By Scott Gaertner, Associate Broker
Home values in Scottsdale North, most of the Valley, and much of the nation, completed a historic first half of the year. Home values went up even faster than in 2005 when you didn’t even need a job to get a loan to buy a house! On the back page of this newspaper, we have tabulated the sales results for the leading communities in the heart of Scottsdale North’s main zip code, 85266. We hope you will find it interesting.
The Market Is Shifting!
In last month’s article, “How Can You Be Successful In a Changing Real Estate Market?,” I discussed how the market is beginning to shift to a more even balance, with sellers having less of an edge. That market shift has become more pronounced and you are going to start hearing and seeing about this a lot wherever you get your news. Much of it is just to get your attention or scare you. Some of it will be flat-out wrong. I recently corrected one report from a local news station that erroneously quoted that inventory is up 92% since February. That was true in only one tiny segment of the market! With that, I decided that we should discuss it in depth.
Is The Market Crashing?
No! This is not a market crash. The buyer-to-seller balance is easing, but prices are forecasted to continue to rise for the foreseeable future. They will just rise at a slower pace than the first half of the year.
We are hearing about this now because a close look at the mid-year statistics reveal that most of the gains were focused on the first quarter. Now that we are in the third quarter, upward pressure on pricing has eased significantly. It is newsworthy, but probably not as newsworthy as they would have you believe.
As we mentioned before, this market has been controlled much more by the supply (or, more accurately, the lack thereof) rather than demand. But now, supply is finally starting to increase in a way that indicates the extreme sellers’ market is rapidly moderating to just a plain old sellers’ market. (This is less true in Scottsdale North than the rest of the Valley.)
Last month I cited the Cromford Market Index (CMI) to evidence this change. The CMI provides a short term forecast for the market balance. Values below 100 indicate a buyer’s market, above 100 indicates a seller’s market, and 100 is a balanced market.
Last month there was hype due to the graph showing a sharp decline in the buyer’s favor. But context is key, and I’d like to provide you with that context by sharing the long term CMI values. The chart in the left column shows the CMI index from the year 2000 until today.
The previous chart shows that although the seller’s advantage is easing, we are still far above the pre-pandemic record in 2005—312 was the highest index from when number tracking began! And you may recall that wasn’t even real money; anyone who could prove they could breathe could get a loan.
Scottsdale North Statistics
Scottsdale North the last two years – feel good!
Where Is The Market Headed?
Speaking of the market change, Tina Tamboer, Senior Housing Analyst with Cromford Reports, says, “We are seeing a shift from an extreme sellers’ market … it’s still a sellers’ market, but buyers should have a little more hope.” She feels that the Valley’s strong population growth will preserve the sellers’ market for some time to come, and predicts that home prices will go back to a normal 5% to 6% annual increase. So if you are looking to buy a home in Scottsdale North, you should feel good, too!
Well, that’s the real scoop, and if you took the time to read this, you know more than 90% of the rest of the world. If you took the time to read this because you are thinking of buying or selling, we can help! Check out the Scott Gaertner Group statistics on the back page and give us a call at 480-634-5000. We have a proven track record of selling the most homes in Scottsdale North for the most money.
Scott Gaertner is an Associate Broker with Keller Williams Northeast, who for the past 25+ years has helped more people to find their lifestyle niche in the Scottsdale North area than anyone else. He also contributes his thoughts on lifestyle interests in the area.