Reasons to buy a home in Scottsdale: #1

Scottsdale’s Friendly Community

What’s the one thing that almost every Arizonan has in common?  They are not from Arizona!  The Valley of the Sun is a (nearly literal) melting pot of people from around the country and around the globe.  Whether for a job, health, the climate, or just a change of scenery, people have flocked to the Valley for the last several decades.   As this burgeoning city grows and matures, we will certainly begin to see the culture develop into a life of its own!  Scottsdale is full of dynamic personalities, friendly faces, and blossoming new friendships.  Recommended Scottsdale Family Communities: Desert Mountain, McDoweel Mountain Ranch, Buenavante, 85254

Reason #1, Reason #2, Reason #3, Reason #4, Reason #5,

Reason #6, Reason #7, Reason #8, Reason #9, Reason #10

Reasons to buy a home in Scottsdale: #2

Scottsdale’s Proximity to Phoenix

Phoenix, as a city, was designed for efficiency.  Credit the city’s modernity, forward thinking founders, or just chance…any way you slice it, there is no city in the world that is so expansive, yet so easy to navigate and so convenient.  Scottsdale, being the most desirable suburb of Phoenix is absolutely perfectly positioned for both convenience and seclusion.  In just a few minutes, one can easily travel from their home in Scottsdale to almost any section of Phoenix.  Eat your heart out, Los Angeles!  Recommended Convenient Scottsdale Communities: Buenavante, Sweetwater Ranch, Scottsdsale Ranch, McDowell Mountain Ranch

Reason #1Reason #2Reason #3Reason #4Reason #5,

Reason #6Reason #7Reason #8, Reason #9Reason #10

Reasons to buy a home in Scottsdale: #3

Scottsdale Shopping

The shopping in Scottsdale is truly world class.  When it comes to shopping, you will only be limited by your imagination and your pocket book!

1st stop: Scottsdale Fashion Square – with all of its glitz and glamour, this is shopping at its finest.  You will find everything from the big department stores such as Nordstrom and Macy’s, to high-end boutiques and everything in between.

2nd Stop: The Borgata – featuring small-scale, high-end shops with all of the charm you could ask for.  While at The Borgata, be sure to visit The Shops and Hilton Village.  You will find a one of a kind shopping experience along with delicious eateries and plenty of places to pamper yourself.

3rd Stop: Kierland Commons – If you still haven’t found what you’re looking for, head north to Kierland Commons, a unique and tasteful outdoor urban shopping experience.   This high-energy sidewalk shopping environment will certainly be the perfect ending to your magical day of shopping.  Recommended Scottsdale Shopping Communities: Kierland, Gainey Ranch, McCormick Ranch, Windsong

Reason #1Reason #2Reason #3Reason #4Reason #5,

Reason #6Reason #7Reason #8, Reason #9Reason #10

Reasons to buy a home in Scottsdale: #4

Scottsdale Resort Amenities

Scottsdale boasts some of the finest resorts in the world.  Luxurious getaway destinations include The Phoenician, Xona Resort, Boulders, Hyatt Regency Gainey Ranch, and The Scottsdale Resort (just to name a few).  Along with these high-end resorts come world class amenities.  Spas, fine dining, music, golf, relaxation, sparkling pools with cabanas, gondola rides…the list goes on and on.  Locals also take advantage of these amenities.  Many of the resorts offer discounts for Scottsdale residents to come and use their spas and other facilities.  It’s like living at a resort!  Recommended Scottsdale Resort Communities: The Boulders, Desert Mountain, Artesia, Legend Trail, The Reserve

Reason #1Reason #2Reason #3Reason #4Reason #5,

Reason #6Reason #7Reason #8, Reason #9Reason #10

Reasons to buy a home in Scottsdale: #5

Scottsdale City Management

Known as “the best run city in the world,” Scottsdale maintains a sense of safety, security and cleanliness unmatched in Arizona.  Scottsdale City Managers have taken great care to maintain the features and virtues that have made this city great.  Billboards and other advertising eye-sores are not allowed in city limits.  Development must adhere to strict guidelines in order to insure that Scottsdale residents will be able to enjoy this fantastic city for years to come.  HOAs also do their part to maintain the highest standards in Scottsdale communities.  Recommended Scottsdale HOA Communities: The Trails, Ancala, Desert Mountain, Pinnacle Peak

Reason #1Reason #2Reason #3Reason #4Reason #5,

Reason #6Reason #7Reason #8, Reason #9Reason #10

Reasons to buy a home in Scottsdale: #6

Scottsdale Golf

Scottsdale is world-renowned for its fantastic golfing.  Locals like PGA legend, Phil Mickelson have helped to turn Scottsdale into Golfdale.  With more than 25 public golf courses and dozens more private ones, there are enough links for everyone.  Vacationers travel to Scottsdale for their amazing resorts, shopping, relaxation, and GOLF.  It’s not uncommon to spot a celebrity like Alice Cooper or Michael Jordan playing at one of the local courses.  It’s no wonders why the Phoenix Open has become the single largest golf event in the world!  Recommended Scottsdale Golf Communities: Wildfire, Whisper Rock, Troon Village, Desert Highlands, Estancia

Reason #1Reason #2Reason #3Reason #4Reason #5,

Reason #6Reason #7Reason #8, Reason #9Reason #10

Reasons to buy a home in Scottsdale: #7

Scottsdale Nightlife

Scottsdale’s nightlife is unmatched in Arizona.  Old Town Scottsdale is a nightlife mecca for visitors and residents alike.  Featuring world class restaurants, trendy bars, and fabulous night clubs, Old Town is a one stop shop for a good time.  For those who still want to get out and have fun, but want to keep it low key, there are plenty of hidden gems throughout Scottsdale.  Authentic, western themed hot spots like Greasewood Flats and Pinnacle Peak Patio can be found in Scottsdale along with chic and modern spots like Kierland.  There’s something for everyone here!  Recommended Scottsdale Nightlife Communities: Kierland, Old Town Scottsdale, Woodleaf, Pinnacle Peak Estates

Reason #1Reason #2Reason #3Reason #4Reason #5,

Reason #6Reason #7Reason #8, Reason #9Reason #10

Reasons to buy a home in Scottsdale: #8

Scottsdale Property Values

I’ve heard it said that Scottsdale real estate is the safest investment in town.  Even in economically uncertain times, Scottsdale remains one of the most desirable places to live.   All of the individual attributes that make Scottsdale so unique also keep property values at a premium.   Recommended Property Value Communities: 85254, DC Ranch, Scottsdale Horizons

Reasons to buy a home in Scottsdale: #9

Scottsdale’s Man-Made Beauty

Early on in Scottsdale’s history, residents knew what a gem this city was.  There was something almost magical that made this city special.  In the spirit of the West, they developed the land and replaced dirt with grass, cactus with trees, and deserts with lakes.   High-end Master Planned Communities and world-class golf courses began to pop up in this picturesque city.  Southwestern architecture took precedence and the man-made beauty abounded even more.  Recommended Scottsdale Lake Communities: Gainey Ranch, McCormick Ranch, Scottsdale Ranch

Reason #1Reason #2Reason #3Reason #4Reason #5,

Reason #6Reason #7Reason #8, Reason #9Reason #10

Reasons to buy a home in Scottsdale: #10

Scottsdale’s Natural Beauty

From the Boulders in Carefree to the McDowell Mountains to the vast Sonoran Desert, Scottsdale is full of natural beauty.  Residents covet the breathtaking mountain views that accompany many of the high end homes in Scottsdale.  Because much of Scottsdale is higher in elevation the rest of the Valley, it is not uncommon to find a home with one view looking up at the McDowell Mountains and another view looking down at the Phoenix city lights. Recommended Scottsdale View Communities: Troon Village, The Boulders, Ancala, Desert Mountain, Pinnacle Peak Village, Grayhawk  

Reason #1Reason #2Reason #3Reason #4Reason #5,

Reason #6Reason #7Reason #8, Reason #9Reason #10

Scottsdale and Phoenix Sellers Jumping on the Bandwagon?

Scottsdale and Phoenix Sellers Jumping on the Bandwagon?

It’s in our nature. We want to buy low and sell high. “Timing the Market” is certainly on the lips of lots of stock market pundits these days – and is now a part of the residential real estate discussion, both locally here in Scottsdale and Phoenix, and nationally.

Questions abound: Has our market peaked? If not, when will it? If I’m buying, should I buy now or wait for more supply and lower prices? Will mortgage rates continue rising or will they decrease, or at least stabilize? Open the envelope, please. (Just kidding😉)

What we do know, is that sales prices are continuing to rise (market lag) and will do so for a number of (unknown) months until homes take longer to sell (now happening), and asking prices begin to drop (now happening).

The good news for buyers, is that supply is increasing – rabidly and rapidly. Active supply has increased 71% over the same time last year (as of May 21st). And per the Cromford report, it has increased 45% in just the past 30 days, though still historically low

What is most interesting is that, again, per Cromford, it’s “not coming from a massive flood of new listings hitting the market. New listings are at normal levels, and not excessive, but fast rising mortgage rates and fewer sales have reduced the number of accepted contracts.” If sellers want to hit the peak of the market, now may be the time to sell, but as has been questioned by Mike’s Market Snapshot ad nauseum in the past months, “THEN what are you gonna do?”

“If you can afford it, be on the lookout to find the right home that you will enjoy living in day after day. And if you find it, go for it. After all, isn’t a home’s enjoyment the right investment strategy?”

With massive untold millions of homeowners having sub-3% mortgage rates, why would they want to sell and step up to 5.5% current rates, unless their existing situation mandates they sell, such as relocation out of the Valley, or regular ole life issues of births and deaths. This could include us aging boomers going into assisted living, and/or investors wanting to sell at the top of the market. The latter would not appear to be much in play however, as right now, investors are reaping the whirlwind of the highest rental returns ever.

And to buyers, my advice remains: If you can afford it, be on the lookout to find the right home that you will enjoy living in day after day. And if you find it, go for it. After all, isn’t a home’s enjoyment the right investment strategy?

 

As the Market Turns – Real Estate Changes Occurring Now in Scottsdale and Phoenix

As the Market Turns – Real Estate Changes Occurring Now in Scottsdale and Phoenix

It’s happening folks, right before our eyes. The market is changing, umm, cooling. But before we go there, we’ll report on April’s sales numbers:

  • Active Listings: 6,688 versus 5,080 last year – up 31.7% – and up 32.4% from 5,051 last month
  • Under Contract Listings: 10,889 versus 12,187 last year – down 10.7% – and down 6.3% from 11,620 last month
  • Monthly Sales: 9,270 versus 10,200 last year – down 9.1% – and down 8.6% from 10,144 last month
  • Monthly Average Sales Price per Sq. Ft.: $302.64 versus $243.36 last year – up 24.4% – and up 4.1% from $290.75 last month
  • Monthly Median Sales Price: $466,000 vs $373,000 last year – up 24.9% – and up 2.3% from $456,000 last month

As you can see, the numbers continue to change favoring buyers. Listings are up over 32% in just the last month. Under contract listings are down compared to last year AND last month. Sales are down 9% from last year, and almost 9% since last month. And in one of the few owner bright spots, sales prices, the lagging indicators, are up 24% versus last year, and, get this, over 4% from just last month.

For a few more months perhaps, we will continue to read of increasing sales prices, as sales are closing higher due to existing pending sales in the past weeks. But soon enough, if the current trend continues (and it will), inventory will continue to increase providing buyers with many more choices and less competition. Alas, we could well be on our way to a more normal market – a novel Phoenician thought, for sure.

But soon enough, if the current trend continues (and it will), inventory will continue to increase providing buyers with many more choices and less competition.

But then there are the investors. What’s up their sleeves?

Real estate investors can be pretty savvy. The successful ones understand market dynamics. They know “when to hold em, and when to fold em.” Today’s large scale investors, like the huge behemoths in the stock market, can often determine (manipulate?) direction for an entire market.

Since mortgage rates have escalated to over 5.5% recently, the regular mom and pop market, including first time homebuyers and move-up homebuyers, is slowing.

So, how are investors reacting to the market? Or asked another way, what should a shrewd investor be looking to do?

The current Phoenician investor, in my opinion, unlike stock market sellers, will be pulling back on purchases, but not liquidation. If buyers aren’t buying, they’re renting. The rental market will not be slowing until (if and when) new home construction, apartments, etc catches up to the demand. This could then further slow the sales market. Investors will wait and only look for the best buys that are out there – and they could have plenty to choose from.

Softness Beginning in the Phoenix and Scottsdale Rental Market?

Softness Beginning in the Phoenix and Scottsdale Rental Market?

We knew it was bound to happen, the question was when? It’s looking like the when is now! The rental market is showing signs of slow-down. If we compare our rental market with 2021 at this time, we see the following supply changes occurring as reported by the Cromford Report:

  • single-family detached actives have increased by 99%
  • apartment actives have increased by 69%
  • townhouse actives have increased by 15%

Single-family detached (SFD) rentals are in much greater supply in 2022 and are currently 71% of all rental listings in the Arizona Regional MLS (ARMLS). At the same point in 2021 they were only 51% of rental listings. (Caveat: The ARMLS numbers represented here are not the entire market, however they do provide a fairly accurate picture of the whole market)

Cromford is also seeing the average asking price for single family detached rentals drop in the last year where the SFD is now averaging $1.61 per square foot (PSF). It was $1.97 this time last year having peaked at $2.09 per month previously.

Apartment average rents are currently at $2.16 PSF per month. For all types of condos, townhomes, and apartments (attached), the average asking price is currently $2.02 PSF per month. It was $1.90 this time last year.

Interestingly, the drop in rental prices is NOT happening to townhomes. In fact they have been increasing. They also remain in short supply. Apartment rents have also increased but supply is much better than a year ago. The appeal of townhomes for renters and investors is due to a at least a few factors:

  • Townhomes are attached like condos and apartments, but often with just 2-4 units being attached providing better privacy – more or less.
  • Many townhomes provide garages. Condos and apartments not so much.
  • Town home communities are more often gated

The big changes are in single-family rentals where supply has doubled over twelve months and the average rent asked has declined by 18%. SFD’s are actually less expensive to rent PSF, so if a prospective renter needs more space, they will get more for the money with an SFD.

Currently there is a large number of attached homes being built in Phoenix Metro. There is always a danger of overbuilding and we’ve certainly seen that in our past. Developers are no doubt seriously eyeing our market to discern future expansion (or not).

So today, while it’s still called today, there is market movement favoring renters. Now if the same thing could only be said for our first time home-buyers.

Better Days Ahead for Scottsdale and Phoenix Buyers?

Better Days Ahead for Scottsdale and Phoenix Buyers?

March numbers are showing continued huge strength in appreciation, but also possible trends that could slow the market. First, the stats:

  • Active Listings: 5,051 vs 4,088 last year – up 23.6% – and up 10.1% from 4,588 last month
  • Under Contract Listings: 11,620 vs 12,575 last year – down 7.6% – and down 3.6% vs 12,050 last month
  • Monthly Sales: 10,123 vs 10,398 last year – down 2.6% – but up 26.6% from 7,998 last month
  • Monthly Average Sales Price per Sq. Ft.: $291 versus $232 last year – up 25% – and up 2.3% from $285 last month
  • Monthly Median Sales Price: $456,000 versus $358,250 last year – up 27.3% – and up 2.5% from $445,000 last month

First, let’s look at our still hugely deficient listing inventory. Active (current) listings are up 24% (all numbers rounded) from one year ago and up 10% from last month – positive news for buyers! I’m not sure, however, how much help at this point this will be for our buyers, since mortgage rates are near 5%. Click here to read a great NPR article about it.

As expected, sales are slowing – somewhat. Under contract listings are down near 8% from last year, and down 3.6% from last month.

Sales spiked last month versus February, up near 27%, but have decreased versus last year by nearly 3%.

Crazy price increases continue. The monthly average sales price per square foot (PSF) is now at $291, compared with $232 just one year ago – a 25% rise. Of particular note is that the PSF is up from $285 just last month – a 2.3% rise. The Monthly Median has risen to $456,000 – a 27% increase from last year and up 2.5% from last month.

The huge bounce in mortgage rates these past few months (now near 5%) is combining with the higher priced inventory is eliminating MANY buyers from the market, especially the newbies. In fact, with all the purchases and owner refi’s over the past three years, there will be little incentive for homeowners to sell. There’s not much upside financially for them.

In fact, with all the purchases and owner refi’s over the past three years, there will be little incentive for homeowners to sell. There’s not much upside financially for them.

There also seems to be a possible turn in rentals. Rent prices are now decreasing, though not significantly. Average asking lease prices have fallen also, which is a leading indicator of closed rental prices.

Personally, I don’t see any major changes in pricing, either for sales or rentals. This was foreseen when we projected ahead of what the sales year has in store. We’re on the money regarding market slowing, but prices are still high. Is this a result of continued cash-buying investor groups?

Another story for another Monday!

Pray for Ukraine!

Scottsdale Real Estate Trends

Scottsdale Real Estate Trends

I love our chamber of commerce 85-degree temps. In April of 1994, my wife and I were asked to visit friends from the Truckee/Tahoe California area who had bought a home in Scottsdale. It also coincided with our 10-year wedding anniversary. We weighed the options: 25 degrees and snowing in Truckee, vs 80 degrees and sunny in Scottsdale. And they said, “Oh, and bring your swimsuit.” SOLD! We moved to Scottsdale later that same year.

Swapna Venugopal Ramaswamy, a USA Today writer, wrote an s an article in the Arizona Republic yesterday. This article’s title was “Lock in Mortgage Rate Now.” In the article the writer mentioned that rates were 4.2%, week ending March 17th. In just over two weeks, the rate jumped to almost 5%.

FYI: Today’s Mortgage Rates from NextAdvisor

Our advice? Even though the rates are near 5%, if you’re buying a home, yes, you should lock in the rate. Rates move according to long term risk. If you believe in the next few weeks/months that inflation will persist, then rates will probably not back down, and would continue higher. If the price of oil steadily drops, that would help lower inflation which would help lower rates.

The article mentions that now would be a good time to refinance. That would of course depend on what your current rate is. There’s a large cost to refi. I would be pretty surprised that someone’s rate would be at 5% or more and they had not already refinanced.

99% of Arizona’s Growth from Migration, Per Census Maricopa County Fastest Growing U.S. County

99% of Arizona’s Growth from Migration, Per Census Maricopa County Fastest Growing U.S. County

I went to the Suns game yesterday (vs Philly) with my buddy Walter. He has owned Suns season tickets since the Steve Nash era, the last time the local team was a championship caliber team, besides last year. I usually drive to these games, and they’re most always at night, but yesterday Walter graciously drove and it was an afternoon game. Now, why does this matter, and what’s it got to do with real estate?

Glad you asked.

Not driving, and being able to be an observer, I was blown away with the upward growth (literally) of downtown Phoenix. Numerous high-rise cranes were building modern commercial and residential structures. Former run-down neighborhoods (not all) were sprouting economic vitality. The arena (Footprint Center) was like no other arena event I’ve ever attended. It was a sellout (and it’s not even the playoffs) and the fan/arena noise was an amazingly fun assault on the senses. Of course, it does help to have the best pro team in the nation😉

Segue.

“…the Phoenix Metro community as a whole, saw more population growth than any other metro community…”

According to Census data, Arizona’s population gained almost 100,000 this past year. And 99% of our resident growth is attributed to migration, rather than the “natural change” of births and deaths. Of the 98,330 new residents, only 832 were attributable to natural change. Check out this article from the Business Journal:

Maricopa County alone, added more residents (58,246) than any other County in the country. Further, the Phoenix Metro community as a whole, saw more population growth than any other metro community, behind only Dallas-Fort Worth-Arlington area. Arizona ranks, per the Census, as the 3rd fastest growing state in the U.S.

What was just a few years ago never really discussed, but is now the most oft question of the day for The Bodeen Team:

When will this (price escalation) end? Based on the above local and statewide story, not real soon. Seemingly, our demand for a limited supply of housing will continue unabated for the foreseeable future. This will further increase values locally, and statewide.

Caveat: Having said that, in 46 years of residential real estate experience, I’m no stranger to market changes. And when they happen, they can happen quickly.

Global Pandemic? World War? Soaring Inflation? Result? Phoenix and Scottsdale Home Prices Continue to Spike!

Global Pandemic? World War? Soaring Inflation? Result? Phoenix and Scottsdale Home Prices Continue to Spike!

I haven’t seen any other articles about this yet, but the counter-intuitive conclusive message, at least now, seems to be getting clear: Global and national bad news, at least in Phoenix, Arizona, means home values continue spiking upward.

Some history:

Pricewise, in August of 2011, based on the Monthly Average Sales Price Per Square Foot, (PSF) the Phoenix Metro residential real estate market hit rock bottom – $79.00 PSF.  This was a time which local veteran real state agents would just as soon forget. Foreclosures, Short Sales, abandoned homes, many displaced families, it was a nightmare.

But then, the market turned. Investors began buying homes traditionally and the through the foreclosure market, fixing and flipping, or fixing and renting. Gradually, neighborhoods began to change – for the better. Between that August 2011 bottom and February of 2020, the PSF rose to $185. This was a $106 PSF rise in 9 years, or $12.00 PSF per year average. If you had a 2000 SqFt home, your home appreciated $24,000 per year. Wow, a great time to own a home.

In February of 2020, the Covid 19 reality began hitting home. The local market screeched to a halt. In two months, the PSF dropped $7.00. Listing inventory rose by over 30% in one month! At this rate we would be soon seeing a return to a huge inventory of homes for sale. The pandemic increased intensity and hundreds of thousands of Americans were dying, not to mention the millions world-wide. The great and healthy 9-year real estate ride we homeowners were enjoying, was ending – at least that’s what we “experts” thought.

The great and healthy 9-year real estate ride we were all enjoying, was ending – at least that’s what we “experts” thought.

But then, inexplicably, unexplainably, incredulously, the market changed – again. We went from $180 PSF in May of 2020 to $296 in March of 2022 – in less than two years! That’s $116 PSF, or more than $58 PSF per year! That 2,000 SqFt home has now increased over $116,000 each of the last two years.

That was Covid-19. As this terrible pandemic has been winding down, we have a new war in the world with Russia and Ukraine spiraling up. It has World War potential. Oil, the still major global currency, has spiked, bringing with it inflation not seen in our country since the 80’s. Mortgage rates are also rising, now over 4%.

Are these new geo-political events halting the rise of local real estate values? No! Incredibly, prices are continuing to rise at a greater rate as is now being reported by the Cromford Report, the most accurate source of real estate statistical reporting in Arizona.

So here’s the scoop:

Per Cromford, last month, on February 15th, the closed sales PSF for the Phoenix Metro area for all types, namely single family detached, condo/townhome, etc., was $277. On March 15th, the closed sales PSF was $290 – an increase of 4.5% – in one month. That used to be Phoenix’s annual long term appreciation rate!

I’m not through. As of March 15th, the current average Pending Sales PSF is at $296. Based on current Pending PSF, Cromford is projecting a 4.4% rise for April 15th. If this happens, prices will have risen 9% in just 2 months, or an annual rate of 54%!

My conclusion? It seems simple enough. In the storms of life, people gravitate to what is solid and real. And recently at least, it seems like folks aren’t letting go.

Affordability Still Exists in Arizona – Out Yonder!

Affordability Still Exists in Arizona – Out Yonder!

Last week, a client and friend emailed me a great and timely question, and yesterday the answer came. First, his question:

“Hello Mike, Obviously buying anything now is anything but easy, but are there any areas…of town whose prices haven’t gone as far to the moon as the rest or is it all equally bad?”

His question is probably on the minds of many these days. So, we look to Cromford’s Ranking Table published yesterday, March 13th, 2022 which ranks the 40 cities of Phoenix Metro. The Annual Average Price Per Square Foot (PSF) is what is compared with the previous PSF at the same time last year. It is ranked from highest PSF to lowest. Important to note is that these ranked homes are single family detached – not condo, townhouse, etc.

What sticks out to me is, and has been no surprise for many years, is the Northeast Valley, which is the highest priced geographical quadrant in Metro Phoenix. Paradise Valley, one year ago had a PSF of $471 (numbers rounded). It rose 30% to $613 presently – a 30% increase. Scottsdale follows with a 29% PSF increase ($410 vs $318). Carefree, Rio Verde (NE Scottsdale), Fountain Hills and Cave Creek round out the top 6 cities – the only cities priced over $300 PSF – all rose over 25%!

The other non-surprise is that many of the most affordable cities per PSF, are those located out of town. Seven more distant cities that are priced under $200 PSF are those further out. Interestingly, the two highest PSF increases were out there in Coolidge and Tonopah – at 40% and 42% respectively.

Oh yea, Tonopah, (aka East L.A.)  is near the place that Bill Gates guy bought 25,000 acres in 2017 to develop a “Smart City” known as Belmont. Oh, and isn’t that area right near the proposed Interstate 11 which will traverse from Mexico to Canada some century? Hmm.

For more info on Belmont: https://vermaland.com/bill-gates-puts-remote-arizona-area-on-map-sparks-real-estate-rush/

 

Phoenix and Scottsdale Mixed Market Messages – Good News for Renters?

Phoenix and Scottsdale Mixed Market Messages – Good News for Renters?

Our market is providing mixed messages. Here are the basic numbers as reported by the Cromford Report last week comparing March 1, 2022 and March 1, 2021 for all areas & types:

  • Active Listings: 4,588 vs 4,491 last year – up 2.2% – but down 5.9% vs 4,876 last month
  • Under Contract Listings: 12,050 vs 12,630 last year – down 4.6% – but up 6.6% vs 11,302 last month
  • Monthly Sales: 8,000 vs 8,035 last year – down 0.4% – but up 12.7% vs 7,096 last month
  • Monthly Average Sales Price per Sq. Ft: $285 versus $231 last year – up 23.1% – and up 3.6% from $274.70 last month
  • Monthly Median Sales Price: $445,000 vs $349,000 last year – up 27.5% – and up 2.7% vs $433,500 last month
  • Days of Inventory: 17 vs 16 last year vs 39 two years ago

First off, the supply of active listings, though up 2.2% from one year ago, fell 5.9% from last month. This limited inventory continues to spell bad news for buyers. Under Contract Listings dropped 4.6% compared to last year but were up 6.6% from last month. Sales dropped slightly from last year but were up a whopping 12.7% compared to last month.

And for those hoping there would be moderation in pricing, it’s not happening yet. The average monthly sales price per square foot (PSF), now at $285 PSF, was up (just?) 23.1% from last year, but launched upward 3.6% since last month. Calculating that on an annualized basis, that would be an increase of 43%. The monthly median sales price was up 27.5% from one year ago, and up 2.7% since the previous month – an annualized increase of 32%.

Rental Market Showing Signs of Softening?

Cromford reported over the weekend that the ARMLS (Arizona Regional MLS) rental supply has increased 39% compared to one year ago. (1543 to 2138 units) It should be noted that most rentals do not appear on ARMLS, but the numbers are significant enough to look at trends.

Supply is arriving faster. New rental listings are up 20% compared to 2021. In the last 4 weeks alone, there has been a 26% increase in new rental listings. The average lease list price shows a drop of $1.80 PSF from $1.93 one year ago. Single family detached homes to rent are up 99% – a significant increase, but apartments to rent are down 33%

Cromford further notes that the most likely supply of single-family homes to buy could come from wary investors finding it more difficult to rent the homes. This could happen if they’re finding it difficult to get tenants or the rent pricing falls.

On the other hand, the latest ARMLS PSF for places actually rented has now hit a new record of $1.38.

Go figure.

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