Investor's Guide: Analyzing Scottsdale Real Estate Market Trends

Nestled in the heart of the Sonoran Desert, Scottsdale is not only renowned for its stunning desert landscapes but also for its thriving real estate market, robust job opportunities, and growing reputation as a burgeoning business Today, I'm excited to share some valuable insights into the Scottsdale real estate market trends that could help you make informed decisions and achieve your investment goals.

Active Listings - A Shift in Supply

As of September 1, 2023, the number of active listings (excluding UCB & CCBS) stood at 13,404. This represents a 33% decrease from the 20,084 listings we saw at the same time last year. However, it's worth noting that there has been a 12% increase compared to the 11,969 listings reported last month.

For active listings, including UCB and CCBS, there were 15,639 properties available, a 31% reduction from the 22,580 listings in September 2022. Nevertheless, this figure has seen an 8% increase from the 14,476 listings last month.

Pending Listings - A Slight Dip in Demand

The number of pending listings for September 2023 was 4,264, showing a 12% decrease from the 4,862 pending listings in September 2022. Compared to last month, the market also saw a 7.4% decline from the 4,604 listings.

Under Contract Listings, which include Pending, CCBS, and UCB, recorded 6,499 listings. This represents a 12% reduction from the 7,358 listings reported last year. In comparison to last month, there was an 8.6% drop from the 7,111 listings.

Monthly Sales - A Slump in Closed Transactions

Monthly sales for September 2023 were at 5,563, reflecting a 14% decrease from the 6,460 sales in September 2022. In comparison to the 6,261 sales last month, we also observed an 11% decline in closed transactions.

Price Movements - A Mixed Bag

Mortgage rates have surged to their highest levels in 20 years, and this has left its mark on demand in the Scottsdale real estate market. Listings under contract have dropped by 8.6% from the previous month, and closed sales also fell by 11% compared to last month. It's clear that the impact of higher mortgage rates is affecting the market.

New listings remain somewhat scarce, but we have seen a slight uptick in the last two months. Demand remains subdued, as evidenced by the increase in active listings, up by 12% over the past month. However, it's important to note that active listings are still well below last year's numbers.

Price readings reveal an intriguing scenario. The average price per square foot for closed listings has risen by 3.1% compared to the same time last year, now standing at $285.08. In contrast, the median sales price is down 1.6% from last year, at $432,000, and slightly lower than the previous month's $435,000. This divergence in pricing trends can be attributed to the strength of the high-end market compared to the lower end.

Market Balance - A Shift in Negotiating Power

The current balance between supply and demand continues to favor sellers in most markets. However, with supply rising and demand waning, the scales are gradually tipping towards buyers. If interest rates remain in the high sevens or increase further, we could expect market balance to shift within the next couple of months. Yet, it's worth noting that supply typically weakens from mid-November to year-end, which could temper the downward direction in the Cromford® Market Index.

New Homes - A Silver Lining for Buyers

Demand remains more robust in the new home market. Nevertheless, even here, buyers may encounter difficulties in qualifying for loans as interest rates approach 8%.

Market Unpredictability - A Reminder of the Past

A year ago, the market looked weak, and few could have predicted that prices would rise by 3% over the following 12 months. This serves as a reminder of how unpredictable the real estate market can be when looking beyond a few months. At present, the next eight weeks do not appear particularly promising, but it's essential to remember that we felt similarly in October 2022.

Work with a Local Expert

Investing in Scottsdale's real estate market is undoubtedly enticing, but it's also intricate and dynamic. To navigate this market effectively, I highly recommend working with a local real estate expert, like myself. A realtor with a deep understanding of Scottsdale's neighborhoods, market conditions, and regulations can provide invaluable guidance to maximize your investment.

Conclusion

Scottsdale's real estate market offers a wealth of opportunities for investors, from luxury homes to short-term rentals and everything in between. By understanding market trends, local regulations, and economic factors, you can make well-informed investment decisions that align with your goals. Always remember that working with a local expert is a wise investment in itself. If you're looking to explore the Scottsdale real estate market, reach out to me, Connie Colla, your Scottsdale Realtor. I'm here to help you navigate this exciting journey and turn your real estate dreams into reality. Happy investing!