The question we get most often these days is, “How is the home market”? My response is, “Where is your home located?” If you haven’t heard it before I’ll share with you now that the real estate market is localized. Is the market place the same across the USA. Of course not. We have places in the states today where real estate is appreciating at a nice rate and then other places that have a negative appreciation. Can that same scenario apply to just a state like Arizona? Yes, and it doesn’t take an entire state to make that difference. Maricopa county is a good example and we could narrow that down even further.
If I were to summarize the salient points of our current general market trend I would list them as follows:
- The market is leveling.
- We have a large inventory that we must deal with and that is not necessarily a bad thing.
- We have about 300 people a day moving into Arizona and about 70% of these will move into Maricopa County.
- Rent is appreciating on properties but not nearly at the rate of past appreciation on properties.
- Investors could be called wholesalers because only the best transaction will give them a positive cash flow which will make them pull the trigger on the purchase.
- We’re dealing more with emotional fear today versus the reality of the marketplace so people are slower to buy or are delaying their purchase.
- New home builders will continue to provide incentives for now because they have stockholders to answer too and they simply can not do nothing.
- Mid 2008 will bring improvements to the market as fears are put to bed and people begin to purchase on a want basis again.
What I am going to talk about is “averages” and that may or may not apply to your home. For this exercise we’ll make our comparison to and within Scottsdale, Arizona. I’ll also only be addressing residential re-sales for these examples.
As of today, Maricopa County has 56,959 active listings across the valley of the sun. In September 3,444 dwellings were sold with 125 average days on the market.
Scottsdale, Arizona has 5,455 active listings and in September 280 dwellings were sold with an average 142 days on the market.
The 85262 zip code in Scottsdale, Arizona has 1003 active listings and in September 30 homes sold with an average 195 days on market.
Now lets narrow this down even further to include the geographic area within the borders of Stagecoach Road on the north, Pima on the east, 64th Street on the west and Lone Mountain Road on the south. This is approximately one mile square. Within these boundaries there are 205 Active listings and in September, 14 dwellings were sold with 169 days on the market. The range of homes sold were from 1325 sf. at $425K to 4625 sf. at $1.8M. You might think that days on market were extended because of the two $1M+ dollar homes, when in fact they sold in 8 and 11 days respectively. The average sale was 94.95% of the asking price.
To really bring the point home that real estate is geographic and VERY localized I could compare analogous sub-divisions, but that’s for another article. My point here is that with just this bit of geography the delta between locations is double the percentage of available active homes compared against homes sold and time on the market. This is just a small example that shows that real estate trends are localized.
When it’s time to determine the market value of your home make sure that you find an experienced REALTOR® that knows the current state of the economy and that is intimate with the market trends in their state and community. The market pundits, economists, and even the local news deal in large geographic areas that will not necessarily coincide with your specific area market trends. Is the national and local news wrong? No, however they need to be treated as benchmarks on the scale provided. It’s good information to use when working with local market trends in building a comprehensive comparative market analysis. (CMA) This will give you the best information possible to make an informed decision when you want to market your home.
For current information about the Phoenix Scottsdale market, please contact Jeff Daley at Desert Ridge Phoenix Homes – Scottsdale 480-595-6412 or by email at: Jeff@LuxuryValleyHomes.com About Jeff Daley
Jeff Daley, a REALTOR® and owner/agent at Desert Ridge Phoenix Homes – Scottsdale is a member of the international Institute for Luxury Home Marketing and has taken specialized training in the selling and marketing of upper-tier homes. He holds an MBA from George Washington University and rose through the ranks to senior management within Lucent Technologies before taking early retirement in 1999 and starting his second career in real estate. Jeff has won numerous awards in real estate, is a Certified Luxury Homes Marketing Specialist, a member of the Millionaire Guild, is published in national publications, and is an instructor for real estate. He and his wife Jane have their business in Scottsdale, Arizona where they specialize in Scottsdale AZ Real Estate-Luxury Homes.