Looking above at the 90-day rolling average, it’s interesting to see that median price for homes listings is now approaching $188/square foot, which was the prior peak for 2011.

Checking out the 7-day rolling average, it’s clear that the pricing has been much more volatile, which is to be expected.  What’s interesting, is that there’s been a steady increase in list price per square foot since July 2011.

Even with the peaks and valleys, there has been a shift in the seller’s perspective…. or is it that the decline in foreclosures and short sales are finally taking the pressure off pricing, and typical sales will now begin to drive the market?

Possibly, but not yet. Looking at the sales data for this past year, average annual home sales price is down $10/square foot, with no significant change last month.

And when you look at the October 2011 home sale information for Scottsdale 85258, you can see that while distressed sales are providing only 25% of the home “inventory”, they still account for almost 50% of the sales.

And the current average sales prices per square foot for all types of sales are still significantly less than the annual average, so we have not seen the end of the drop in sales price per square foot yet.

For now, it looks like some overly optimist home sellers may just be testing the market.

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?

Looking at where we are today, you can see that we have a slightly larger number of pre-foreclosures on the market and about 50% of all the properties sold in January were either pre-foreclosure (and most likely short sales) or lender-owned (REO) properties.  What is very interesting is that the average price per square foot has increased for all property types, to almost $240/sf for normal sales, to about $160/sf for pre-foreclosures, and to $150/sf for foreclosures.

I expected the higher numbers of distressed listings and sales.  However, the increased price per square foot was totally unexpected. 

I’ve been seeing an increase in prices in the lower end of the real estate market in various cities around Phoenix, but have not seen much of that pricing behavior in Scottsdale yet.  By the numbers though, it is happening.  Surprised me…. what do you think?

I haven’t done a market report on Scottsdale 85258, home to the “Ranches”…. McCormick, Gainey, and Scottsdale.  In January, I posted this same chart in the post: McCormick Ranch Real Estate – Least Distressed Area of Scottsdale.

A few changes have occurred in past ten months, while some metrics stayed the same.

What you will see when you compare now and then:

1. The percentage of homes on the market that are foreclosures or short sales remain under 25% and in approximately the same ratio, with more short sales than foreclosures.
2. The percentage of sold properties that are short sales or foreclosures are about the same, approaching 33%.  However, foreclosures now make up a greater portion of those sales.  Even more importantly, 67% of the homes sold today in this part of Scottsdale are traditional sale, with no bank involvement.
3. The biggest differences you will see are in price. 
   • Homes were being listed at an average of $200-300 per square foot at the beginning of the year.  Now, that range is $175-250/sf.
   • Sold prices are averaging in the $150-200 per square foot range, while earlier this year, they were $175-275.  The biggest change has been in the short sales.

What is missing here are the number of sales that are being used to calculate these statistics.  I’ll be taking a look at those figures in the future.

For now, know that the McCormick Ranch is fairly stable, even though average home prices have dropped considerably.

The chart on the left is 3 months old, and the chart on the right is current. You can see that short sales (light blue) and foreclosures (red) have been increasing and now comprise just over 25% of the active listings in Scottsdale. Quite a bit less than most other Phoenix cities, with the possible exception of Tempe.  However, when you look at the actual sales, comparing March to June, you will see that the combination of short sales and foreclosures have decreased, but in actuality, it’s the foreclosure component that’s reduced.  This decrease may be related to the foreclosure moratorium that was introduced by lenders earlier this year.

Looking a bit closer at the dynamics of the market, you can see that the listing prices for normal (no bank involved on seller side), short, and lender-owned properties is holding steady.  However, the average price per square foot, has dropped dramatically. For a normal sale, the price has dropped about 20%, from approximately $250/sf, as of April 2009 to $200/sf in the July chart. Average short sale prices have dropped from $175/sf to $150/sf, and average sales prices of bank-owned properties seem to be leveling off, only dropping from $150 to $140 per square foot.

The Cromford Index is trending in a positive direction, yet still shows significant market distress.

Scottsdale has experienced a different real estate market than most of the rest of the valley.  Yet, in some ways it’s very similar. Foreclosures are being gobbled up. Buyers are resorting to making offers on short sales. Overpriced normal sales sit on the market for months and months.

What’s important for sellers to know is that your house must be priced to the market, if you want sell.  Buyers need to be pre-approved and ready to make a strong offer, so you can act quickly, when you find a seller who is realistic, and a house that’s market-priced.  Competition exists for these well-priced properties, especially if they are in good condition, so it’s very important to keep up on on the current real estate market in Scottsdale.

Related Post:

Scottsdale Short Sale and Foreclosure Update – December 16, 2008

Good news for sellers in pre-foreclosure or short sale situations. Their chances of a successful listing have improved from less than 20% in February to over 45% as of July 5. In fact for the first time in history, the success rate for short sales and pre-foreclosures (45.7%) exceeds that for normal sales (44.8%). This is not necessarily bad news for sellers in normal sales situations, since their success rate has also improved from around 22% in early February. Meanwhile lender owned properties are maintaining their phenomenal success rate of 91%, having improved from 65% in February.

More details on whether the Scottsdale real estate market is following this same trend to follow in the next couple of days.

Not being content with generalities, and knowing that real estate is local, I’ve broken down this same indicator by zip code, and then grouped by North, Central, and South Scottsdale.

South Scottsdale Real Estate

This area covers from Indian Bend Road south to Tempe.  The lower priced homes in 85257 are definitely leading the way, but 85251 and 85250, are not far behind and are following the same trend of improvement, since the low point at the beginning of 2009.

Central Scottsdale

This area runs from Indian Bend Road north to about Bell Road, but doesn’t include McDowell Mountain Ranch.  The Scottsdale zip codes 85254 (that’s located mostly in the City of Phoenix) and 85260 are showing the most improvement (since Feb 2009) with 85259 (east of the 101), and 85258 (McCormick and Gainey Ranches) bringing up the rear.

North Scottsdale

North Scottsdale Scotts zip codes 85255, 85266, and 85262 are showing improvement as we move through the year and are much more stable than the latter part of 2008.

When you look at the where the Market Action Index is currently hovering for each portion of the city, you see that South Scottsdale with it’s lower prices is seeing stronger improvement than up north, where the average price of a home is considerably higher.

To put it in perspective:

North Scottsdale Market Index ranges from 11-13. Central Scottsdale ranges from 13-16, and South Scottsdale ranges from 15-18.

From the charts, you can see that the latter portion of 2008 was considerably stronger than anything we’ve seen this year.  Short sales and foreclosures are playing an increasing role in the Scottsdale real estate market.  Time will tell what the overall impact will be.