2019 Scottsdale North Mid Year Real Estate Market Update
A Teachable Moment
Wow. The results for this quarter provide a great opportunity to better understand the Scottsdale North market dynamics. Below I will show you how critical patience is to the real estate selling process.
My last two quarterly updates in this paper detailed an unprecedented decline in housing demand in the Valley. I described the dramatic affect it had on sales. To illustrate the trend, I showed the graph below displaying the last three years sales numbers in Scottsdale North. It is easy to see the plunge in sales numbers starting last fall, and the lingering effects of low demand through 2019.
In each of the quarterly updates, I stressed that while these while these changes appeared to be dramatic, the fluctuations were really normal and consistent. I tried to make clear that there was no reason for panic or even alarm. Markets continually struggle to achieve balance and can change very quickly. I ended my Q1 Market Update in April by predicting you should, “watch for a flurry of sales to happen in the next quarter…” Below is a graph of what actually happened:
As you can see, the shift in the market was quick and dramatic. We went from an unprecedented decline in sales for two quarters, to seeing the largest unit sales count ever measured for a calendar month in the Greater Phoenix market in May. June had the highest dollar volume total for any June in history.
What does this mean for Scottsdale North?
We don’t have the space here to explain the specific reasons for that shift. The larger point is that the Scottsdale North Market is healthy and thriving. The only obstacle keeping sales down is the chronic lack of inventory. Even when seasonally adjusted, there are just not enough homes available to meet the demand. When you compare 2019 to the last two years, you see a 38% decrease in inventory:
We need more homes to sell to meet demand. Economic theory tells us that when demand increases and supply remains the same, the higher demand leads to a higher equilibrium price.
Here is my advice about the market moving forward:
For Buyers: If you are price conscious, you might relax your standards. Try to find a home that is close to fitting your needs now, because it looks like waiting could be expensive;
For Sellers: You are in good shape and patience can be a virtue. I have two tips:
- If you need to sell, pricing in a market with low inventory is difficult. Make sure the market gets complete exposure to your home. We had one recent sale that sold at $26,000 and another at $37,000 above the listed price, because we allowed the market the chance to speak and set the right price.
- If you have a home with a wart – something that makes it less desirable to the market like a dysfunctional floor plan, lack of updating, or proximity to a major road – this is your market. Low inventory means fewer choices. This helps buyers to get past their unreasonable pickiness.