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The Phoenix/Scottsdale Market Has Changed – May 2016 Market Update

With the 2016 home buying and selling season well upon us, we are starting to get a feel for what the rest of the year may look like.  Just in January of this year I attended the Inman Connect NYC Conference, where many of the top real estate agents and industry partners attend on an annual basis.  Some of the topics covered were 3D technology for selling homes, Virtual Reality to tour homes in the future, consumer sentiment of the real estate markets, weak global markets, a strong and improving US market, luxury sales, and much more. It was so intriguing to see how technology has, is, and will continue to shape our real estate industry.  One thing is for sure; the role of the REALTOR® may change and be revised, but the necessity will surely stay.

Interest Rates:  The sentiment of the investment markets seems to be that the US Federal Reserve will raise rates at their coming meeting in June, with the expectation to be approximately by a quarter point.  Whether this is warranted or not remains to be seen, but the first time rates were raised in a decade was just last December.  With unemployment fairly low sitting at 5.0% currently, the US market seems to be on an individual platform when compared to the global markets, which is another reason they are considering raising rates, as the US market is a major driving market, to head the push. Whether or not they raise rates in the near future, let’s also be mindful that although there may be a perceived correlation between interest rates and home sales, there is no real proven relationship up or down.

Distressed Sales:  Practically non-existent, but still breathing, are the short sales and foreclosures of yesteryears.  When looking at our market as a whole, the distressed property market consists roughly of 3.9% of our sales.  Scottsdale however, a bit less impervious to the volatility of our cycles, for better or worse in regards to appreciation or depreciation, has distressed property sales at about half of the market at 2%. An additionally positive sign is that year over year from April 2015-April 2016, we decreased from 5,589 pending foreclosures to that of 4,146 pending foreclosures, a 25.8% decrease.

Inventory: Our total inventory has slightly increased year over year. For example, in April of 2015, we had 25,889 total listings, whereas in April of 2016 we had 27,015 total listings. We are currently sliding between 3.25-3.5 months of inventory, which is still relatively low. For the Phoenix metropolitan area, we typically like to approximately 5 months of inventory to be a truly balanced market.

Days on Market Indicators:  As consumer sentiment increases, typically we see the days on market average decrease, as long as supply and demand remain fairly balanced. Please remember that our market is split up into several submarkets, but when looking at it as a whole (Maricopa County), we are seeing our average days on market hover near 78 days currently. While looking at this number year over year, which is how we can be the most accurate with working days and holidays, etc, our average has decreased by 6 days from 84 days last year in April.

Sub-Markets:  This is where the rubber meets the road.  For market update purposes, you should see how the market is performing overall for days on market averages and medians, but for Scottsdale, we will lean towards evaluating the top 3 ranges.  The submarkets can be defined as 250k-500k being in a sellers’ market, 500k-750k offering a balanced market, and 750k plus certainly in a buyers market, with the higher the price point, typically the more negotiating power the buyer has depending on how the property is priced.

*DOM summations courtesy of Tom Ruff @ The Information Market and ARMLS.

**High Sales Year-to-Date in Scottsdale:

1. $13,700,000. 23036 N. Via Ventosa Dr. Scottsdale, AZ 85255. Sold off market on 4-22-2016: 25,989 sq. ft., situated on 6.61 acres was comprised of 9 bedrooms, 17 baths, it’s own two story exercise building with racquetball court, tennis court, spa facility, and olympic sized pool, and more, located in Canyon Heights.

2. $6,000,000. 6415 E. Exeter Blvd. Scottsdale, AZ 85255: Sold through MLS on 1-6-2016:  9,221 sq. ft. on a .95 acre lot, comprised of 5 bedrooms and 8 baths, a glass conservatory and a 1000+ bottle climate controlled wine cellar, located in Lombardi Estates.

3. $5,700,000. 10891 E. Mountain Spring Rd. Scottsdale, AZ 85255. Sold through MLS on 5-23-2016: 8,015 sq. ft., situated on a 1.21 acre lot, comprised of 5 bedrooms, 5.5 bathrooms, single level home and is new construction, adjacent to the NAOS preserve, located in Silverleaf at DC Ranch.

4. $5,400,000. 18833 N. 101st Way Scottsdale, AZ 85255. Sold through the MLS on 1-6-2016: 8,300 sq. ft., 3 bedrooms, 3.5 bathrooms, situated on a 28,000 sq. ft. lot, w/ guest casita, located in Silverleaf at DC Ranch.

Roger Banning

Roger Banning has been licensed since 2002. He is a Certified Residential Specialist, Certified Luxury Home Marketing Specialist, and was a 40 Under 40 Award Winner by SAAR for 2016. An ASU Sun Devil at heart and an avid hockey fan, he enjoys running, hiking, playing hockey and going back to Alaska each summer. He can be reached at 602-326-6740, roger@rogerbanning.com, or online at www.BanningRealtyGroup.com.