by Dru Bloomfield on January 1, 2009
Scottsdale Real Estate Market Overview
Scottsdale home buyers are starting out 2009 in a real estate market that is tilted very heavily in their favor. If you click on the chart above, you will get a full-sized version of the report, that’s a bit easier to read. Single family home prices (excluding condos) have fallen and are now stagnated, and it’s taking quite a while (on average) to sell a house.
In the following charts, I’ve shown single family home prices for both 2007 and 2008. I think what is most unexpected in this chart was the notable increase in listing prices. For Scottsdale single family homes, median list prices started surging in fall of 2007 and continued to rise until warm weather hit in April 2008. At this point, sellers dropped prices and held them at these lower levels throughout the summer. This past fall, you can see that prices jumped again, but have tapered off and plateaued.
Scottsdale Single Family Homes - Median List Price Comparison 2007-2008 (Click to see larger chart)
No question that homes are taking longer to sell. Here, you can see that our upward trajectory continues at a steady pace.
Average Days on Market - 2007-2008 Comparison (Click for larger chart)
Inventory (the number of homes on the market) grew steadily throughout 2007, and has continued to fluctuate throughout 2008. You see that the end-of-year figures for 2007 and 2008 are very similar.
2007-2008 Comparison - Number of Single Family Homes for Sale (Click for better view)
Finally, you will see that while the Scottsdale area approached a more balanced market in the spring of 2007, it quickly changed into a very strong buyer’s market. That buyer’s market continued through 2007 and 2008. At times, it’s appeared that the market was improving. Sales were up in the fall, but that momentum does not appear to have been sustained in December.
Market Action for Scottsdale Home Sales - 2007 vs. 2008 (Click for larger view)
It takes a week or so for the previous months sales figures to finalize, and then we will be into the beginning of January. One of the reasons that I like subscribing to the Altos Research reports is that using listing data gives a glimpse of what may be coming.
I’ll post the corresponding charts for condos tomorrow.
Definition of the Market Action Index, courtesy of Altos Research:
The Market Action Index (MAI) illustrates the balance between supply and demand using a statistical function of the current rate of sale versus current inventory. An MAI value greater than 30 typically indicates a “Seller’s Market” (a.k.a. “Hot Market”) because demand is high enough to quickly gobble up available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a “Buyer’s Market” (a.k.a. “Cold Market”) where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will typically cause prices to fall.
by Dru Bloomfield on December 8, 2008
Mike Orr at the Cromford Report continues to publish some of the best real estate sales data around for the Scottsdale and Phoenix areas. Today, I’m preparing a contract for a buyer and wanted to make sure I really had my finger on the pulse what sales prices have been doing in the area surrounding the home the buyers are planning to purchase. In completing my research, I pulled the following information out of one of the reports that ranks median price changes for each zip code in the valley. Here are the rankings for Scottdale single family homes:
Median Price Change by ZIP Code – Sep 2008
Single Family Detached
|
Ranking
|
Zip
|
Highest Annual Median
|
Date of High Median
|
Current Annual Median
|
% Difference
|
|
10
|
85255
|
$810,000
|
Oct-06
|
$716,500
|
-11.5%
|
|
14
|
85260
|
$570,000
|
Feb-08
|
$499,700
|
-12.3%
|
|
19
|
85262
|
$965,000
|
Feb-07
|
$819,500
|
-15.1%
|
|
23
|
85258
|
$651,250
|
Sep-07
|
$550,000
|
-15.5%
|
|
31
|
85257
|
$297,250
|
Jan-07
|
$245,000
|
-17.6%
|
|
32
|
85250
|
$387,500
|
Mar-07
|
$319,000
|
-17.7%
|
|
39
|
85259
|
$836,900
|
Dec-07
|
$680,000
|
-18.7%
|
|
47
|
85254
|
$529,900
|
Oct-06
|
$425,000
|
-19.8%
|
|
48
|
85251
|
$374,225
|
Aug-07
|
$300,000
|
-19.8%
|
|
77
|
85266
|
$960,000
|
Oct-07
|
$721,500
|
-24.8%
|
Based on information from the Arizona Regional Multiple Listing Service between Jan 1, 2001 and Sep 1, 2008 © 2008 www.cromfordreport.com
Probably one of the most interesting findings from this real estate report is that while the number of home sales started decreasing in 2005, most of the median high sales prices occurred in 2007.
by Dru Bloomfield on October 27, 2008
So, is the market coming?
Or going?
I ran the First Responder Run to help the Arizona Autism Support yesterday, planning to run a 5K. Turns out that the 5K and 10K routes shared the same path and I missed the turnaround. Oops! As time progressed, I realized my mistake and decided to flip around, so I wouldn’t hold my family up who was waiting for me at the finish line.
I’ve been training and was really intent on improving my race time, and suddenly my plan was trashed. So I spent some time really enjoying my run and experiencing some of the free-form thinking that comes from being in that space.
Suddenly, I realized that my “mistake” was so similar to some of the real estate feedback that I’m hearing from some buyers who are trying to time the market and buy at the “bottom”. And my question is, have we hit the bottom (in some sense of the word), here in Scottsdale, but maybe missed the signs?
Take a look at this Altos Research chart on for Market Action in Scottsdale. In their proprietary calculation, anything above a 30 signifies a seller’s market. Interesting to see that we in an overall improving market, contrary to what some other areas of Phoenix and the rest of the country may be experiencing.
Changing Scottsdale Market
I have been working with several buyers who’ve decided that now is the time to buy and are closing this week. One is a first-time buyer, another is purchasing a vacation home, and yet another is relocating to the area for a new job. Other first-time home buyers and investors are still looking, knowing that now may be an ideal time to negotiate and buy. As one buyer said last week, even if the market trends downward for a bit longer, I’m planning on staying here long enough, that it doesn’t really matter to me.
So, the more important question to ask “Is now the right time for you to buy a house, a home, or an investment?” Opportunities exist in any market, and only you can make the decision that is truly right for you.
by Dru Bloomfield on September 16, 2008
photo credit: wadem
As human beings, we have two sides to our brain. Simplistically, I call them the thinking and feeling sides. One side we use to crunch numbers, and the other we use to enjoy an aesthetically pleasing (or not) piece of art.
When I work with home buyers, I remind them to use both sides of their brain when purchasing a home.
To purchase a home, there’s a lot of number crunching that goes on. Especially in this market, where a home buyer wants to be sure they are paying a price that will hold up in our changing economy and real estate prices are impacted both directly and indirectly by many factors. Sometimes, it’s easy to get caught up in the decision making process on which home is the best buy, considering location, price, financing terms, and much, much more.
On the other hand, home buyers actually have to live in the property they purchase, so it’s really important that they like (or love) the home they are purchasing. After all, it’s where they are going to be waking up most mornings!
Several years ago, I was working with a younger first-time home buyer. Her mother had flown out to assist her in her selection. We all worked well together and narrowed the possibilities down to two condos in the same complex.
At decision times like this, it can be very overwhelming for a buyer. They are often often asking (many) others for opinions and recommendations. The noise is their head can get very loud, making it tough to know what is right for them.
The buyer and I met again to write a contract, and she was still torn as to which condo to purchase. In this particular case, I asked her one simple question, “Which house did you imagine waking up in this morning?” She smiled, and gave me her immediate response. It was not the one her advisers had been giving her, but it was the one that was right for her.
In the past two weeks, I’ve written a number of contracts for buyers. In two cases, there was one particular room in the home, that each buyer walked into, and connected with. You could see it in each of these buyers’ eyes. And, it wasn’t anything that we could necessarily search for in the MLS system. It wasn’t the fact that it had a great view, or an open kitchen. It was that each of these buyers could see themselves in the home of their choice. Plain and simple, they were looking for a space to live in, to accomplish their goals, to feel fulfilled.
So, when you are searching for a home on-line, know that this is just the starting point. Unless you are an investor, who is looking totally at cash flow and the bottom line, you will want to find a house that works for you, both financially and aesthetically. Even if the home is a fixer-upper, but has great bones, seeing yourself living there is a critical part of the process when selecting your next home.
Dream a little, work the numbers, and then decide.
by Dru Bloomfield on September 12, 2008
Everyone is looking for a change in the local real estate market. Yesterday, I got a call from a TV reporter asking if I was taking buyers to look at homes in the afternoon, as she would like to interview us. The gist of the interview of the buyer was to be, “Why are you buying now?”, and the catalyst for the subject was the latest ASU real estate research.
I was not able to meet with the reporter since I was already committed to a board-related meeting, but the phone call reminded me that I have been challenged finding a home for one of my buyer clients. Either the home is wrecked and overpriced, or it’s priced well and under contract before we can get to see it. A slight exaggeration, but definitely a view of both ends of the spectrum.
Yesterday’s call did prompt me to email my database of potential home sellers in South Scottsdale. For the most part, homes that are in my client’s price range will be in the zip code 85257, but there are a few in both 85251 and 85250. I’ve done all sorts of searches, being as creative as possible, to make sure my client has seen what is available in Scottsdale’s real estate market. So, I sent this email went to home owners in this area, seeing if we could find someone who’s been sitting on the fence, or maybe just found out they are being transferred to another part of the country.
I’ve been working with a well qualified, first-time home buyer, who is looking for a 3+ bedroom home in Scottsdale. Pool is optional, but a nice backyard is important. She can do a little fix-up, like paint and carpet. The kitchen layout is really important to her, as she wants to be able to cook, while still being able to converse with her guests.
Her preferred price range is $175,000 to $200,000.
In the past, you’ve contacted me to do a quick home valuation. Looking through my records, I see that your home might be a possibility, and am contacting you for that reason.
Please call or email me, if you might consider selling at this time and your home is in a condition that matches my client’s preferences.
We’ll see if I get any responses. If you have a home that you’ve been thinking about selling, or know someone who does, and it matches my client’s needs, could you call or email me?
Thanks!
