Market Notes

Fourteen Years of the Scottsdale & Paradise Valley Market

I started writing a monthly market letter in April 2012, near the bottom of the crash, and I have not stopped. What follows is what I said each year, using the numbers I published at the time.

A caveat worth stating up front. Most of this period was a rising market. Calling an expansion correctly is easier than calling a decline, and I have not yet had to write to you through a genuine downturn in this market. What this record shows is consistency and presence over fourteen years — not clairvoyance.

2012–2015: off the bottom

2012Almost nothing for sale

The first issue went out on 16 April 2012 with a chart showing Scottsdale's median single-family price near its low and just beginning to turn. There were 1,516 single-family homes actively for sale in the whole of Scottsdale — inventory sitting around its lowest level since 2004, against 5,015 homes that had sold the previous year. I wrote that people were often shocked when I told them prices were rising. They were. I also warned that as inventory built through November and December there would be some downward pressure, which is the kind of caution that reads better than a forecast.

2013The distressed market ends

New listings fell 68% year over year, and I told buyers plainly that they could no longer expect to find distressed homes. Median price had risen every quarter since Q2 2011. The number of homes for sale across the region had dropped by more than 20,000 since Q4 2011. In 85258, average sold price was up 4.9% in Q1 against the previous quarter. The market was busy and, for buyers, genuinely frustrating.

2014Resistance shows up

A different picture. With 4,566 Scottsdale homes listed or under contract, 54% had already taken at least one price reduction. That is the number I kept coming back to — a market still rising, but with sellers ahead of buyers on price. I told people to expect days on market to increase as inventory rose, and noted that even a 10% fall would leave very few recent buyers underwater.

2015A gap opens between asking and selling

Scottsdale's average list price was up 6.4% on 2014 while average sold price was down 1.5% — the clearest sign that year of what I described as inventory that was not well presented and overpriced. There were 1,063 homes under contract at an average list price of $611,000, and I said that if they closed near 95% of asking, prices were headed for a bump. Rents told their own story: average single-family lease rates reached $2,106 a month, up 41% from $1,710 the year before.

2016–2019: the long grind up

2016A slow start, then a threshold

January contracts came in 25% below the same month in 2015. I stayed positive on the grounds that we entered February with the same active inventory as the year before, and that turned out to be the right read. By May the average list price in Scottsdale was $940,000 — closing on a number that would matter the following year.

2017Scottsdale crosses a million

Average list price in Scottsdale passed $1,000,000 for the first time. Valley-wide, monthly median sales price reached $232,500 against $221,000 a year earlier, up 5.2%, with price per square foot at $151.20 versus $141.21, up 7.1%. Underneath it, population: more than 80,000 additional people in a single year. That is the number that explains most of what followed.

2018Still below the old peak

Worth remembering how long the recovery took. Even in 2018, with prices rising for six straight years, CoreLogic had the average Arizona home still worth 16% less than at the 2006 peak. Listing success rates were trending up toward a band around 80%. Unemployment sat at 4.1%, a seventeen-year low. I flagged that rate rises can pull demand forward as buyers move to lock in before the next one — a mechanic that would matter enormously four years later.

2019The interest rate trap

Median sales price finished 2018 up over 8% in both Scottsdale and Paradise Valley, and Case-Shiller had Phoenix at an 8.1% annual rate. I forecast 3–6% for 2019 — deliberately below the prior year. The reason was something I called the interest rate trap: a move-up buyer holding $500,000 at 3.5% is very hard to move into $800,000 at 4.5%. Sales volume bore it out, falling from 1,297 transactions to 1,110, with dollar volume down 8.9%.

2020–2022: the shock and the surge

2020Writing through the uncertainty

In April 2020 I broke the monthly pattern and wrote twice, eleven days apart, because staying in touch mattered more than the schedule. On 18 April, with new listings down 22% year over year, I wrote that while there was pressure on both supply and demand, there was so far limited pressure on prices — 119 homes listed that month had already closed at an average of 97% of list. I also wrote that families were discovering what it meant to spend real time at home, and that many people would think more deeply about their housing situation as we came out of it. By year end absorption was under two months and average sold price had moved from $617,000 to $688,000.

2021Vertical

On 9 February average price per square foot broke $220 — $30 added in a little over six months, roughly 16% in half a year. I wrote that it would not take much for appreciation to exceed 30% and possibly 40% over the following months, based on low inventory and strong fundamentals. It did. By November the first crack appeared: average closed price per square foot slipped below 100% of average list price per square foot for the first time since March 2018.

2022The top, and the turn

Paradise Valley's median sales price hit $3 million — an annual increase of 37%, against 17% the year before. The definition of the market changed with it: the low end, which used to mean under $250,000, had become anything up to $500,000. Then the Fed moved, and I wrote about the mechanism that would define the next three years — a seller holding a 2.5% loan has very little reason to trade it for a 4.5% one.

2023–2026: the rate-locked market

2023Both sides adjust

Mortgage rates had peaked on 10 November 2022, and 2023 was the year everyone absorbed it. Sellers held fairly firm on price; buyers settled into the new reality. Demand was not gone — in April, listings under contract pushed through 10,000, a 14% monthly increase that is almost unheard of for that time of year. A frozen market and a dead one are not the same thing.

2024High rates, and the market moves anyway

Thirty-year fixed rates ran between 7% and 7.25% through the spring. I wrote that I was seeing tailwinds regardless, and the contract ratios supported it — Scottsdale at 30, up 15%, Paradise Valley at 21, up 20%. The point I kept making was that falling rates are not straightforwardly good news: they improve borrowing costs and push prices, and affordability does not necessarily improve.

2025The top of the market decouples

Rates crossed back above 7% in January before easing near 6.6%. The clearest theme of the year was divergence: buyers at the lower end were not enjoying rates over 7% at all, while the higher end proved far less affected. That gap is the single most useful thing to understand about this market right now, and it is why valley-wide averages tell you very little about Paradise Valley.

2026Luxury pulls away

January list prices came in 8% above January 2025, with negotiated selling prices running below 93.5% of original list — a gap that tells you where the leverage sits. By March, sales over $3 million were up 26% year to date and closings over $10 million had already reached 81% of the whole of last year. Rates dipped briefly to 5.99% in late February before returning toward 6.4%. New listings were down 7% year over year, which stalled inventory growth: up 9% on last year one month, narrowed to 5% the next.

From the archive: March · June · July

What the record actually shows

Three things run through all fourteen years. Inventory drives this market more than anything else — it is the first line of the first issue in 2012 and it is still the number I look at first. Interest rates move behaviour before they move prices, and usually in the opposite direction to the one people expect. And Paradise Valley and the upper end of Scottsdale operate on their own logic, which is why a valley-wide median is close to useless if that is where you own.

I have been wrong about timing more than once and I have left those issues exactly as they were sent. That seemed more useful than a tidy version.