Welcome to the latest issue of our Luxury Report. This report focuses on homes priced above $1,000,000 in three zip codes in North Scottsdale – 85255, 85262 and 85266. The data for this report comes from the Arizona Regional Multiple Listing Service and covers January 1, 2019 December 31, 2019. [Click to read the Scottsdale Luxury Real Estate Report]
Scottsdale Real Estate Market Overview
Phoenix Metro Luxury Market
As we go to press, general market news for the luxury home market is quite positive. The total number of homes in the entire Phoenix Metro Market that closed between 1/1/19 and 12/31/19 is slightly ahead of the number that sold during the same time period in 2018. In 2018, 2,092 homes closed escrow during the period. This year, during the same period, 2,245 closed; a 7.3 percent increase.
North Scottsdale Luxury Market
Looking specifically at the three zip codes that comprise North Scottsdale, luxury home sales were ahead slightly with 669 closing escrow in 2019, compared to 649 closing in 2018. . This represents a 3.1 percent increase in units sold. Other statistics paint a stronger picture. The number of days on market decreased slightly from 215 days to 206 days, which is a modest improvement, likely due to lower inventory availability. However, there was a definite increase in dollars per square foot. In 2018, the median price per square foot was $345, and in 2019 it increased to $366. This is a 6.1 percent increase, which, for the average size home of 4,941 square feet, translates into $103,761 of additional potential upside.
As we head into the busier season, there is one area of concern, but reasons for optimism also. The point of concern relates to a slower summer sales season than 2018. If we look at the number of homes that went under contract during the 2018 summer, June 21- Sept 23, last year 171 homes were sold. However, during the summer of 2019, only 132 homes went under contract during the same timeframe, a 22 percent decrease. Since we are not seeing a general decrease year over year, we are hoping that this was a seasonal anomaly that will adjust as the year continues.
There is also encouraging data when looking at luxury inventory. Inventory is measured by the number of available homes, but more importantly by days of inventory. Days of inventory means that at the current sales rate, the number of days it would take to deplete all available inventory. In the luxury space, this is always high compared to the general market. For the past year, the number of days of inventory remaining is at one of the lowest points it has been in years. As of December 31, 2019, there are 351 days of inventory, which is significantly below the running average of 6054 days, and dramatically below the 684 days of inventory available in December 2016.
Inventory is down across the housing market in the entire Phoenix metro area. Looking at the market of all homes listed below $1,000,000, there are only 39 days of inventory and at $500,000 and below it drops even further to 33 days, which is the lowest point since at least 2011.
If you are considering selling at this time, you are probably wondering, “what is my home worth in this market?” We have some tools to help answer this question. The easiest to use is our Scottsdale home valuation website. Simply go to https://scottsdalehome.forsale/PriceMyHome – enter your home’s address, answer some simple questions, and you will instantly receive a report like the one below, providing you with a home valuation range. If you are interested in a more in-depth valuation, we have statistical tools and models available to provide a more comprehensive pricing picture. Just give us a call at 602-603-0708.