Real estate experts agree the Phoenix metropolitan housing market is primarily a seller’s paradigm at the moment, but Realtors also say it depends on what you are trying to sell.
With reportedly more than 200 human beings moving to Maricopa County every day, real estate experts contend calendar year 2020 could be a boom year in Arizona real estate.
For both the Scottsdale and Paradise Valley housing markets calendar year 2019 saw significant gains in value, price and sales volume meanwhile listing volume continues to shrink.
The Scottsdale Area Association of Realtors offers November 2019 data points and a year-end comparison of keystone market metrics:
In broad strokes, the Scottsdale single-family housing market is excelling in all key economic indicators of the market. Those numbers, as of press time, include:
“For the most part it is a seller’s market,” said Scottsdale Realtors 2020 President Sindy Ready. “Inventory is low and there are more buyers than available homes in the median price range. The exception would be in some of the higher price ranges where home owners continue to compete with new custom building on premium lots in north Scottsdale.”
Ms. Ready contends Scottsdale’s housing portfolio is in the midst of diversification --- but the destination nature of the community trumps all other allures.
“Scottsdale is a preferred destination for many people from other states,” she said. “But we’re competing with other municipalities that offer a broader range of home choices and inventory due to new construction opportunities. California’s outbound population was estimated at 140,000 in 2018 --- many of whom chose Arizona as their destination. That was helping fuel sales and will continue to push up prices and stress supply in 2020.”
Arizona real estate expert, Realtor and founder of Hague Partners, Greg Hague, agrees it is by all general measures a seller's market in Scottsdale and throughout the Valley of the Sun.
“It is clearly a seller’s market, that is my unquestioned opinion --- more buyers than sellers,” he quipped during the final weeks of December. “When I answer that question, I am referring to the bulk of the market, what I call the ‘bread-and-butter’ homes.”
--- Greg Hague, Hague Partners founder
In early December, Scottsdale-based Hague Partners announced its program 72SOLD is now a nationwide endeavor with over 700 Realtors from coast to coast.
“I do now have a national reach,” he said of his recent expansion. “I have hundreds of agents and every market they are in it is a seller’s market.”
Furthermore, Mr. Hague opines Scottsdale may see its strongest real estate years since before the Great Recession and the housing bubble burst fully realized in 2008.
“I think the Scottsdale housing market next year, will have its best year since 2007 and 2008 --- I believe that firmly. I see nothing but positive on the horizon,” he explained. “I love it here! Now that Scottsdale is becoming a mini Beverly Hills ... that big money is coming into town.”
Mr. Hague says a perfect economic storm is brewing above the Valley of the Sun --- and that’s nothing but good news for homeowners.
“The combination of low interest rates, explosive population growth and a vibrant economy all translate to good news for us,” he said. “The job market is great, we have people flooding in here. I think housing values will continue to go up for some time.”
Fletcher Wilcox, Scottsdale Realtors affiliate board member, echoes a similar sentiment on the Arizona housing market.
“The median purchase price of a single-family resale for the first eleven months of 2019 was 6% higher than for the first 11 months of 2018,” he said. “That median purchase price will most likely increase 3-to-5-percent next year. 2020 will be another competitive year for homebuyers looking for limited Inventory in the most-desired price ranges.”
If Scottsdale were to be Beverly Hills, the Town of Paradise Valley would be its Bel Air.
“As far as a buyers or seller’s market, it really depends on what you have to sell,” said Dub Dellis, chief operating officer at Walt Danley Realty. “There is a stronger demand for new or newly remodeled homes. When you look at the market as a whole and specifically the Paradise Valley pocket, you can find price per square foot has increased 9%. But it is a mistake sitting in a home built in 1992 to think that the value of that home is appreciating --- there is such a true demand for new and newer homes.”
Although the new home builds can artificially inflate surrounding prices at the million-dollar price point, Mr. Dellis warns of false tell-tales.
“There are dozens of factors that we analyze to determine what is going on in the market,” he said. “There is no single metric that is a true barometer of value, but if you have to pick one, price per square foot is probably the best.”
--- Dub Dellis, Walt Danley Realty chief operating officer
Walt Danley Realty operates within both the Town of Paradise Valley and north Scottsdale luxury housing markets, homes priced at $750,000 or more.
According the Walt Danley Market Data Report, supply within town limits rose to 330, which was up a hair from 329 last year during this same time. The 12-month average price per square foot stands at $413, up 9% from $384 in November 2018. The six-month average stands at $417, up from $371 last year, while the three-month average came in at $407, up from $385 in November 2018, the market report states.
Also, homes sold for more than $5 million have never been so frequent, Mr. Dellis explains, as through Dec. 15 there have been 44 homes sold beyond the $5 million price point.
Data shows over the last five years:
Mr. Dellis admits things are good in the luxury housing market.
“It has been a good year for us and for the market,” he said. “Sales are as strong as they have ever been at most pricing levels. We have had four sales over $10 million dollars and that has never happened before. The upper end of the luxury market has been very strong.”
But for Mr. Dellis the best measurement of housing value has little to do with median values --- a particular point of interest for those looking to buy or sell.
“Median price is not an effective way to measure value,” he said.
“The fluctuation in median value is a reflection of the segment of the market that is seeing the most activity as opposed to a change in market value. For example, we were seeing double-digit increases in median value when the housing market began to recover. Some people may have thought ‘wow --- my property value has increased by 15%’ because the median value had increased by 15%. The reality was that all the inventory under $100K was snapped up by investors. The median price rose quickly simply because there was no lower-priced inventory available. Not because the true market value had risen.”