Market Data - June 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 June 1, 2017 we have 3,189 active listings over $500,000. This is 9% fewer than the 3,502 we saw last month. Luxury listings are in plentiful supply compared with the rest of market. However this latest total represents 5% fewer listings than we saw in June 2016. April is usually the annual peak for supply so we expect the numbers to decline over the next 3 months until we reach a low point on September 1. 99% of active listings are normal with just 34 short sales and 10 lender-owned properties. The significant reduction in supply was consistent across all price ranges.
Demand – Sales
There were 500 closed transactions though ARMLS during May 2017. This is a huge 30% jump from May 2016, when we saw 385. It is the second highest May total in history, beaten only by 2005 (with 543) at the height of the housing bubble. Most of the price ranges did well, with the range between $800K and $1M up 93%. However sales between $1.5M and $2M dropped 30% while those between $2M and $3M fell 26%. Homes over $3M made up for this weakness with 25 closed sales, more than double the number in May 2016 and matching the previous record in May 2006.
Demand – Under Contract
We can anticipate future sales by looking at homes under contract. The number of listings under contract was 626 as of June 1, which is up 2% from the 613 of June 1, 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 $2M declined while other ranges were relatively flat compared to last year. Normal sales comprise 98% 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 around $268 per sq. ft. which is an increase of 22%. However luxury home pricing peaked in August 2015 when the 12 month average price per sq. ft. 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 $3 higher than a year ago. The six month moving average stands at $273, the same as in May 2016 and the 3 month average now stands at $274, up $7 from $267 in May 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 June 1, 2017, the average stands at $256, just $4 higher than last year and still well shy of the peak of $264 set in January 2016. This suggests that sales prices may be able 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 $203 per sq. ft and short sales average $185 per sq. ft.
Area Reports - June 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.