Yesterday, a neighbor asked me which real estate theory I subscribed to, and I had to chuckle because I’d just been thinking about a couple of the different scenarios that have been thrown around over the past couple of years. First there was the “W“, where prices drop, creep back up, and then fall again. Then, there was the “L“, a deep fall, with home prices bumping along the bottom for a while, some said for years.
In the Phoenix metro area, we’ve experienced three real estate markets for well over a year. The question prompted me to look more closely at the Scottsdale sales prices over the past several years.
From the chart below, you can see that prices were static and topping out in 2007, with a steady decline until late 2009. Look at how flat pricing has been this year, with the average sales price for the city, as a whole, hovering around $175 per square foot, after spending most of the 2007 at almost $300 per square foot.
Scottsdale homes cover a huge price range. As of today, condos listed in the Arizona Regional MLS range from $34,000 in South Scottsdale to $4,599,000 at the Scottsdale Waterfront. Single family homes start at $89,000 in South Scottsdale, and top out at $15,000,000 in Estancia in North Scottsdale. With that diversity, it only made sense to look at each of the Scottsdale zip codes, to see if all price ranges were behaving similarly.
Starting with the South Scottsdale zip code of 85257, you can see the same average sales price trend, with a peak of almost $200/sf in 2007 and remaining around $100/sf since late last year.
Moving north to the zip code of 85251, the pattern remains the same, although the peak was higher at $250/sf, and average sale price now hovers just over $150/sf.
Moving just north of downtown Scottsdale to 85250, you can see that both the price trend, high, and lows are all very similar to 85251.
In the 85258 zip code (McCormick, Gainey, and Scottsdale Ranches), the trend remains the same, with the high reaching almost $300/sf in 2007 and dropping to about $200/sf, again in late 2009.
Scottsdale 85254 (which is really mostly in the City of Phoenix, with a Scottsdale mailing address), again follows the same pattern, experiencing a high of about $275/sf in 2008 and staying just below $150/sf since September/October of last year.
In the 85259 zip code are, which is father east of the 101 both north and south of Shea, on the way to Fountain Hills, you see same pattern with a high of almost $300/sf in 2007 and now floating just about $185-195/sf.
Scottsdale’s 85260 zip code sits between zips 85254 and 85259. Same trend, with a high in 2007 of about $260/sf and lows in 2010 of approximately $160/sf.
Farther north into the DC Ranch and Grayhawk communities, average sales prices per square foot was in the $325 range for most of 2007, gradually declining to approximately $220/sf for this year.
Scottsdale 85262 is the largest zip code area of the city and covers much of the ground between Pinnacle Peak Road north to Desert Mountain, east of Pima. Even the higher priced real estate in this area has followed the overall trend, reaching highs around $350/sf, and declining to about $200/sf this year. Interestingly, prices remained fairly high for most of 2008, before steadily dropping off in 2009.
The 85266 zip code was created in mid-2007 and include the area bounded by Pinnacle Peak Road and the Carefree Highway, west of Pima, and includes the community of Terravita. Even with the incomplete data for 2007, it’s easy to see that price decline of 2008 and 2009, with the apparent bottoming out in 2010 at average sales price of about $190/sf.
In putting these charts together, I started wondering which zip codes weathered the dramatic price decreases of 2008-2009. As you can see in the chart below, North Scottsdale price per square foot remains higher than South Scottsdale, but the percent decrease was comparable. From a % comparison, the South Scottsdale zip of 85257 has experienced the greatest decline, while the mid-town zip of 85258 and northern zip of 85255, have declined significantly, but not as much as the rest of the city.
- Scottsdale Home Prices Dropping: Fact, Fiction, or Freaking Out?
- What’s up with Scottsdale home prices? How long is it taking to sell a house?
- Scottsdale Real Estate Update: What’s inventory doing?
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