Market Data - November 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.
As expected, October saw plenty of new listings being added and on November 1, 2016 we have 3,007 active listings over $500,000. This is 9% more than last month and 7% more than last year at this time. We can expect supply to grow substantially between now and April 2017, with a temporary dip during December. 98% of active listings are normal with 48 short sales and 12 lender-owned properties. The increase in supply was fairly consistent across all price ranges, although the range between $2 million and $3 million showed the largest annual percentage rise at 16%.
Demand – Sales
There were 319 closed transactions though ARMLS during October 2016. This is a strong number, the highest October total since 2005. They were up 16% from October 2015. However all of this increase was thanks to price ranges over $800,000. Sales were flat between $500,000 and $600,000 and between $600,000 and $800,000 they fell by 11%. Sales more than doubled over $2 million and the total of 12 homes over $3 million was the highest October total we have ever recorded. The previous record was 10 in both 2004 and 2005. These changes mean that the sale mix swung in favor of higher priced homes, which tends to push price averages higher.
Demand – Under Contract
We can anticipate future sales by looking at homes under contract. The number of listings under contract was 415 as of November 1, which is up 17% from November 1, 2015 but down 7% from last month. This is another positive sign and all ranges except homes over $3 million are higher than last year. Given the high sales count for this highest range last month, a drop in listings under contract is to be expected. Normal sales comprise 94% of luxury homes in escrow, up from 90% 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. Since the market low of $219 in 1Q 2012 we have seen the 12 month average move upwards to around $267 per sq. ft. which is an increase of 22%. However luxury home pricing peaked in August 2015 and had been on a slow weakening trend until this month. The strong showing by homes over $1 million in the October sales has reversed that trend, at least temporarily. The 12 month average pricing is $3 per sq. ft. higher than it was a year ago in October 2015. The six month moving average stands at $262, up from $258 in October last year. The 3 month average stands at $261, which is up $11 from October 2015.
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 October 2016 it has made no consistent moves in either direction and as of November 1, the average still stands at $257, the same level as last month and 2.5 years ago. This suggests that sales prices will continue to move sideways in the near future. This implies that the more favorable average pricing that we saw in October was primarily due to a change in mix away from the lower price segments, rather than an improvement in pricing across the board. The average under contract price for normal listings is $262 per sq. ft. The average for (the very few) lender owned homes is $197 per sq. ft and short sales average $187 per sq. ft.
Area Reports - November 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.