While it may not seem like it when a down real estate market drags on for years, the one thing you can count on is that it will, eventually, change. The Scottsdale, Ariz. market showed signs of doing just that in late 2011, with high buyer interest and rising prices.
Sure, other sectors that affect the housing market remained clouded, such as the high unemployment rate and rising gas prices. Because of this, analysts presented us with a mixed bag of forecasts, with some saying home prices would shoot up in 2012 and others warning that we still had further to fall.
That mixed bag is to be expected because nobody can predict the future. So far this year, however, the naysayers are wrong, while those who based their predictions on other facets of the Scottsdale economy knew better. New housing starts, one predictor of a market’s trajectory, showed enough improvement in the first half of 2012 to allow Scottsdale’s Meritage Homes to realize new home orders at the highest level in four years, according to CBS News.
Another closely watched segment of the real estate industry is the commercial property market. Scottsdale is occasionally seeing multiple offers on commercial property, such as the recently offered Pinnacle East Corporate Center that drew five bidders and sold within 45 days of listing.
When it comes to residential real estate, the Scottsdale market is doing just fine, so far. “Scottsdale median home prices have increased about $20 per square foot in most Scottsdale area zip codes during the first six months of 2012,” according to Scottsdale real estate agent John Wake. “For a 2,000 square foot Scottsdale home that would be a $40,000 increase in home value,” he concludes.
Shrinking Inventory Puts Pressure on Homebuyers
The statistics from the Arizona Regional Multiple Listing Service (ARMLS) tell a classic tale: Maricopa County’s supply of available homes has decreased over 29 percent from a year ago. As we all learned back in high school, when the supply of a commodity shrinks, and demand remains the same or increases, the price of that commodity increases. Maricopa County homes are selling for 29.4 percent more than they did a year ago, according to the ARMLS.
Scottsdale’s inventory shrunk 6 percent in June 2012. If you hope to purchase a home in Scottsdale, be ready for a battle with other buyers for the few homes on the market.
“It’s insane, we have no inventory,” says agent Juli Vosmik with Scottsdale’s Dominion Real Estate Partners. “When homes come on the market they are gone within one day, with multiple offers. A year ago we had over 50,000 homes on the market in Maricopa County, now we have 11,000 available homes – and that’s in all of Maricopa County,” she continues.
“I have one buyer who is looking in the under $100,000 price range. We’ve submitted 27 contracts in the last three months and he’s lost out on all of them.”
Competition Steep for Range of Home Prices in Scottsdale
Even the high end of the Scottsdale market is on fire right now, according to Vosmik. “Buyers in the high-end price ranges typically want to take time to think about the home before submitting an offer. Buyers in the $500,000 plus range in Scottsdale right now don’t have time to think. If they wait for more than two days, the house is gone,” Vosmik warns.
Don’t plan on getting a bargain price, either. “The average sales price is typically ending up above the list price,” claims Wake.
According to the Phoenix Business Journal, Arizona leads the nation in housing recovery. How is your market doing – are you seeing improving conditions? We’d love to hear your story.