Market Data - September 2018

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.

Supply

On September 1, 2018 we had 2,296 active listings over $500,000. This is a 3% decrease from last month. We have 10% fewer listings than we saw on September 1, 2017 and the lowest number of active listings since September 2015. Luxury listings are still in relatively good supply compared with the rest of market. However, we have seen reductions over the past 2 years and the supply trend is now moving clearly downwards rather than up as it was between 2014 and 2016. This downward trend has also gained momentum over the past few months. However, the price-range over $3 million is up 3% compared to a year ago, in contrast to the range between $2 million and $3 million which is down 22%. Every other luxury price range has fallen by at least 6% year-over-year. That between $500,000 and $600,000 is down 13%. 98% of active listings are normal with 29 short sales / pre-foreclosures and 13 lender-owned properties. Normally luxury listing counts reach their minimum at the beginning of September and then rise until April and we have no reason to believe this year will be any different.

Demand – Sales

August 2018 gave us 447 closed transactions though ARMLS. This is a strong 28% rise from August 2017, when we saw 348. It is the second highest August total in history for the Northeast Valley luxury market, but short of the previous record of 507 in 2005. We have now experienced 9 very strong sales months in succession. Every price range saw an annual increase over August 2017 except for homes over $3 million which only managed 7 (13 last year).  The sector with the highest increase over last year was that between $2 million and $3 million, up almost 37% from 19 to 26. The range from $600,000 to $800,000 was also strong with an increase of over 36%.

Demand – Under Contract

We can anticipate future sales by looking at homes under contract. We started September 2018 with 501 listings under contract, which is down 2% from the 509 of September 1, 2017. This is the first percentage decrease for quite some time and suggests that year over year sales growth may not be quite so vigorous in September and October. The weakness is concentrated in the low end from $500,000 to $600,000, down 33% from 139 to 99. The range from $1 million to $3 million is looking very strong, up 35% from 128 to 173. The price range over $3 million dropped from 17 to 15. Normal sales comprise 96% of luxury homes in escrow, the same as last year.

Sales Pricing

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 $277 per sq. ft. which is an increase of 26%. Luxury home pricing first peaked in August 2015 when the twelve-month average price per sq. ft. hit $269 and finally exceeded that level 8 months ago. The twelve-month average currently stands at $277, up 3% from $270 in August 2017. The six-month average has climbed to $278, up from $269 in August 2017 and the three-month average stands at $270, up from $264 in August 2017.

Overall luxury pricing has established a rising price trend again over the last 8 months, having moved sideways between 2015 and 2017. However, there has been little change between May and August 2018 thanks to the usual seasonal pattern in which the third quarter is weak.

Under Contract Pricing

We have seen a slight rise in sales pricing over the past 12 months, but little progress in the last 3 months. Under contract pricing is showing an increase over the past month, so we may see slightly stronger sales pricing next month. This is a common seasonal pattern.

The average under contract price for normal listings is $284 per sq. ft. The average for (the very few) lender owned homes is $180 per sq. ft and short sales average $209 per sq. ft.

Area Reports - September 2018

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.

Paradise Valley

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Scottsdale

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Arcadia

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Biltmore

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Fountain Hills

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