Scottsdale Real Estate Report July 2022
The Scottsdale Real Estate market continues its return to normal, that return to normal hit a bump in the road in July. The bump in the road in this case was slower sales of the summer months that have been part of the Scottsdale and greater Phoenix market for better than two decades. The normal slowing was absent over the very heated Covid-19 Real Estate market of 2020 and 2021, well we are back to normal, sort of.
The data below shows a significant slow down in both total sales and values. However, it is important to take a closer look at the data and see what is the underlying reason for the slowdown. First, the traditional slower summer months accounts for a 20% drop in sales volume based on history. Second, there was a large drop off in the higher end sales (many of those potential buyers were enjoying much needed vacations) therefore returning a lower average sales price for all Scottsdale home sales. Third, the previous months, June data included included a record setting $28 Million sale, Altitude at Silverleaf, spiking the average sales price higher for June.
|Maricopa County||Total Sales||Average Sales Price||Price Per SQFT||DOM|
Month to month data can fluctuate a great deal when dealing with a small sample set such as just the City of Scottsdale, that is why most published real estate data is for the county vs a city. When looking at Scottsdale prices from April 2022 to July 2022, overall prices are down 4.5% and Price per square foot is down 3.4%, the actual decline in prices probably falls somewhere in between those two numbers.
So what is really going on with the Scottsdale Real Estate Market? Well, the market is cooling from the heated pace of 2020 and 2021. Incredibly low mortgage interest rates fueled that heated pace. Mortgage rates jumped significantly from March to May, almost doubling in that time. Mortgage Rates have now moderated in the mid 5% range, they actually dropped last week after the FED raised the FED Funds rate, you read that correctly the FED raised rate and mortgage rates dropped, why is that. Well the FED does not set mortgage rates, mortgage rates are more closely tied to 10 Year Bond which is set by the market. The 10 year bond rate came down because the market thinks the FED will slow there FED Funds rate increases moving forward, that remains to be seen.
That is a lot to take in when you are just looking at buying or selling a home in Scottsdale. To keep it simple (Too Late), buyers in this market will have more choices of finding the right home and may see some price declines but remember those price decreases will most likely be due to higher interest rates.
Sellers should certainly pay close attention to pricing your home correctly, unlike the previous two years where a rapidly increasing market would correct a pricing error, a flatter market will make selling your overpriced home much harder. As always correctly priced homes are selling quickly and over priced homes are not selling.
The long term value of Real Estate and real estate in Scottsdale remain strong. The valley has strong jobs, it is still a good value compared to other parts of the country and mortgage rates are sill at historically low levels in the mid 5% range. As more of the market adjusts to the current mortgage rates, sales with strengthen. The Market will give back some of the price gains from the past two years