This past year has been one of contradictions in the Phoenix metropolitan real estate market, with multiple offers and frustrated buyers in the lower-priced ranges, and slow sales and frustrated sellers in the price range above $350,000.
Scottsdale has not seen as much of the manic sales activity as much of the rest of the valley has, if only because homes prices, on average, are higher.
Today, I pulled a Cromford Report chart which compares Monthly Average Sales Price on a per square foot basis, which I think gives a truer picture of the market.
Below, you will see the comparison for 2003 where prices first started inching their way upward, for 2007 where prices peaked early in the year, and then f0r 2009 where we’ve continued to see decreases which are approaching 2003 levels.
When you look at the recent activity in the first half of 2009, prices were still depreciating at a significant pace, but towards the middle of the year, prices stabilized. This trend really does seem to have held through the last half of the year.
And now, it’s a new year, and like most people around me, I feel optimistic. When I see data like this, I do really want to believe that the Scottsdale housing market is stabilizing. At the same time, it’s easy to make generalizations from data because it clumps many markets into one.
There are many sub-markets issues that contribute to the overall picture, like:
- The foreclosure situation, which some say is over-rated and others believe that we’ve got two more years of working through the backlog.
- Short sales will probably be with us even longer. I’ve heard some say that they will be a significant portion of the Scottsdale real estate market for the next five years.
- FHA lending requirements are changing. We do not know exactly what the changes are, but all indications are that buyers will be scrutinized more than ever. We do hear that FHA loans for the condo market are being squeezed out.
- Jumbo loans (greater than $417,000) are available, but still tough to get, especially for self-employed buyers.
- Loans for Canadian buyers have been challenging, too. Some buyers from Canada have discovered it’s easier to take out a home equity line on their Canadian residence and pay cash here.
So… with all the realities of the lending markets, the challenges of short sales, and the heartbreak of foreclosure, I do believe that there’s still a glimmer of hope. As long as we live in a free market, demand is going to have an impact on pricing, and I do believe that it will help maintain the recent price stabilization that we’ve seen in the latter part of 2009.
Phones are ringing, contracts are being written, buyers are buying. That’s a great way to start off 2010. Let’s see where this year takes us!
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