Yes, I think the Scottsdale real estate market is insane. And not just Scottsdale, it’s Phoenix, Chandler, Mesa, Gilbert, and all the rest of the Valley of the Sun.

I’ve been working like a maniac for the month of March, and have seen so much craziness.  I feel for buyers who are totally challenged to find a home in our low inventory situation, and then who have to overbid to get one of the very few homes available.

Sellers on the other hand are starting to come out of the closet. And being surprised to find that they may not have to give their home away. That they actually have a product, their home, that’s in demand.

It’s total craziness.

For example:

• One of my home buying clients sent me their short list of homes on Friday afternoon, so I can set up showings for Saturday. I schedule the showings, and then Saturday morning, I check the MLS, just to make sure that all of the homes they wanted to view were still available. Three of the six homes they wanted to see were under contract, overnight.
• This same client now jokes cynically that if a house has been on the market over 20 days, there just must be something wrong with it.
• Another home buyer is telling that searching for her first home is like another full time job. Her frustration level has escalated, too.

Sellers, on the other hand, are calling the shots.  Setting a price to today’s market, one that’s realistic for the home’s condition and location, will almost guarantee multiple offers.

• Last night, I called to set up a showing for a Scottsdale home that went on the market a couple days ago.  The first allowed showings were for today.  As of last night, the selling agent said he had ten showing appointments scheduled for today, and that three buyers were ready to make offers, sight unseen. He was sure that the house would sell for over list price.

If that isn’t insanity, what is?

On the plus side, home prices are appreciating. Sellers who thought they would have to short sale,  and aren’t terribly “under water” can see that some day they may have a home with some value.

• I was able to help a seller last month, who thought she was going to have to short sale her Scottsdale townhouse.  We priced the home so that she could walk away without have to bring any cash to the closing table.  She got her first offer within days, and when the home didn’t appraise, she took a second offer that did appraise over the very same price two weeks later!
• And for another potential home seller, who thought she was going to have to short sell, we found that the estimated selling price of her home increased over 5% in just a couple weeks.

Nuts!

Some of my comments here are tongue-in-cheek. But, seriously, buying  a home should really be a highlight, not a chore, or a battle, or even a second job.

If you’re a home seller, call me! Let me tell you what I think the value of your home is today. And then, give you some ideas of what the market is doing in your neighborhood.

If you are a home buyer, yes, please call me, too. I will counsel you on what you need to do before you start your home search, and then also on strategies to get your offer accepted.

The real estate market is always changing, here in Scottsdale, as well as the rest of the world. We were hoping for a balanced market and looked how quickly it’s changed back to a seller’s market. And in only seven short years.

Amazing!

The number of homes for sale in Scottsdale has remained much more stable than other parts of the valley.  Due in part the the typical sales price of a Scottsdale single home, which is higher than all other cities in Phoenix Metro.

What I think is most interesting to note in this chart is that it shows that the inventory (i.e. number of homes actively for sale) for Scottsdale single family homes, is the dominated by typical homes for sale.  Green are the normal sales, blue signifies short sales, and red denotes lender-owned/REO properties.

Most buyers, just getting started, assume that they are going to get their best deal buying a foreclosure or a short sale. But as you can see, there just aren’t many on the market. And since the demand for these properties is high, it can make it difficult to purchase at previous bargain prices.

In our market, multiple offers are very common. And the number of days that it’s taking to sell a house is dropping like crazy. In Scottsdale, the typical days on market has dropped from 172 to 127 in the past year. Two years ago, Scottsdale had a 11-month supply of housing inventory, and today, it’s just 6 months.

So with the dominance of normal single family homes for sale in Scottsdale, as well as the steady supply, it makes sense for buyers to really focus on their needs and wants, regardless of the type of  listing it is.

For some tips home buying in Scottsdale, you can watch these short videos:

• First Steps for Scottsdale Home Buyers

• You found the perfect house – now what?

• Home buyers ask: “What happens after my offer is accepted?”

Scottsdale has more than its fair share of beautiful homes. If you’d like to take a quick look at what a million dollars will buy you in Scottsdale real estate, I invite you to my Facebook page for At Home in Scottsdale.

If you haven’t “Liked” my Facebook page before, you’ll have that option.  Once you Click the Like button, you will land on a page with links to million dollar homes in downtown, central and north Scottsdale.

And, if you’ve already Liked my Facebook page, just click on the Welcome tab in the left hand column, and go to the same million dollar listings page.

Easy. Always available. And current, with only property listings that are really still on the market.

The dots in this chart above reflect the number of Scottsdale home sales in the previous 12 months. From cumulative sales of 5,086 in January 2001, to a peak of 6,915 in March 2005, and then a valley of 2,938 that extended from February 2008 to April 2009, the total number surpassed the 5,000 mark in November 2011.

Definitely good news for local real estate.

Taking a closer look, you’ll see that the Scottsdale real estate market has a seasonal fluctuation that peaks in the spring selling season.  Here you can see that from 2001 through 2011, the peak selling months in Scottsdale initially averaged about 600 home sales, peaking in 2003 at about 750, plummeting to a peak of just over 300 in 2007, finally approaching “normal” as of 2011.

2012 just may be the year that 600+ homes are sold in the peak month.

With the huge amount of business that seems to be flowing to me and the other agents that I work with in Scottsdale and the surrounding cities, it seems that this spring is could be a significant turning point in our market.

We can hope!

From a broader perspective, the trend is definitely to the positive, with a few intermittent months of plus-side appreciation, but still running in the negative overall.

Sellers need to keep this perspective in mind as they list their homes to sell in over the next couple of months.  Spring is Scottsdale’s biggest selling season and buyers are definitely keeping on top of the market. Writing offers that hold tight to what their perception of the local real estate market is today.

During the past four days, 45 single family homes were listed in Scottsdale:

Scottsdale Single Family Homes – New to Market Listings

and 41 price reductions took place:

Scottsdale Single Family Homes – Price Reductions

Many people assume that real estate transactions slow down over the holidays, but in reality, the sellers that are listing over the holidays are motivated, and so are the buyers. As of this morning, 12 new contracts are showing up for Scottsdale in the MLS, and that number will probably increase as the day goes on.

So while the rest of the country focuses on the retail markets, maybe it’s really time to focus on real estate, and you can start your Scottsdale Real Estate Search here!

However, there are a couple challenges with foreclosures right now.

1. There just are not very many foreclosures (REOs) on the market Scottsdale.
2. Banks are shifting from foreclosures to short sales, because they tend to lose less on this type of sale.

If you look around the Greater Phoenix area, and compare distressed sales by city, Scottsdale definitely has fewer lender owned sales (as a percentage), than all other cities, except Anthem, Sun City West, and Sun Lakes.   If you add in short sales, the cities with less fewer total distressed sales include the three cities mentioned, plus Gold Canyon and Sun City.

When you look at the October 2011 statistics for Scottsdale Single Family Home sales (below), you see that of the a very small percentage of homes listed for sale are lender owned foreclosures.  With only 107 foreclosures listed as of November 1st, and 75 sold in the prior month, it’s clear that the supply of lender owned properties is dwindling in the city.

Here’s a quick look at the home market composition for Scottsdale 85250, located just north of Fashion Square and south of McCormick Ranch. As of the beginning of the month there were approximately 40 homes with foreclosures pending, where notice has been filed, but the sale has not occurred. Some number of these homes are certainly listed in the local MLS as short sales. The number of pending sales is down by 50% since the beginning of the year.

Looking at the number of homes where the banks have foreclosed (REOs), but have not been listed on the market yet, you’ll see there a grand total of five as of the first of the month. Miniscule.

Next, you’ll see the number of homes that are actually listed for sale on the MLS as foreclosures.  Again for the Scottsdale 85250 zip code. Five single family homes are currently available for sale as of the first of the month.

Looking at foreclosures that are under contract, you’ll see there are four. Not a huge number at all, and I would bet that most of those properties receive multiple offers on them.  The competition for the dwindling supply is fierce.

Going through the rest of the Scottsdale zip codes, moving from south to north, you’ll see that the situation is for the most part very similar.

Starting in the South Scottsdale zip code of 85257, you can see that REOs supply is way down, with only 10 single family homes listed as of the first of November, and 20 more that are not yet listed. With a combined total of 80 homes last year at this time, it’s clear that the supply of REO properties is dwindling here.

Next, in the Scottsdale zip code 85251, there are 5 bank-owned single family homes on the market, with twelve more that haven’t been listed yet. Supply is also much lower than at the beginning of the year.

Bank-owned activity in central Scottsdale (85258) has been more sporadic, but definitely on a downward trend, but consistently very low, hovering around 5 active REOs, and 5 unlisted REO’s.

Further north, in Scottsdale 85254, the number of available foreclosures is fewer than 20, and has been decreasing rapidly over the past year.

Around the Scottsdale Air Park, REO’s show an even more striking downward trend, also showing a cuurent cumulative total of about 20 units.

Even the affluent, Northeast Scottsdale zip code of 85259 is seeing a dramatic decrease in lender-owned listings and (hopefully) soon to be listed properties, which currently number about 20.

In North Scottsdale zip code 85255, The number of active lender owned listings has decreased over the year, however, total number of active and unlisted REOs, about 60, has remained fairly steady throughout the year. Very much the exception to what is being experienced in the rest of the city.

Finally, both of the two northernmost Scottsdale zip codes of 85262 and 85266, are also experiencing a decrease in lender owned homes. As of the 1st of November, only 15 REOs were listed, with 20 more taken back by the bank, but not yet listed.

All in all, it’s an encouraging story. And, with the banks focusing more on short sales, I think 2012 is going to be a year of positive change for the Scottsdale real estate market. Buyer will shift their focus from the foreclosure market and begin looking much more seriously at short and typical sales. Definitely seems like a step towards a more normal (and healthy) market.

View current Scottsdale Foreclosures for Sale.

More on the Scottsdale real estate market

• “Wish I could say Scottsdale home sales prices were holding steady”
• Lots of Home Showings in North Scottsdale
• Having a hard time finding a house to buy in Scottsdale?