So, to answer the question: Is now the time to list and sell your home?

Looking at the past ten years of data for Active Scottsdale Listings, 2010-2011 looks fairly close to mid-range, as compared to the extremely low number of homes for sale in the 2004 and 2005 time frames, when prices were appreciating rapidly and homes were flying off the shelf.  The doldrums of 2007 through mid-2009 are evident, with a  high number of homes listed for sale, and not moving.

Looking at a little more detail, it’s even clearer that we are normalizing, when it comes to the number of homes on the market.  Below you can see the high number of Scottsdale homes listed for sale in 2008, hovering in the 4000 range, and the low inventory levels of early 2005, just before the major real estate market slowdown. By the end of 2005, the number of home on the market had doubled, and in a very short time. The number of homes for sale today, is right in the range of 2002, right before the market went crazy.

Now, looking at just this past year, it’s clear that housing inventory (the number of homes for sale) is declining slightly in Scottsdale.  Lender-owned properties (REO), pre-foreclosures, and short sale comprise about a third of the local listings. The remainder are homes list for sale are “normal”, traditional sales where the negotiations are with the principal, a real person, not a bank.

A normal transaction can be so much more streamlined, that some buyers prefer them to buying a bank-owned property, which must be assumed in AS-IS condition, with virtually no recourse if something major is uncovered after the sale.  A normal home sale can be lightening fast, when compared to a short sale, which can take months and months.

My most recent listing, a normal sale in Scottsdale, was listed and under contract in 31 days, and since it was a cash transaction, closed very quickly, 16 days after the contract was accepted.  47 days from start to finish.

Spring is a prime time to list your home. If you’re thinking about it, consider moving quickly, and list your home before the hot summer months hit.  Know that there are serious buyers out looking, and with a smaller pool of homes for sale, are looking and acting more quickly when a new listing hits the market.

With four of my listings selling in the last two weeks, I’m ready for additional clients.  If you are thinking of selling this year, and would like a complimentary market evaluation, please call or message me.  My contact info is on the upper right hand corner of this page.

For more information about the Scottsdale real estate market:

• Short Sales in Scottsdale: A Market Update
• Looking for Foreclosures in Scottsdale?
• A Bright Note in Scottsdale Real Estate

photo credit: quinn.anya

Just in.  The title of the Newsweek article is :  Want to Sell Your Home, Lower Your Price

And it gives Scottsdale some press that may not be the best, but to me, it’s a sign that Scottsdale is now on its way to recovery too.  Prices will need to drop quite a bit more to catch up to the rest of the Phoenix metropolitan area, but it’s good to be out of limbo.

Topping the list:

BusinessWeek.com teamed up with Trulia.com to rank the nation’s largest cities with the most discounted homes. Topping the list was affluent Scottsdale, Ariz., where 37% of listings have had at least one reduction and the average discount is 12.9% off the original asking price.

And then:

Of course, a reduced price isn’t always a bargain. The owner might not have dropped the price enough or might be lowering it because of some other reason (maybe the house is just plain ugly).

It’s worth reading the whole article.  Falling prices are scary, or they are an opportunity.  It just depends whether you selling, or buying.  And something tells me, that buyers are going to be spending just a little bit more time figuring out where they’d like to live in Scottsdale.

photo credit: Dru Bloomfield – At Home in Scottsdale

I’ve been pretty quiet on the blog-front this past month and a half.  However, it’s been six weeks of massive action, and an introduction to the world of bank-owned (REO) properties, where the majority of home buying and selling appears to be occurring in the Phoenix metropolitan real estate market.

Last year, most of my business was in Scottsdale.  In the past, I’ve worked in a much broader area, and this year will be similar. I currently have homes listed all over the Valley of the Sun, and about 75% of them are foreclosures, priced at $200,000 and under. 

Our market has changed, and, in my opinion, Scottsdale is out of sync.  Granted, it’s a unique city, land-locked, with many beautiful homes.  Foreclosures are few and far between.  Short sales are becoming much more common.  However, as a whole, it’s not a moving market.

While home sales demand is increasing in Phoenix, Glendale, Mesa, and Goodyear, in Scottsdale it’s decreasing.

Click for full-size view of Scottsdale real estate supply demand graph

Click for full-size view of Scottsdale real estate supply index graph

And when you look at the appreciation rates, comparing the City of Phoenix with Scottsdale, you can see that Scottsdale has experienced a much lower rate of depreciation, appearing to bottom out at about 20%. In Phoenix, the depreciation is much greater hovering at 40%.

Click chart for full-size view of Scottsdale vs. Phoenix Home Appreciation / Depreciation Rates

So, I’ve been pondering the reason that Scottsdale is experiencing a different real estate market.  Do you think it’s because:

1. Fewer number of foreclosures in the city, and many buyers are only looking at bank-owned properties, thinking they will get a better deal.
2. Reluctance of Scottsdale home sellers to reduce home listing prices to incent on-the-fence buyers to make a buying decision.
3. First time home buyers are looking to other communities where they can buy a larger and newer house for the same price.
4. A trend towards smaller is better.
5. Challenges in getting a jumbo loan (greater than $417K)
6. General uncertainty and conservatism in spending.

I’m curious.  What do you think?

In the following charts, I’ve shown prices for both 2007 and 2008.  Listing prices started dropping off in fall 2007, and continued until mid-summer of 2008.  After a sharp increase in the fall, list prices are now comparable to the same time last year.

Median List Price Comparison 2007-2008 (Click to see larger chart)

What is clear is that even with the declining prices, average time to sell is still climbing steadily.

Days on Market Comparison 2007-2008 (Click to see larger chart)

Inventory (the number of homes on the market) grew in 2007, with a small fluctuation in late summer / early fall.  While inventory continued to increase in 2008, the same late summer fluctuation was evident.

Condo Inventory Comparison 2007-2008 (Click to see larger chart)

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 has continued through 2007 and 2008.  In the early fall, it appeared that the market was improving, but that trend has been short-lived.

Condo Market Action 2007-2008 (Click to see larger chart)

We shall see what changes the new year brings.

See yesterday’s post for the single family home report.

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.

I posted a quick look at the Scottsdale zip code 85258 earlier this week on my McCormick Ranch blog.  In this part of Scottsdale, we are still in a buyer’s market, but there are fewer homes for sale, and homes are selling faster.  All good news, so stay tuned.

• Median home list prices are rising.
• The number of houses on the market is decreasing.
• The time to sell is also decreasing.

Still a buyer’s market, but for how long, as we head into the prime time season of great weather and winter visitors.

Call or email me if you’d like the compete report.

From these next two charts, you’ll see that the farther north you go, the newer and larger the homes get.

What I think most Scottsdale home buyers will find very interesting is that when you narrow down and look at price per square foot, the differences between the various communities within Scottsdale do vary, but not nearly as much as one would expect when looking at listing prices.

Data Source: Altos Research Reports, July 7, 2008

Related Links: 

Phoenix – Scottsdale Zip Code Map

Scottsdale Real Estate Inventory Update

Weekly Scottsdale Real Estate Report