A couple weeks ago I spotted an interesting trend on one of the charts at the Cromford Report. You can see on the chart below that investors have been purchasing an increasingly larger percentage of single family homes over the past several months, to the point that they are on the verge catching up to (and potentially passing) the percentage of condo purchases.
- Click on chart to see larger view
Thinking about the trend, I decided to look a little bit closer at the Scottsdale market, to give you a feel for the differences in the single family home and condo markets in Scottsdale. You can see below that both types of housing continue to experience price reductions. Looking at this chart, comparing price per square foot, you can see that single family home list prices are down 7-8%, while condos are down by almost 10%, over the past year.
Click for a better view
You can also see that it’s taking significantly longer to sell a home. From a median of 95 days at his time last year to almost 160 days in today’s market. Condos have fared better, increasing from 90 days to 115, but it’s still an increase in selling time.
Clich chart for larger view
Digging a little deeper, I found this surprise though. As you can see in the Median New Listings Chart below, the number of new listings has really dropped off since November. Typically, I would have expected to see an increase right after the first of the year. Instead, we are continueing to see a steady drop off. I’m not sure this trend will hold, but it’s definitely worth keeping an eye on, as it will have an impact on the market.
Click chart for clearer view
I’m not inclined to make any specific predictions here. So many variable exist in the market, yet I do think that there are some interesting opportunities in Scottsdale for investors. Home prices are dropping. Scottsdale is impacted by what occurs in the surrounding Phoenix metropolitan area. At the same time, it’s city that has international name recognition. I do believe that this perception, coupled with the fact that the city is essentially built out, will help to insulate some of the extreme depreciation that we have seen in other parts of Phoenix.
There are stable real estate markets all over the country, and it’s just a matter time before we see things settle down here.
{ 4 comments… read them below or add one }
I like the recovery of the single family homes at the end of the chart; let´s see how it continues.- Thanks the post
You are welcome. The single family homes aspect is very interesting. I have a couple lender-owned homes that are in the $30,000 range, which is totally amazing to me. I’m definitely seeing cash flow opportunities on the market now.
Dru Bloomfield’s last blog post..Scottsdale Market Update: Condos vs. Single Family Homes
Thanks for the charts. Very interesting about the downturn of listings at the beginning of the year. It looks like a glimmer of hope…
Claudia Jordan’s last blog post..Rio Verde Foothills Open House Tours
Claudia, I think there are quite a few indicators that we are recovering. It’s may be a long tough road, but with the number of homes currently under contract, some of our excess housing inventory really is being scooped up.
Dru Bloomfield’s last blog post..Scottsdale Market Update: Condos vs. Single Family Homes