Housing report: numbers show steady gains in metropolitan marketplace

In Maricopa County, the median sale price for a single-family home is $268,347, which is up 8.8 percent year-to-date. (Independent Newsmedia/Arianna Grainey)

As the population boom continues to unfold in Maricopa County, the Phoenix metropolitan housing market is on even footing and economic indicators suggest good times are here to stay, experts speculate.

Over the last 12 months, the median sale price for single-family homes in Maricopa County, which is $268,347, is up 8.8 percent while active listings are down 22.1 percent and closed sales are down 3.7 percent, according to data provided by the Scottsdale Area Association of Realtors.

Over the last 12 months there have been 120,621 active listings throughout Maricopa County — including the municipalities of Scottsdale, Phoenix and the Town of Paradise Valley — of which 54,567 of those sales have been closed, numbers show.

“While the total number of homes sold and the total dollar volume of homes sold in the Valley is better than 2017, real estate is about sub-markets, neighborhoods and price ranges,” said David Schmid, a Realtor at Berkshire Hathaway Home Services. “It is in these various sub-markets, neighborhoods and price ranges that we see some imbalance between supply and demand, so buyers may have to submit offers on more than one home, or sellers may have to wait for a buyer. But, on the whole, our Valley market looks good now and for the foreseeable future.”

The largest sub-market of the Valley of the Sun, experts agree, is the city of Phoenix where in calendar year 2017 Phoenix Realtors brokered $5.1 billion, data provided by Walt Danley Realty illustrates.

Numbers show a strong increase to the average price per square foot throughout the city of Phoenix — going from $123 per square foot in September 2015 to its $159 price point in July 2018 — as single-family homes up for sale remain largely constant.

Local Realtors say consumers are encountering a sellers market in the $250,000 to $400,000 price range throughout the Phoenix metropolitan housing market. (Independent Newsmedia/Melissa Fittro)

The amount of single-family homes for sale in Phoenix is at a comparable level today — which is at 2,856 active listings — as it was in August 2015 when the number of homes for sale sat at 2,895.

In the city of Phoenix in September 2015 there were 1,332 individual dwelling units for sale compared to July 2018 there were 1,546 dwelling units for sale, numbers show.

Mr. Schmid, who is president-elect at the Scottsdale Area Association of Realtors, says for the everyday buyer throughout the Valley of the Sun the fear of the rising tide of the economy is getting prospective homebuyers into the marketplace.

“The fear of rising interest rates may be getting a few buyers off the couch and looking for a home,” he said. “A solid market allows middle market sellers to sell and move up and upper market sellers to sell and downsize.”

The size of the Phoenix metropolitan housing market oftentimes doesn’t allow for hard data to translate in to the identification of trends, Mr. Schmid says.

“The market is exceedingly large, so trends can only change things around the edges,” he said of housing markets like Scottsdale, Arcadia or the Town of Paradise Valley. “Of course, by definition, trends also come and go. So, changing tastes in architectural styles, interior design, tiny homes, energy efficiency, condos, and the like, represent marginal preference changes by consumers and opportunism by builders.”

In June of this year, the Federal Reserve set the national interest rate range from 1.75 to 2 percent.

The luxury multifamily housing market continues to be a growing segment in the overal housing market, which is being driven by an emerging desire for the luxury level, lock-and-leave option in desirable ZIP codes. (Independent Newsmedia/Arianna Grainey)

The Scottsdale sub-market

For the city of Scottsdale, the housing market started in a lull, but has since picked up steam, according to Becca Linnig, a Realtor with RE-Max Excalibur.

“The market experienced a small delay at the start of the school year, but has made a quick recovery,” she said pointing out all economic indicators suggest a steady, healthy housing market. “There is speculation of a ‘bubble’ from consumers and economists, however, I have seen a strong market with moderate appreciation, which indicates a healthy future.”

The median sales price in the city of Scottsdale has increased 8.5 percent over the last calendar year settling at $454,436; however, numbers are also broken down to subsections of the marketplace showcasing cheaper homes in pockets of the community.

A view of a sign signifying Old Town Scottsdale in the heart of the community. (Independent Newsmedia/Arianna Grainey)

Data provided shows single-family homes in Old Town Scottsdale have a median sales price of $300,802 compared to a median sales price of $308,489 for south Scottsdale, which represents 7.9 and 9.8 percent sales price increases, respectively.

Over the last calendar year the amount of single-family homes sold in Scottsdale has decreased .3 percent, but Old Town home sales are up 8.2 percent and southern Scottsdale homes have seen a .9 percent increase.

Thus far in 2018, there have been 5,908 single-family homes sold in Scottsdale, numbers show.

“The market has seen a small increase in the median sales price, however, there is still affordable housing and a need for additional inventory,” Ms. Linnig points out. “The shortage of homes for sale continues to be an issue for buyers.”

In Scottsdale, there are 24.5 percent fewer homes for sale, which experts say is fueling healthy gains in both median sales prices and closed sales. There are 21,717 active single-family home listings in the city of Scottsdale, as of Aug. 31.

“Inventory throughout the Valley is down,” said Rebecca Grossman, CEO of the Scottsdale Area Association of Realtors. “Scottsdale numbers are for the most part lower than Maricopa County as a whole, with the exception of south Scottsdale which is down 17 percent vs. Maricopa County at 22.1 percent.”

Rebecca Grossman

Ms. Grossman says the principles of macro economics are very much in play in both Scottsdale and the larger metropolitan housing market.

“Inventory continues to lag behind demand especially in the more affordable price ranges,” she said.

“Until home builders begin to fill these price points and investors release some of their inventory, we may not see a lot of change other than the usual seasonal up-tick in the fall. We don’t anticipate much improvement other than the normal cycle improvement that the fall months bring to the market. Other communities are bringing in new home projects at a quicker pace than Scottsdale and have more developable land.”

In addition, Ms. Grossman says a lack of affordable inventory is pushing some buyers outside of Scottsdale city limits.

“Lack of inventory in the $350,000 — $500,000 range may lead buyers out in to other communities that have homes available; however, Scottsdale remains a very desirable place to live so many will push their range to find a home,” she said. “Price appreciation is strong and steady, which is what you want to see. This is surprising given the inventory constraints.”

An overview of the Town of Paradise Valley where million dollar home values are commonplace. (Independent Newsmedia/Terrance Thornton)

The luxury game

No market illustrates the idea of affluence better than the Town of Paradise Valley, but just as any marketplace, norms and emerging trends are beginning to shift, experts say. However, as much things change, they stay the same, according to Dub Dellis, who serves as chief operating officer at Walt Danley Realty.

“It is not the same market that we are seeing in the production home market — in Paradise Valley, the market is more in balance,” he said, noting a new desire of the luxury homebuyer. “It depends on what the product you are selling, but there has been an interest in new builds than we have previously experienced.”

Numbers show tens of millions of dollars change hands annually in the Town of Paradise Valley when real estate deals happen, and over the last three years single-family housing inventory has remained steady. Data shows:

  • In April 2016, there were 388 traditional single-family housing listings, of which 31 were sold with an average sale price of $1,532,197.
  • In April 2017, there were 348 traditional single-family housing listings, of which 50 were sold with an average sale price of $1,77,684.
  • In April 2018, there were 327 traditional single-family housing listings, of which 41 were sold with an average sale price of $2,512,352.

Mr. Dellis points out list price and true value has begun to inch upward in the luxury housing space.

The Walt Danley Web Development Team. (Submitted photo)

“The reality is, when you look at the pricing — it has been flat for a few years, but there has been an uptick,” he said.  “The average price of square foot going up is due to the product that is selling. It all depends on the type of property you have. If you have a newer property, that is what the buyers are looking for, but if you are in an older home that isn’t updated, the prices are going the other way.”

Mr. Dellis points out the nuances of luxury real estate have very little impact on the greater area housing market and vice versa.

“Everything is local and real estate is remarkably local,” he said. “It has been a robust time in the luxury housing market. When you really look at the numbers, the production home market really isn’t a reflection of the luxury housing market. There is a big difference for a market selling $2 (million) to $3 million homes in Paradise Valley and $250,000 to $300,000 homes in Peoria — they are not dependent on each other.”

Mr. Dellis explains the production home market is concerned with the federal interest rate while the luxury home market keeps an eye on Wall Street.

“A lot of the intensity there in the production housing market is interest rates,” he said. “The Paradise Valley and north Scottsdale market is typically tied closer to what is going on in the stock market.”

As Walt Danley Realty embarks upon a greater footprint in north Scottsdale — the group now has an office in the DC Ranch area — Mr. Dellis says the idea of luxury downsize is becoming a want his group is looking meet.

“The buyers today are more educated than ever before,” he said, pointing out consumers know what they want.

“We have shifted from being the provider of the information and our role now is to interpret that information. There is a big demand for that kind of product here in Paradise Valley. There is a demand for a newer, smaller product in Paradise Valley and there is a lot of projects coming out of the ground to help serve that need.”

Independent Newsmedia Arizona Managing Editor Terrance Thornton can be contacted at tthornton@newszap.com

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