Here’s the latest update on what I see taking place in the Scottsdale real estate market.
Essentially, buyer demand for Scottsdale homes remains weak with only 9% of properties under contract for purchase. This compares to 7% in November. As a result, further price declines will likely occur to attract buyers and correct imbalances in activity.
Scottsdale’s performance is comparable to that of Fountain Hills which also has only 9% of active properties currently under contract for purchase.
Scottsdale real estate’s poor performance is likely due to the higher average price of homes and the fact that a high majority of buyer demand and activity is taking place at the lowest price ranges of the market. The number of buyers considering Scottsdale is minimal compared to other Valley cities. As a result, Scottsdale pricing likely will have to decline further.
Available Scottsdale Homes
Unlike other Valley cities where inventory has shown marked improvement, Scottsdale is experiencing rising inventory again as can be seen by the graph above. As well, though the early part of 2008 appears to be a peak, current inventory looks like it will match that seen in latter 2008. So, inventory continues to remain a problem for Scottsdale homeowners who wish to sell their properties.
Scottsdale Homes Under Contract
The number of homes under contract for purchase in Scottsdale appears to be right in lin with 2008 trends. So, buyer activity shows no marked improvement here.
Scottsdale Home Sales
Scottsdale home sales and real estate continue to show weak activity as compared to other cities. If this doesn’t improve in the short term, we could see 2009 prove to be lower in performance than that of 2008.
Scottsdale Real Estate Outlook
Overall, my estimation is that Scottsdale home prices will decline further in order to develop toward a stronger equilibrium between Seller and Buyer within the Scottsdale housing market.
A combination of factors including resistance to pricing adjustments, jumbo loan costs and financing availability, lack of buyer reserves for equity down payments, loss of investment portfolio strength due to declines in the stock market, and lifestyle pullbacks are likely causing the anemic levels of sales and buyer demand for Scottsdale homes.
Given the low activity levels, home buyers looking for properties in Scottsdale will need to be careful and secure strong values when buying a home. There is a significant level of risk that a buyer buying a property in Scottsdale will see appreciable declines in the value of their property the more expensive the property is. For instance, a 10% decline on a $1 million Scottsdale home is $100,000 vs. $10,000 for a $100,000 Chandler home.
For current homeowners looking to sell their Scottsdale home, these sellers will need to reevaluate their pricing strategy to make sure it is in line with market conditions and take an aggressive approach to pricing. Though this approach may be difficult in the short term, these homeowners will appreciate having done so once their property is sold and no longer subject to the gyrations and changes in the Scottsdale real estate market.
If you would like information on pricing for your home and how I might be able to help you, feel free to Contact Lorti Homes.
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