Today, I’ve created some charts (with the help of Altos Research) to show the current differences in these varying markets.

Current median list price for South Scottsdale (85257) has dropped down to just over $200K. While the area just north of downtown Scottsdale (85250), the median listing price is now running about $375K.  The area around McCormick, Gainey, and Scottsdale Ranches (85258) has not see a drop in listing price.  To the north, where DC and McDowell Mountain Ranches are located in zip code 85255, median listing prices have hovered right around the $1 million dollar range.

In this next chart, you can see that in all areas have really experienced a reduction in price, if you look at it from a median price per square foot basis.  South Scottsdale has taken the brunt of this depreciation.

Although the northern part of Scottsdale has kept its listing prices high, inventory has actually increased slightly, where as in the other zip codes to the south, fewer homes are now available for sale. 

Finally, pricing really does have an impact on how long it takes to sell a home.  As you can see here, in 85255 and 85258, it is taking longer and longer to sell a home.  However, in downtown and South Scottsdale, you are seeing a plateauing of days on market, or the number of days it takes to sell a home.

Scottsdale’s real estate market has not been as impacted by foreclosures as many of the other areas around Phoenix.  Also, the majority of the homes on the market in north Scottsdale do not qualify for FHA financing or fall into the jumbo loan category, and with the tightened mortgage market, there has been an impact, resulting in a slower market. 

Move-up buyers have been sitting on the sidelines waiting to see what is going to change.  However, once there’s an increased level on confidence in the real estate market and our economy, I do think that we will see an increased number of home sales.  Owners who purchased prior to the market run up, with equity in their homes, will decide that selling their current home in today’s market will give them the opportunity to buy up.  Lower home prices and the lowest interest rates in years will drive this change.  It’s bound to happen, it’s just a matter of when.

Today’s Cromford Report on Lender Owned Properties shows a changing scene.  Basically, bank-owned properties are selling at a very high rate, and new REO properties are not coming to market fast enough to meet demand.  Prices have dropped pretty dramatically over the past two years.  Maybe with this decreased inventory (listings), we will begin to see some price stabilization.

Click on the chart for a larger, clearer view

I’ve included the full slide show, and invite you to take a look.

Highlights for the Phoenix area resale market include:

1. Seven straight months where number of home sales surpassed 2007.
2. The number of 2008 homes sales surpassed 2007 by almost 10%.
3. Results from the second half of 2008 showed significant improvement over the first half of the year.
4. Sales increases are definitely being fueled by dramatic price decreases, especially in the second half of the year.
5. Bank-owned properties are a significant portion (approximately 33%) of the homes sales.
6. Bank-owned properties are priced much lower than owner sold homes, and are selling at a faster rate.

I’m in the process of looking into home sales individual cities around the valley, and will be sharing some of those highlights.  The results have been surprising and may signal some significant opportunity for buyers who have been waiting on the sidelines, looking for the bottom.

I charted the REO sales percentage on a per city basis, and you can see that only one in five October home sales in the Scottsdale and Tempe markets were bank owned properties, as compared to three in five in some other outlying suburbs, such as Buckeye.  

One thing that I find particularly interesting with this data is that appears to be a relationship between the  percentage of REO (bank-owned) properties sold for a given city and the percent difference of the REO price compared to the overall median price.  This makes sense when you think about it.  The more REO’s sold, the more they drive the median price.  On the other hand, it implies that bank owned properties sell at at significantly lower price than non-bank owned properties, and I’m not convinced that this is always the case.

So the next question becomes, are there more homes in foreclosure in the outlying areas that are driving these sales?  To me, the answer is presumably yes, so I visited the Cromford Report to do a quick comparison of Buckeye and Scottsdale.

In the Buckeye market, it appears that somewhere between 25 and 30 percent of the properties on the market are the bank-owned properties. 

In Scottsdale, foreclosures appear to be less than 10% of the available market. 

What you will also notice in comparing Active Listings to Sales in both of these markets is that foreclosures are selling at a high percentage rate than are a part of the active market.  In my mind, the good news is that the foreclosures are selling and that this process is a critical part of balancing the market.  Granted, it may take longer than we like, but it is happening.

However in most Scottsdale zip codes, the prices increases are seen in the upper 25% of the price range.  In the following charts, the first group is defined as lowest 25% priced homes and increase up to the fourth quadrant which includes the highest 25% priced homes.

The time that it takes to sell a home is still increasing, and overall shows no sign of tapering off. 

However, when the data is broken down by home price, it’s easy to see that the lower priced end of the market may be showing some signs of relief.

And then finally, the number of homes being sold has improved since last summer, but shows some signs of tapering off.

As would be expected, homes in the lower price ranges are selling at a higher and more consistent pace, than the upper end of the Scottsdale real estate market.

Scottsdale has weathered the real estate market changes better than many other Phoenix metropolitan cities.  I think it will be interesting to see where the next couple months take us.  As always, comment, email, or call, if you have any questions, or would like more detail. 

The question here in Phoenix: Is it improving or is it seasonal? We have been improving month over month since Jan – but that’s normal. The encouraging part is that our local MLS currently has over 7,000 pending sales (1st time in a long time) and we already have 2,500 closings in April. If April posts a bigger number than March it will be the first time since 2004 that we have had increasing sales 4 months in a row.  That’s a good arguement that it’s improving!

An interesting point is that over half of the sales are properties that are vacant (normally 20%ish). Which means we aren’t converting as many sellers to buyers – we’re just absorbing the banks and other investors inventory. That will make it a slower recovery, but if we can couple that with ‘steady’ we’ll be good!

And then today, Leif Swanson, also from John Hall, posted some of his comprehensive home stats. 

Reports from around the country say that sales of existing homes fell by 2% in March 2008.  How did the Phoenix area do in March?  Well, there were 3445 resale home sales in February 2008 and 4303 sales in March 2008 in Phoenix.  So…. sales of existing homes in the Phoenix metropolitan area rose by 25% in March 2008.  Sales so far in April (as of 4-23-08) are 2894 (above pace from March 1-23, 2008 [2560] and February 1-23, 2008 [2148]).  There are currently close to 7200 pending sales, which should lead to improved sales figures for April and May 2008.

And then on the John Hall & Associates company blog, an overview from the R.L. Brown presentation given today, was posted.  The title -  “We’re in the beginning stages of feeling better.” RL Brown.  From what I read, we are seeing signs of improvement, yet Brown’s projections indicate that the housing recovery still has a way to go.  At the same time, he confirms that each neighborhood needs to be looked at and treated individually.

Earlier this year, I completed a comparison of six Scottsdale neighborhoods, and came to the same conclusion that each neighborhood really has to be viewed individually.  Price appreciation or depreciation varied dramatically from community to community.  

So as you get ready to buy or sell your house, it’s really critical to have your agent take a good, hard look at what is going on in your neighborhood, and in the surrounding areas.  This info will give you the upper hand in knowing how home sales and prices are really doing in the area that matters to you.  As always, it’s important to do your homework.  If you need help, call or email.

This morning I’ve created some new pages for you (and me!) that will give you a graphic snapshot of the current market in Scottsdale, as a city, and then broken down by the eight zip codes that comprise the geographical Scottsdale area. 

You’ll notice a new link just above the photograph above – Statistics.  Once you get to this page, you’ll have a choice of the stats you’d like to review.  These charts are updated on a regular basis, so feel free to come back and check out the current situation of the zip code where your home is located, or of the areas that you are thinking of moving to.

Periodically, I will be providing a review of the current market and will be sharing my perspective with you.  For now, take a look and let me know what you think!