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?
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.
Do you like gated privacy, spacious lots with generous building envelopes in a fresh newer North Scottsdale community located in the 85266 zip code? Welcome home! This serene desert community in North Scottsdale offers new homes on one acre home sites with excellent A Rated schools and lovely mountain views. It’s a short drive down Scottsdale Rd to all that North Scottsdale has to offer including world class restaurants, shopping, golf, etc.
Open and large Toll Brothers floor plans are featured with Contemporary, Spanish Colonial, and Tuscan style architectural designs. 7 distinct floor plans range from approximately 3,927 square feet to 6,430 square feet. Home highlights included 3-4 bedrooms, 3.5 to 4.5 bathrooms, 3-4 car garage, media rooms, serving centers, casitas and outdoor living options.
Toll Brothers not only builds homes, but whole communities. There are a number of Toll Brother Communities in the Valley including several in the North Scottsdale and North Phoenix area. Saguaro Estates in my opinion is one Toll Brother’s crowning achievements. They are a fortune 1000 company and was recently named by Builder Magazine the 2014 Builder of the Year.
Two Toll Brother models are available onsite. Pricing begins in the low $900’s. Call Mike or Jonathan Bodeen to view this community firsthand. There are still a few good lots to choose from.
And remember, it costs you nothing to have our professional representation, but we must accompany you to the community the first time you go, or the builder is not required to pay our fee. Call us now at 602-689-3100.
North Scottsdale Zip Code Report: 85266
The 85266 Zip code, which is the most northern reaches of North Scottsdale is showing August sales to be down 29% versus 2013. The monthly median sales price in the North Scottsdale zip code is now back up to a median sales price of $620,000 compared with $605,000 one year ago and up 41% over August of 2012. Pending listings in North Scottsdale 85266 are at their lowest point since October of 2013.
The Rancho Manana community is located just north of Scottsdale, Arizona in the historic town of Cave Creek. Rancho Manana is attractive to residents who want the calm serenity of open spaces, while also enjoying the amenities of a private resort. Most homes overlook the golf course or Tonto National Forest, which provides beauty, lush vegetation, and a unique desert landscape wherever you turn. The centerpiece of this community is the Golf Club and Spa. The European style spa provides comfort and relaxation after a workout at the clubhouse fitness center, a swim in the heated outdoor pool, or a hard day at work. The Clubhouse also features the Tonto Bar and Grill, famous throughout North Scottsdale for its award winning cuisine. The par 70 championship golf course has been named one of Arizona’s Most Scenic Golf Courses. Golfers of all skill levels will be challenged by the ups and downs of the natural terrain.
Scottsdale Country Club is a guard gated community located in the heart of central Scottsdale. Single family homes are built around Starfire golf course, and are treated to golf course or mountain views from every property. The public golf course is 27 holes, and was designed by the legendary Arnold Palmer. Homeowners can take advantage of the community tennis court, swimming pool, and spa. In addition, there is a luxury condo development which features its own gated entry, resort style pool and spa, clubhouse, and fitness center. Scottsdale Country Club is situated close to enough shopping, dining, and entertainment experiences to satisfy your every heart’s desire.
Desert Park is a part of DC Ranch, a large well-designed master planned community at the base of the McDowell Mountains in North Scottsdale. This community is distinctive because all of the homes are designed for front of house living. Homes feature front porches and are grouped around a large central park to encourage getting outside, making friends, and building a real community. Homeowners have all the benefits that come from living in DC Ranch, including social events, championship level golf, 2 country clubs, and miles of hiking and biking trails. If you are looking for the perfect place to raise your family, be sure to consider the community of Desert Park.