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Jeff Cameron

HomeSmart

480-652-2004

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HOME VALUATIONS IN BOTH PHOENIX AND SCOTTSDALE SHOW INCREASES

November 2, 2009 By Jeff Cameron

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It is difficult to judge exactly what is going on with valuations at any given time, unless the are raging up or down.

The Case Shiller system uses resales of the same home over time. But the home could have been improved, updated or have a pool added to it. How do they account for that?

Using the median price, as is mostly reported, is a very inaccurate method of determining market movements. Recently our median price plummeted. There were 3 main reasons for such a dramatic decrease. First, the market is lower. Second, lower end homes are selling to investors and first time home buyers. This alone will lower the median price(median is where half the homes sold above that price and half below). Third, financing on luxury homes became so scarce, the number of luxury homes selling dropped. Again, this alone will lower the median price. The values in moderate to entry level homes could be rising in this situation, yet, median price dropping. Therefore, median price is a weak method of measuring where the market.

I prefer the average price per square foot method. I don’t like to use this as a method of valuation for a specific home, but I believe it gives the best look at where the market is headed.

Below is a graph for the average price per square foot(ppsf) of a home in the metro Phoenix market place for the first 10 months of 2009, both listed price and sales price. We entered the year averaging $80.95. By March we appear to have bottomed at $73.51. The October reading is $82.43. This is a great demonstration of a bottom. One could question if it is a false bottom? But only time will tell as markets are difficult to forecast. This is definately good news for the market. Other factors could be that more high end homes are selling bringing up the average. Another possibility is the fact the $25K homes selling March are now selling for around $40k. Weren’t those investors smart! (You can click on the graph to make it larger and easier to read)

Oct Phx ppsf

Here we have a similar graph, but this is only Scottsdale. You can see how Scottsdale is lagging the rest of the market in the recovery. This we see in the market place as Surprise has bottomed and Scottsdale is still weak. But look, we entered the year at $187.62 ppsf. We seem to have bottomed in August at $167.65 and moved up in October to $174.09.

Right now things are looking good for Scottsdale, but again we must ask is this the bottom? Is there further weakness? My answer to that is I believe there will be further weakness. But, I also believe many of the homes that sell at lower prices will not be the nicer homes. The homes with views. The homes with nice upgrades. The homes with great lot locations. I believe many of the homes coming on the market that will sell at lower prices will be REO/Bank Owned homes. I believe this is a great time to buy in Scottsdale and valley wide. But one must do their homework and buy smart.

Oct Scots ppsf

If you or anyone you know wants to get advanced notice of REO/Bank Owned homes and join our Elite Buyer Group, have them email us at jeff@thecameronteam.com and we will give them the Unfair Advantage.

Just my opinion…Jeff Cameron

Filed Under: Latest News Tagged With: Elite Buyer Group, jeff cameron, JeffRCameron, Phoenix home values, real estate in Scottsdale, Scottsdale home values, the cameron team, Unfair Advantage, what is happening to my home value in Scottsdale

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