due to a large number of cancelled listings. It still leaves us with 14% 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 wane from June onwards. 98% of active listings are normal with 48 short sales and 13 lender-owned properties. The dip in supply was consistent across all price ranges.
Demand – Sales
There were 398 closed transactions though ARMLS during May 2016, up 8% compared to May 2015. The healthiest growth over May 2015 was for the price range $600,000 to $800,000 (up 32%). Sales over $1.5 million also saw moderate growth over May 2015 (up from 58 to 73). However the range between $1 million and $1.5 million was the weakest we have seen since 2011. There were 13 sales of $3 million and over which is an improvement over the 11 in May 2015
Demand – Under Contract
We can anticipate future sales by looking at homes under contract. The number of listings under contract was 614 as of June 1, which is little changed from last month but up 19% from June 1, 2015. This is a positive sign and most price ranges are higher than last year. The major exception is the range over $3 million which dropped from 22 to 13, but the range from $800,000 to $1 million was also down from 88 to 84. Normal sales comprise 96% of luxury homes in escrow, up from 93% 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 $265 per sq. ft. which is an increase of 21%. However luxury home pricing peaked in August 2015 and has been on a slow weakening trend since then. The 12 month average pricing is $2 per sq. ft. lower than it was a year ago in May 2015. The six month moving average stands at $272, the same as last month and also the same as last year. The 3 month average stands at $267, down $2 from May 2015.
Although demand remains good, the 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 $258, 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 $193 per sq. ft and short sales average $212 per sq. ft.
Area Reports - June 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.