Real estate like all consumer products is affected by supply and demand. Both sides of the equation are important but at times one side drives prices more than the other. Right now supply is the big story in the real estate market.
Short Term Real Estate Supply
The current supply of single family homes in Scottsdale is far too low. It’s pushing up competition and it’s pushing up prices. And quite frankly it’s frustrating buyers.
Active Homes For Sale: 1,266
Active With Contingencies: 345
Pending Sale: 472
Closed in July: 411
Closed Per Month (Average last 6 months): 481.
That means there are only 2.6 months of inventory on the market right now. Anything under 6 months supply is a sellers market. Under 3 months of supply is a very strong sellers market and homes should be selling in less than 90 days.
If your home has been on the market for more than 90 days without an offer in this market something is going wrong.
Affordable Scottsdale Housing Hard To Find
If you are looking for a home under $500,000 in Scottsdale the market is even tougher. Only 364 homes fully active for sale and a monthly average closed amount of 312. That adds up to a a total inventory of only 1.2 months supply. That’s multiple offer situations, bidding wars. Homes will come and go within days of listing.
If you are a buyer trying to get into Scottsdale for under $500,000 it’s just a reality that you will need to be ready with all your ducks in place.
Of the 267 homes closed in July under $500,000 in Scottsdale 101 of those were all cash deals. Compare that to only 18 FHA loans.
Hedge funds and investors are still betting on our area.
Long Term Scottsdale Real Estate Market
Short term the real estate market is a roller coaster. Right now we have a sellers market after almost 6 full years of misery for sellers. Here’s some stats to consider which are going to help shape our longer terms prospects.
Greater Phoenix has consistently outpaced the U.S. population growth over the last 18 years. Projections show the region is expected to grow 58% by 2030 reaching 6.3 million people.
– Source: U.S. Census Bureau, 2009
That’s only 18 years away. I’m not sure if that estimate has been revised downward but it’s a pretty stunning figure.
For Scottsdale the projections are somewhat more manageable.
2008 population – 242,376.
2030 projected population – 286020.
Projected Growth: 18%.
Longer term residents wil remember when everything north of Shea was desert and remember the intense development. To grow another 18% will take quite a bit of increased real estate creation. This growth should have a positive effect on the prices of existing real estate.