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Market Reports

Scottsdale Real Estate Update: What’s inventory doing?

by Dru Bloomfield on March 4, 2010

Sitting here at my desk this afternoon, completing the final paper for a house that sold this week, I found myself wondering if the number of houses for sale in Scottsdale has decreased, now that we are into the spring selling season. I’ve been as busy as ever, and I know many other agents are too, so thought it was worth a quick look.

Courtesy of Altos Research, I pulled the following two charts. Looking at the whole of Scottsdale, you can see that the number of single family houses for sale (inventory) has dropped by about 25% since this time last year. However, just looking at the past six months, it appears that the number of homes available has stayed about the same.

All Homes for Sale in Scottsdale

Still a bit curious, I took a look at four Scottsdale zip codes that cover a wide range of house prices, from 85257 in South Scottsdale, to McCormick Ranch in 85258, to DC Ranch in 85255, onto the far north of zip code 85262.  Median home prices in these zips, definitely increase the farther north you go.

As you can see, the higher priced areas have followed the trend of declining (25-30%), and then plateauing in the past six months.  What you see in the lower price ranges, are significantly fewer homes for sale, and a steady supply over the past year.

Homes for Sale in Scottsdale 

What I think I find most amazing in the chart is how few homes are actually for sale in Scottsdale 85257.  Not a lot to choose from, which has to be a positive for home sellers with equity and a well-maintained home!

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Scottsdale Real Estate Market Update – Home Price, Size and Age: What’s the difference between North and South Scottsdale?

by Dru Bloomfield on January 27, 2010

When home buyers arrive in Scottsdale, they often come with opinions about what part of town they want to live in.  Friends or family will say that they should only live in North Scottsdale, where the newer homes are, or they should find something downtown, close to all the restaurants and night life.  Regardless of the local knowledge that they’ve received, buyers quickly see that North Scottsdale, South Scottsdale, and the area they surround all have personalities of their own.  In addition to home prices varying widely, home size and age is also very different.

To give you some sense of the differences, I’ve broken the city down into 3 areas that are defined on the following map.  The red circle encompasses what I will call North Scottsdale, and the purple circle includes South Scottsdale, downtown, and neighborhoods north to Indian Bend Road.  In between, you will find many of the “ranches”, including Scottsdale, McCormick, and Gainey Ranch. (For today, I’ve left out Scottsdale 85254, since this area is mostly located in the city of Phoenix.)

Scottsdale-zip-code-map-regions
In all of the charts you will see below, the light blue line is the average for all of Scottsdale.  The other lines will denote the various zip codes in Scottsdale.

North Scottsdale: 85255, 85262, 85266

Mid Scottsdale: 85258, 85259, 85260

South Scottsdale: 85250, 85251, 85257

The information I’m providing you is taken from homes currently on the market, not all of the homes in the given geographical area.  It will give you an idea of the differences based on the inventory of single family homes for sale in Scottsdale over the past 3 months.

Average Price per Square Foot

The average price per square foot for a home for sale in Scottsdale is currently $260 per square foot.

south-scottsdale-price-sf-jan10

In South Scottsdale, home prices vary from $120 to just over $200 per square foot.

mid-scottsdale-price-sf-jan10

In central Scottsdale, prices currently average $200-245 per foot, while in the northern parts of the city, prices average $260-330 per square foot.

north-scottsdale-price-sf-jan10

As you can see, there has been a steady, gradual decline in home listing prices pretty much through the city over the past 90 days.

Median Home Age

The average age of a home on the market in Scottsdale is surprisingly just under 15 years. south-scottsdale-home-age-jan10

In the southernmost part of the city, homes for sale are older, with a median age of 50 years, while in the area just north of downtown Scottsdale, the median age is closer to 35 years old.

Further north, the median age of homes for sales in the McCormick and Gainey Ranch areas (85258) is 24 years, while to the north (85260), homes are in the 21 year range, and to the east (85259) towards Fountain Hills, the median age drops dramatically to 13 years.

mid-scottsdale-home-age-jan10

In the northern reaches of Scottsdale, the median age of homes for sale ranges from 8-11 years.

north-scottsdale-home-age-jan10

As you would expect, these numbers are pretty static in all zip codes.

Median Home Size

When it comes to home size, the differences between the areas are even more striking.

The median home size in Scottsdale is just over 3200 square feet.  However, in South Scottsdale the median home size is closer to 2000 square feet.

south-scottsdale-home-size-jan10

In central Scottsdale, the median home size varies considerably more, from a median of 2600 square feet for homes between Indian Bend and Bell Roads (85258 and 85260), and jumping  to 3800 square feet east of that area (85259).

mid-scottsdale-home-size-jan10

In North Scottsdale, homes for sale in all zip codes are considerably larger than the city median, ranging from 3600 to 4300 square feet.

north-scottsdale-home-size-jan10

What’s it all mean?

In South Scottsdale, the homes for sale are smaller, quite a bit older, and less expensive. Think affordable. First-time home buyer. Investment. Rental.

In North Scottsdale, homes are much larger, typically built in the past 10 years, and cost considerably more than the Scottsdale average.  Think luxury. Vacation home. Golf get-away. Desert living.

Then, there’s the middle of Scottsdale playing in with the rest of the picture for a diverse Scottsdale home market, providing a little something for anything thinking of buyer in Scottsdale.

Data Source: Altos Research

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Scottsdale Home Listing Prices – What changed in the last 90 days?

by Dru Bloomfield on January 21, 2010

What changed Scottsdale home listing prices in the last 90 days?

Scottsdale-Home-Listing-Price-per-sf

Not much, although it appears that prices, on a per square foot basis, in the least expensive end of the market are still on the decline.  That would explain one of the reasons that lower priced homes in Scottsdale are selling at a faster pace than the upper end.

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Phoenix Housing Market Update and A Few Predictions for 2010

by Dru Bloomfield on January 19, 2010

Bob Bemis, CEO of the Arizona Regional MLS, shared the latest sales figures, including foreclosures and short sales for the Phoenix real estate market on the Channel 12 news this morning.

A real quick overview for you in just about three minutes.

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Stability in Scottsdale Home Prices: I really want to believe….

by Dru Bloomfield on January 3, 2010

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.

Scottsdale-Price-per-sf-2003-2007-2009

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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Scottsdale Real Estate: Some Core Statistics

by Dru Bloomfield on December 7, 2009

It’s been awhile since I checked out the Cromford Report stats for Scottsdale real estate.   I think we are looking for some sign of sustainable, positive change, but for the most part, I think many would agree that holding steady is a welcomed change!

Depending on whether you look at short-term or long-term numbers, there are 9-11 months of inventory (properties for sale) in the city of Scottsdale.  

Scottsdale-real-estate-inventory

The following definitions will help you see the difference between the short and long-term view:

Days Inventory Based on Annual Sales – The number of days it would take to sell all the currently active listings based on the rate of sales over the last year.

Days Inventory Based on Monthly Sales – The number of days it would take to sell all the currently active listings based on the rate of sales over the last month.

It’s important to look at both of these figures, because the monthly sales figures can be inflated or deflated depending on the time of year.  For example, our numbers in November typically taper off, but this year, they were buoyed by the anticipated end of the 2009 First-Time Home Buyer Tax Credit.

Moving on to look at Market Demand, you can see that the landscape is gradually improving.  Supply is still a bit high.  Demand is improving. But, overall the real estate sales environment in Scottsdale appears to be moving in a positive direction.

Scottsdale-real-estate-supply-demand

The definitions the indexes in the chart above are:

Cromford Demand Index™ is a value that provides a short term forecast for the demand position within the market. It is derived from the trends in pending and sold listings compared with historical data over the previous four years. Values below 100 indicate a weakness in demand, while values above 100 indicate a stronger than normal demand. A value of 100 indicates a balanced market.

Cromford Market Index™ is a value that provides a short term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer’s market, while values above 100 indicate a seller’s market. A value of 100 indicates a balanced market.

Cromford Supply Index™ is a value that provides a short term forecast for the supply position within the market. It is derived from the trends in active and sold listings compared with historical data over the previous four years. Values below 100 indicate a shortage of supply, while values above 100 indicate an excess supply. A value of 100 indicates a balanced market.

Price per square foot is one of the truest indicators of home pricing. As you can see here, price continue to depreciate in Scottsdale, but the city has not been hit nearly as hard as many of the other parts of the Valley.  Looking at the monthly averages, you can see that possibly we are at a plateau in average sales price per square foot.

 Scottsdale-avg-price-sf-homes-for-sale

I’d like to make a big conclusion about where are going from here, but for now I will just say "It is, what it is."  One thing I do believe is that the worst is behind us.

Data Source: Arizona Regional MLS/ Cromford Report

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