When was the Last Time Home Values Were at Today's Value? Metro Phoenix, Scottsdale and McDowell Mountain Ranch Real Estate Report

 When was the Last Time Home Values Were at Today’s Value? Metro Phoenix, Scottsdale and McDowell Mountain Ranch Real Estate Report

Hi and welcome to my real estate market report for metro Phoenix and Scottsdale. My name is Jeff Cameron with MRW Homes coming to you from McDowell Mountain Ranch in north Scottsdale.

What is happening in the real estate market?
Let’s start off when the question:
 When was the Last Time Home Values Were at Today’s Value? Metro Phoenix, Scottsdale and McDowell Mountain Ranch Real Estate Report.

When looking at the average price per square foot of a home, here is what we see:

First, this data was compiled from ARMLS for May 2012.

Metro Phoenix average price per square foot in May was $94.68 which is +6.9% higher than last month and +22.8% increase year to date. The bottom of the Metro Phoenix real estate market was October 2011.

At that time the average price per square foot of a single family home in metro Phoenix was $72.37.
OK, so nice bounce, but when was the last time the average price per square foot equaled today’s value of $94.68?
Drum roll……October 2008!
Yes, we have made up 4 years of property value losses in a matter of 7 months when looking at average price per square foot.

What about Scottsdale?

When was the Last Time Scottsdale  Home Values Where Were the are Today?
First let’s look at Scottsdale numbers:
Scottsdale Average price per square foot is $174.10. This is +3.8% higher than last month and +12.6% higher year to date. Scottsdale bottomed at $149.10 per square foot for single family residences in October of 2011.
OK, so nice bounce, but when was the last time the average price per square foot in Scottsdale equaled today’s value of $174.10?
Drum roll……May 2009!
Scottsdale was the last to fall, thus the last to bottom. However, in 7 short months 3 years of losses have been made up when looking at the average price per square foot for a single family home in Scottsdale.

what’s next?
McDowell Mountain Ranch
So, for the month of May McDowell Mountain Ranch actually dropped -2.9%. Don’t fret, that was a statistical anomaly after last month’s jump.  McDowell Mountain Ranch is up 18.6% year to date. Beating Scottsdale.

For those of you living in or wanting to buy a home in McDowell Mountain Ranch, I am not crazy. Yes prices continue to rise, but April was a huge bounce and there was a bit of a pull back in May. That does not mean prices went down, just the average price per square foot. This happens due to the product mix. If you sell more homes with a higher price per square foot and less homes that sell at a smaller price pre square foot if can affect the average down while prices are really rising.

My extreme example would be say there was a loft at Kierland that sold last month for $1 million, and it was only 1,000 sf. Then it would be selling for $1,000 per square foot. Now the following month a buyer purchases a custom 5,000 sf home for $1 million. It would have a $200 price per square foot. See how that can change the average without prices being affected?

Back to McDowell Mountain Ranch. Values bottomed in August of 2011 at $165.11 per square foot for single family homes.

OK, again nice bounce, but when was the last time the average price per square foot in McDowell Mountain Ranch equaled today’s value of $195.62?
Drum roll……June 2009!

So what is really happening in the real estate market?

As many of you know, I work the whole valley. I though we specialize in McDowell Mountain Ranch and Scottsdale, we get referrals all over the valley. This helps me stay in tune to the market as a whole and helps me understand what is happening here in Scottsdale. It was amazing how Scottsdale realtors had no idea what was happening in 2007-08, while we were ahead of the curve since we work the whole valley.

This weekend I sold an investment home in Surprise and last weekend a family home in south Gilbert. Through these experiences I saw how the new home market is on fire. Last month, I reported Gilbert subdivisions were selling out. Well this month here is what I saw in Surprise.

Since the beginning of the new year, they have been on fire. Where we bought, they sold 8 homes last week and had a $4,000 price increase this week. Others have also been on fire. New homes have been priced back into the market.

Most of these subdivisions and ones where the builder that started went out of business and the new builder bought the lots at tremendous discounts.

Walk me through this. Builders today either wrote the cost of their infrastructure down close to $0 or they bought the lots below the cost to improve them. There are a many lots out there owned by investors that picked them up in foreclosure. As sales increase, builders need more lots. They either buy from the investors or develop land. Today’s values for a finished home cannot include the full cost to develop the land. So, builders will continue to buy from investors and raise prices until the cost can include the infrastructure cost for new land. This will drive prices higher.

We saw a huge spike in values. Last month I said it was 2005 all over again. Things have slowed a bit, values seemed to peak and plateau a bit. We shall see what the future brings.

Also, we continue to see buyers willing to pay for views, upgrades and superior condition. This is creating huge variances in comps, confusion and appraisal issues.

That’s it for today, the short and sweet! Please remember about our Give the School a computer program. For every sale in the McDowell Mountain Ranch area this were we are making a donation to the Desert Canyon Elementary Technology Fund. If you tell us you saw this add and to Give the School a Computer before hiring us, we increase that donation to cover the cost of a computer.

Not buying or selling, recommend us to a friend or family and Spread the Word! Our goal is 10 computers, but we need your help!

Thanks

Jeff Cameron

MRW Homes

The Cameron Team

480-502-7699

Jeff@TheCameronTeam.com