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Scottsdale Real Estate Market

Scottsdale AZ Luxury Home Market – September 2023

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– Scottsdale Luxury Home Market Performance for September 2023 –

September was another quieter month, as we had expected. For the most part, listings were up and sales were down. However, a few segments saw an uptick in pending inventory.

Each month, we examine the luxury home market in Scottsdale. We look at the number of homes for sale, new contract activity as well as home sales. To show more detail, we have split this information into four price ranges.

– SEPTEMBER 2023 –

Scottsdale Homes Priced Between $1,000,000 – $1,499,999

Scottsdale Homes for Sale between $1 and $1.5 million September 2023

– Active Scottsdale Homes on the Market: Inventory has continued to climb for the second straight month and was up 12.2% over the end of August.
– UCB Scottsdale Home Sales: UCB contracts were down by one and closed out the month at 31.
– Pending Scottsdale Home Sales: The number of pending contracts had a nice rebound and were up 23.1% over the end of September.
– Scottsdale Homes Sold: Home sales dropped significantly in September due to fewer homes being in the pipeline in August.
– Sales Price to Listed Price: 97.2%- On average, buyers saw a discount of 2.8% off of list price.

Scottsdale Homes Priced Between $1,500,000 – $1,999,999

Scottsdale Homes for Sale between $1.5 and $2 million September 2023

– Active Scottsdale Homes on the Market: The number of homes for sale increased 17.3% between the end of August and the end of September. This is above the 12 month average of 121.
– UCB Scottsdale Home Sales: UCB contracts posted the worst performance we have seen in the last year. The month closed out with 9 UCBs.
– Pending Scottsdale Home Sales: The number of pending contracts was also down for the second month in a row.
– Scottsdale Homes Sold: After a very strong August, home sales were down again in September.
– Sales Price to Listed Price: 97.0% – On average, buyers saw a discount of 3% off of list price.

Scottsdale Homes Priced Between $2,000,000 – $2,999,999

Scottsdale Homes for Sale between $2 and $3 million September 2023

– Active Scottsdale Homes on the Market: Active inventory was up over August, but is still coming in just shy of the 12 month average.
– UCB Scottsdale Home Sales: The number of UCBs remained level with August.
– Pending Scottsdale Home Sales: Like we have seen in other price points, pending sales rebounded in September. They were up 24.2% over the previous month.
– Scottsdale Homes Sold: The number of homes sold fell 50% from the previous month. Since we have a little more activity in the pipeline, this should go back up in October.
– Sales Price to Listed Price: 97.7% – On average, buyers saw a discount of 2.3% off of list price.

Scottsdale Homes Priced $3,000,000+

Scottsdale Homes for Sale over $3 million September 2023.

– Active Scottsdale Homes on the Market: Inventory was back up to levels we saw earlier in the year.
– UCB Scottsdale Home Sales: After a very low-performing August, UCB contracts almost doubled in September.
– Pending Scottsdale Home Sales: Pending sales were up for the second month in a row. There were 33 at the end of September, ahead of the 12 month average of 29.
– Scottsdale Homes Sold: Sales were level with August, with 19 homes that closed.
– Sales Price to Listed Price: 94.8% – On average, buyers saw a discount of 5.2% off of list price.

If you would like additional details on home sales activity, please visit our Scottsdale Luxury Home Market Reports page and click on the downloadable “Scottsdale Market Trends” report.

Search Scottsdale Luxury Homes for Sale

Disclaimer: Information deemed reliable but not guaranteed. Data and information were pulled from the Arizona Regional MLS (ARMLS) as of 10/1/2023 and can change at any time. The analysis looks at single-family luxury resale homes in Scottsdale AZ over the last 12 months. There may be new home inventory in these figures if the developer is using the MLS to market its homes. This blog represents the opinion of the author. No warranties expressed or implied.
Copyright ©2023 Heather Tawes Nelson | Joyce Tawes

Quick Video Update of the Scottsdale Real Estate Market – September 2023

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– September 2023 Scottsdale Housing Market Video –

Here is a one-minute video overview of the Scottsdale, Arizona real estate market that covers the month of September.

September 2023 – Video

Scottsdale Active Listings

Scottsdale homes for sale September 2023

The number of single-family homes for sale in Scottsdale was up by 9.7% at the end of September when compared to August. Inventory has been increasing slowly each month after hitting a low in June.

When you compare September 2023 to where we were at the same time last year, inventory was down 22.5%.

Average List Price for Scottsdale Homes

Scottsdale homes average list price September 2023

I no longer have access to the median list price data I used in previous reports, so I am switching over to average list price. Technically, the median price is a better indicator since the average price can skew one way or the other due to extremely cheap or extremely high list prices, but this will still give you a decent idea of the prices of homes in Scottsdale.

The average list price of homes in Scottsdale in September was over $2.15 million. This is down slightly over August’s $2.18 million, but up over September 2022’s $1.98 million.  

Days on Market

Scottsdale homes days on market September 2023

The Days on Market gives you an idea of how quickly (or not) homes are selling. Many people simply refer to it as DOM. The higher the number, the longer it takes homes to sell. And the lower the number, home sales are taking place at a faster pace.

In September, Scottsdale’s DOM was 61 days. This is up 16.4% compared to September 2022, but was down 21.3% when compared to August’s 74 days.

Average Sales Price for Scottsdale Homes

Scottsdale homes average sales price September 2023

As I explained in the average list price section, we have moved from median sale price to average sale price.

September’s average sales price was $1.34 million. This is down 1.5% compared to August’s $1.39 million. However, it was up 9.8% compared to the same month last year.

Number of Homes Sold

Scottsdale home sales September 2023

In this final section, we will cover home sales.

September sales were down 22.3% compared to August. They were also down year-over-year by 5.5%.

We hope that you found this video and commentary helpful as you gather more information to make smart informed real estate decisions.

For more Scottsdale real estate information or if you have any questions about the local area, feel free to contact Joyce at (480) 209-7843 or Joyce@LiveBetterinScottsdale.com.

Click to watch other videos on our Live Better in Scottsdale YouTube Channel.

Interested in other stats for our market? Visit our Real Estate Market Update page.

Disclaimer: Data deemed to be accurate, but is not guaranteed.

Are Higher Mortgage Rates Here To Stay?

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Mortgage rates have been back on the rise recently and that’s getting a lot of attention from the press. If you’ve been following the headlines, you may have even seen rates recently reached their highest level in over two decades (see graph below):  

That can feel like a little bit of a gut punch if you’re thinking about making a move. If you’re wondering whether or not you should delay your plans, here’s what you really need to know.   

How Higher Mortgage Rates Impact You  

There’s no denying mortgage rates are higher right now than they were in recent years. And, when rates are up, that affects overall home affordability. It works like this. The higher the rate, the more expensive it is to borrow money when you buy a home. That’s because, as rates trend up, your monthly mortgage payment for your future home loan also increases.  

Urban Institute explains how this is impacting buyers and sellers right now: 

“When mortgage rates go up, monthly housing payments on new purchases also increase. For potential buyers, increased monthly payments can reduce the share of available affordable homes . . . Additionally, higher interest rates mean fewer homes on the market, as existing homeowners have an incentive to hold on to their home to keep their low interest rate.”

Basically, some people are deciding to put their plans on hold because of where mortgage rates are right now. But what you want to know is: is that a good strategy? 

Where Will Mortgage Rates Go from Here? 

 If you’re eager for mortgage rates to drop, you’re not alone. A lot of people are waiting for that to happen. But here’s the thing. No one knows when it will. Even the experts can’t say with certainty what’s going to happen next.  

Forecasts project rates will fall in the months ahead, but what the latest data says is that rates have been climbing lately. This disconnect shows just how tricky mortgage rates are to project.  

The best advice for your move is this: don’t try to control what you can’t control. This includes trying to time the market or guess what the future holds for mortgage rates. As CBS News states: 

“If you’re in the market for a new home, experts typically recommend focusing your search on the right home purchase — not the interest rate environment.”

Instead, work on building a team of skilled professionals, including a trusted lender and real estate agent, who can explain what’s happening in the market and what it means for you. If you need to move because you’re changing jobs, want to be closer to family, or are in the middle of another big life change, the right team can help you achieve your goal, even now. 

Bottom Line

The best advice for your move is: don’t try to control what you can’t control – especially mortgage rates. Even the experts can’t say for certain where they’ll go from here. Instead, focus on building a team of trusted professionals who can keep you informed. When you’re ready to get the process started, let’s connect.

Phoenix and Scottsdale AZ Luxury Condo Sales – September 2023

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Luxury Condo Sales in Scottsdale and Phoenix – September 2023

The luxury condo market in Scottsdale and Phoenix keeps plugging along. Although there were not as many sales in September when compared to August, there was some good activity in the UCB and pending arenas. 

All of the condos in this analysis had list prices of at least $1 million. 

ACTIVE LISTINGS AT THE END OF SEPTEMBER

Inventory was up slightly at the end of the month. September ended with 43 active listings and 38 of them were located in Scottsdale. 

The highest and lowest priced condos for sale remain the same and have held these spots for several months now. The most expensive condo for sale was located in ICON at Silverleaf. Offered at $5,400,000, this spacious condo comes with 5,534 square feet, five bedrooms and five and one-half bathrooms.

The lowest-priced condo for sale was located in Scottsdale’s The Reserve community. On the market for $1,075,000, it has two bedrooms, two and one-half bathrooms and 2,179 square feet. 

UCB* LUXURY CONDO SALES IN SCOTTSDALE AND PHOENIX

September concluded with eight homes in UCB status. They were equally divided between Scottsdale and Phoenix.

UCB Condos in Scottsdale

  • Optima Kierland
    • Two bedrooms and bathrooms, 1,326 square feet. Asking price was $1,230,000.
    • Three bedrooms and bathrooms, 2,018 square feet. Asking price was $2,350,000.
    • Three bedrooms, three and one-half bathrooms, 2,837 square feet. Asking price was $3,850,000.
  •  Plaza Lofts at Kierland – Three bedrooms, three and one-half bathrooms, 4,059 square feet. Asking price was $5,200,000.

UCB Condos in Phoenix

  • Crystal Point – Two bedrooms, two and one-half bathrooms, 2,718 square feet. Asking price was $1,1,00,000.
  • Optima Biltmore – Two bedrooms, two and one-half bathrooms, 2,456 square feet. Asking price was $1,250,000.
  • One Lexington – Two bedrooms, two and one-half bathrooms, 2,288 square feet. Asking price was $1,295,000.
  • Esplanade Place – Three bedrooms. three and one-half bathrooms, 4,266 square feet. Asking price was $4,500,000.

PENDING LUXURY CONDO SALES IN SCOTTSDALE AND PHOENIX

Pending sales were up by one and closed out the month at 85. Eighty-three of these were located in Scottsdale. 

The pending figure continues to grow due to the fact that most of these homes are located in communities currently being built out.  

Scottsdale Pending Luxury Condos

  • Scottsdale Waterfront Residences – Three bedrooms, three and one-half bathrooms, 3,139 square feet. Asking price was $3,299,000.
  • Portico Scottsdale Condominiums – This is a new development in North Scottsdale.
    • Two bedrooms, two and one-half bathrooms, 1,939 square feet. Asking price was $1,025,000.
    • Two bedrooms, two and one-half bathrooms, 1,939 square feet. Asking price was $1,060,000.
    • Two bedrooms, two and one-half bathrooms, 1,939 square feet. Asking price was $1,064,650.
    • Three bedrooms and bathrooms, 2,396 square feet. Asking price was $1,444,500.
    • Three bedrooms and bathrooms, 2,396 square feet. Asking price was $1,475,000.
    • Three bedrooms and bathrooms, 2,396 square feet. Asking price was $1,587,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,658,500.
    • Three bedrooms and bathrooms, 2,396 square feet. Asking price was $1,660,000.
    • Three bedrooms and bathrooms, 2,396 square feet. Asking price was $1,730,000.
    • Three bedrooms and bathrooms, 2,396 square feet. Asking price was $1,733,400.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,743,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,769,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,814,400.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,845,750.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,899,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $1,935,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $2,007,000.
    • Four bedrooms, three and one-half bathrooms, 2,768 square feet. Asking price was $2,016,950.
  • Ascent at the Phoenician – This is another fantastic development underway.
    • One bedroom, one and one-half bathrooms, 1,698 square feet. Asking price was $1,475,000.
    • Two bedrooms, two and one-half bathrooms, 1,847 square feet. Asking price was $1,600,000.
    • One bedroom, two bathrooms, 1,519 square feet. Asking price was $1,725,000.
    • One bedroom, two bathrooms, 1,519 square feet. Asking price was $1,725,000.
    • One bedroom, two bathrooms, 1,896 square feet. Asking price was $1,975,000.
    • Two bedrooms, two and one-half bathrooms, 2,374 square feet. Asking price was $2,050,000.
    • Two bedrooms and bathrooms, 1,847 square feet. Asking price was $2,075,000.
    • One bedroom, two bathrooms, 1,678 square feet. Asking price was $2,175,000.
    • One bedroom, two bathrooms, 1,677 square feet. Asking price was $2,195,000.
    • Two bedrooms and bathrooms, 2,157 square feet. The asking price was $2,225,000.
    • Two bedrooms, two and one-half bathrooms, 2,679 square feet. Asking price was $2,285,000.
    • Two bedrooms, three bathrooms, 2,157 square feet. Asking price was $2,350,000.
    • Two bedrooms and bathrooms, 2,294 square feet. Asking price was $2,385,000.
    • Two bedrooms, two and one-half bathrooms, 2,679 square feet. Asking price was $2,395,000.
    • Two bedrooms, two and one-half bathrooms, 1,848 square feet. Asking price was $2,395,000.
    • Two bedrooms, three bathrooms, 2,294 square feet. Asking price was $2,395,000.
    • Two bedrooms, three bathrooms, 2,157 square feet. Asking price was $2,425,000.
    • Two bedrooms and bathrooms, 2,068 square feet. Asking price was $2,485,000.
    • Two bedrooms, two and one-half bathrooms, 2,160 square feet. Asking price was $2,485,000.
    • Two bedrooms, two and one-half bathrooms, 1,848 square feet. Asking price was $2,625,000.
    • Two bedrooms, three bathrooms, 2,593 square feet. Asking price was $2,695,000.
    • Two bedrooms and bathrooms, 2,157 square feet. Asking price was $2,750,000.
    • Two bedrooms, two and one-half bathrooms, 2,160 square feet. Asking price was $2,795,000.
    • Two bedrooms and bathrooms, 2,579 square feet. Asking price was $2,850,000.
    • Two bedrooms and bathrooms, 2,318 square feet. Asking price was $2,950,000.
    • Two bedrooms and bathrooms, 2,683 square feet. Asking price was $2,985,000.
    • Two bedrooms, three bathrooms, 2,497 square feet. Asking price was $3,050,000.
    • Two bedrooms, three bathrooms, 2,579 square feet. Asking price was $3,100,000.
    • Two bedrooms and bathrooms, 2,318 square feet. Asking price was $3,385,000.
    • Two bedrooms and bathrooms, 2,592 square feet. Asking price was $3,525,000.
    • Two bedrooms and bathrooms, 2,526 square feet. Asking price was $3,695,000.
    • Three bedrooms, three and one-half bathrooms, 3,867 square feet. Asking price was $3,975,000.
    • Three bedrooms, three and one-half bathrooms, 3,996 square feet. Asking price was $4,100,000.
    • Three bedrooms, four bathrooms, 3,037 square feet. Asking price was $4,150,000.
    • Three bedrooms, three and one-half bathrooms, 3,996 square feet. Asking price was $4,450,000.
    • Three bedrooms, three and one-half bathrooms, 3,996 square feet. Asking price was $4,500,000.
    • Three bedrooms, three and one-half bathrooms, 3,996 square feet. Asking price was $4,750,000.
    • Three bedrooms, three bathrooms, 3,141 square feet. Asking price was $4,750,000.
    • Three bedrooms, three and one-half bathrooms, 3,996 square feet. Asking price was $4,895,000.
    • Three bedrooms, three and one-half bathrooms, 3,945 square feet. Asking price was $4,950,000.
  • ICON at Silverleaf – Currently under construction.
    • Two bedrooms, three bathrooms, 2,752 square feet. Asking price was $1,995,000.
    • Two bedrooms, three bathrooms, 2,752 square feet. Asking price was $2,150,000.
    • Two bedrooms, three bathrooms, 2,752 square feet. Asking price was $2,500,000.
    • Two bedrooms, three bathrooms, 2,752 square feet. Asking price was $2,625,000.
    • Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $2,700,000.
    • Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $2,750,000.
    • Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $2,800,000.
    • Two bedrooms, three bathrooms, 2,752 square feet. Asking price was $2,900,000.
    • Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $2,900,000.
    • Three bedrooms and bathrooms, 3,157 square feet. Asking price was $2,995,000.
    • Three bedrooms, three and one-half bathrooms, 3,170 square feet. Asking price was $2,995,000.
    • Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $3,175,000.
    • Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $3,195,000.
    • Three bedrooms, four bathrooms, 3,157 square feet. Asking price was $3,200,000.
    • Three bedrooms, four bathrooms 3,157 square feet. Asking price was $3,350,000.
    • Three bedrooms,  four bathrooms, 3,157 square feet. Asking price was $3,600,000.
    • Three bedrooms, four bathrooms, 3,867 square feet. Asking price was $3,600,000.
    • Five bedrooms, five and one-half bathrooms, 5,534 square feet. Asking price was $5,400,000.
    • Five bedrooms, five and one-half bathrooms, 5,534 square feet. Asking price was $5,985,000.
    • Four bedrooms, four and one-half bathrooms, 6,288 square feet. Asking price was $6,900,000.
    • Four bedrooms, four and one-half bathrooms, 6,288 square feet. Asking price was $7,700,000.
    • Four bedrooms, four and one-half bathrooms, 6,288 square feet. Asking price was $7,718,000.
    • Four bedrooms, four and one-half bathrooms, 5,534 square feet. Asking price was $8,000,000
    • Four bedrooms, four and one-half bathrooms, 6,288 square feet. Asking price was $8,350,000. 

Phoenix Pending Luxury Condos

  • Artisan Lofts on Central – Three bedrooms, two and one-half bathrooms, 3,089 square feet. Asking price was $1,100,000.
  • Toscana at Desert Ridge – Two bedrooms, two and one-half bathrooms, 1,780 square feet. Asking price was $1,170,977.

LUXURY CONDO SALES IN SCOTTSDALE AND PHOENIX

Four condos sold during September and all of them were located in Scottsdale.

Scottsdale Luxury Condo Sales

  • Optima Camelview
    • Two bedrooms and two and one-half bathrooms, 1,911 square feet. Asking price was $1,345,000 and it closed for $1,300,000.
    • Two bedrooms and bathrooms, 2,074 square feet. Asking price was $1,850,000 and it closed for $1,725,000.
  • Envy – Two bedrooms, two and one-half bathrooms, 1,991 square feet. Penthouse unit. Asking price was $2,150,000 and it sold for list price. 
  • Optima Kierland – Two bedrooms and bathrooms, 1,290 square feet. Asking price was $1,225,000 and it closed for $1,125,000.

Phoenix Luxury Condo Sales

Search Phoenix and Scottsdale Luxury Condos for Sale 

Disclaimer: Days on market figures are cumulative days on market. Information herein deemed reliable but not guaranteed. Data and information were pulled from the Arizona Regional MLS (ARMLS) as of 10/1/2023 and can change at any time. The analysis looks at resale luxury condos in Scottsdale and Phoenix over the past 12 months. Information deemed reliable, but not guaranteed.  There may be new condo inventory in these figures if the developer is using the MLS to market its homes. This post represents the opinion of the author. No warranties express or implied.
Copyright ©2023 Heather Tawes Nelson | Joyce Tawes

Income Properties Are Trending, But Is Landlord Life for You?

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If the thought of investing your money into brick and mortar—or perhaps some stylishly-painted siding—excites you, join the club.

Investing in real estate has long been one of Americans’ favorite ways to grow their wealth. In fact, over 70% of single-family rental properties are currently owned by individual investors rather than corporations, according to Census data.1

Moreover, a decade’s worth of Bankrate surveys has found that Americans often prefer real estate for long-term wealth building over other investments. According to Bankrate’s latest survey, for example, Americans have historically embraced real estate, in part, because of the strong return on investment it can offer—especially to investors willing to stick with a property over time.2 It’s also a popular way to hedge against inflation since both rental income and property values tend to rise in tandem with overall prices.3

Now, as higher interest rates continue to push priced-out homebuyers to the sidelines, a new crop of “mom and pop” investors are eyeing the mushrooming rental market as a potential goldmine.4 Interest in buying a home to both live in and rent is also on the rise, especially amongst cash-strapped buyers looking to supplement their mortgage payments.5

But how do you know if you’re well-suited to take advantage of these real estate investment opportunities? Here are three signs that owning a rental property could be right for you.

  1. YOU’RE A HOMEBUYER WHO WANTS HELP COVERING THE MORTGAGE

If you’re looking for a creative way to buy a home without overspending, “house hacking” could be the answer. Increasingly popular with first-time homebuyers and budget-conscious investors, house hacking simply means buying a home that you intend to live in while renting out a portion of it to one or more tenants.5

House hacking also tends to be easier to break into than traditional real estate investing since you don’t need as high a credit score or as large a down payment to qualify for a mortgage. In fact, some government-backed mortgage programs will let you buy a primary residence with little to no money down.6 Buying a home you don’t plan to live in, by contrast, may require you to put down as much as 15% to 25% to qualify for a loan.7 

If you house hack, the money you collect for rent each month can help cover your mortgage and other homeownership expenses. Depending on your setup, you may also be able to save on utility bills by splitting them with your tenant or tacking a portion onto their monthly rent. Another major advantage of house hacking is that it entitles you to certain tax benefits and deductions available only to landlords.8

When it’s time to start your search, we can help you find a property that’s ideal for house hacking, such as a house with a walkout basement, a multifamily unit, or a home with enough outdoor space to build an accessory dwelling unit or garage apartment.

  1. YOU’RE AN INVESTOR LOOKING FOR STEADY AND RELIABLE INCOME

If you’re not crazy about the idea of a live-in tenant but still desire an additional stream of income, a dedicated long-term rental property could be a better option for you. Besides the monthly proceeds, purchasing a rental home can also add diversity and long-term stability to your investment portfolio and help you build wealth over time.9

According to data from the Federal Reserve, real estate owners have historically prospered. In early 2020, for example, the median home was worth almost triple what it was 30 years prior. Then, during the pandemic-era real estate boom, average home prices grew at an especially frenzied clip, climbing by nearly 50%, on average, in just two and a half years.10

However, the rate of appreciation can be hard to predict, so it’s prudent to invest in a property that also offers positive cash flow, which means the rent you take in exceeds your expenses. This strategy helps to ensure that you’ll put money in your pocket each month, even if the property’s value takes time to grow.

While today’s higher mortgage rates can make it more challenging for landlords to turn a profit, investment opportunities aren’t reserved for cash buyers. In fact, currently, almost 60% of real estate investors take out a loan to finance their purchase, according to Thomas Malone, an economist at the real estate data firm CoreLogic.4  He also notes that more small investors are stepping in to meet demand for rental housing, which has grown since many would-be buyers remain priced out of the purchase market.4

If you want to explore opportunities for a residential rental property that’s good for your wallet and attractive to renters, we can help. Reach out with questions or to schedule a free consultation.

  1. YOU’RE AN EXPERIENCED INVESTOR LOOKING TO MAXIMIZE YOUR POTENTIAL RETURNS

Another increasingly popular way to draw income from an investment property is to convert it to a short-term vacation rental. But beware: This strategy can be riskier as some municipalities have tightened rental restrictions and others are suffering from market oversaturation.11,12

With that said, if you’re an experienced investor who can afford to take on some uncertainty, then investing in a short-term rental could make sense for you.

If you find the right property, for example, you could earn significantly more renting it short-term on a platform like Airbnb than if you rented the home to a long-term tenant.11

The key is to keep it occupied as much as possible at a premium nightly rate. To do that, you’ll need some marketing savvy, hospitality skills, and business acumen. Of course, you can always hire a professional property manager, but you’ll need to factor the cost into your budget.

The vacation rental market enjoyed a boom during the pandemic, and some inexperienced investors are finding they bit off more than they can chew. As a result, there’s an opportunity to snap up some of these properties, but you’ll need some cash on hand and a willingness to learn the business.12

We can help you scout opportunities in our local market or, if you’re interested in investing in another area, we can refer you to an agent there for assistance.

BOTTOM LINE

Investing in real estate can be a great way to build your wealth long-term and earn some extra income. But to make the most of your investment, it pays to be strategic.

Call us for a consultation so we can discuss your goals and budget. We’ll help you discover neighborhoods with the best income potential, point out the homes most suited to renting, and help you brainstorm the best investment strategy for you. 

Before you take the plunge, make sure you can answer “YES” to these three questions:    

Are you ready to be a landlord?
Owning a rental property can take a lot of time and energy. You’re not just buying passive income, you’re also building sweat equity since the time you spend maintaining, marketing, and managing your rental can add up quickly. So be prepared to do some soul-searching to ensure you’ll not only flourish as a landlord, but actually enjoy it.

If you want to invest in real estate but aren’t prepared to put in the day-to-day effort required, we can refer you to a property management service for help.  

Can you afford to invest in real estate?
The last thing you want is to get over-extended with your new real estate venture. Besides the cost of purchasing the property, you’ll need to consider additional expenses, like property taxes, insurance, administrative costs, and maintenance and repairs. You will also need a cash reserve for unexpected issues or potential vacancies.  

We can help you run the numbers to determine whether you can charge enough rent to offset your expenditures.  

Have you found the right income property?
Even if you’ve got your finances in order and are emotionally ready to invest, your success as a landlord will also depend on the property you buy. The criteria for a good rental home and a good family home are often different, so it’s important to lean on professionals for advice.  

We can help you find an ideal rental property, taking into account your budget, risk appetite, and investment goals. If you decide to invest in a different area, we’ll connect you with an agent who’s more plugged into that community. Reach out today to schedule a free consultation.  

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources:

  1. PR Newswire – https://www.prnewswire.com/news-releases/census-data-show-individuals-continue-to-own-largest-share-of-single-family-rental-homes-301725024.html
  2. Bankrate –
    https://www.bankrate.com/investing/survey-favorite-long-term-investment-2022/
  3. Forbes –
    https://www.forbes.com/sites/forbesbusinesscouncil/2022/04/14/why-income-generating-real-estate-is-the-best-hedge-against-inflation/?sh=1081ce921746
  4. MarketWatch –
    https://www.msn.com/en-us/money/realestate/another-challenge-for-homebuyers-more-investors-are-snapping-up-homes-and-40-of-them-are-using-cash/ar-AA1foWSB
  5. Realtor.com – https://www.realtor.com/advice/buy/on-the-house-house-hacking-your-way-into-your-first-home/
  6. NerdWallet –
    https://www.nerdwallet.com/article/mortgages/government-home-loans
  7. LendingTree –
    https://www.lendingtree.com/home/mortgage/down-payment-for-rental-property/
  8. Quicken Loans –
    https://www.quickenloans.com/learn/house-hacking
  9. Investors Business Daily – https://www.investors.com/etfs-and-funds/personal-finance/rental-properties-investing-experts/
  10. St. Louis Fed FRED Economic Data –
    https://fred.stlouisfed.org/series/MSPUS
  11. Story by J.P. Morgan – https://story.jpmorgan.com/real-estate-news/thinking-about-investing-in-short-term-rentals-heres-what-to-know
  12. Skift –
    https://skift.com/2023/07/21/short-term-rental-saturation-leads-to-a-correction-and-lots-of-home-sales/

Scottsdale AZ Single Family Home Sales – September 2023

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– September 2023 Scottsdale Homes for Sale and Home Sales –

September was the quietest month we have seen in a while in terms of home sales and sales activity. Again this is to be expected due to seasonality, but we are also feeling the impacts of lower inventory and interest rates.

SCOTTSDALE HOME SALES ACTIVITY – SEPTEMBER 2023

Every month, we look at these four items related to home sales:

– Single-family homes for sale – Orange Line – How many active listings there were at the end of the month.
– Under contract, but accepting backup offers (UCB) – Gray Line – The number of homes in UCB status at the end of the month.
– Pending home sales – Yellow Line – How many pending sales there were at the end of the month.*
– Home Sales – Blue Line – How many home sales took place.

SEPTEMBER 2023 RESULTS

Scottsdale home sales September 2023
  • Scottsdale Homes for Sale: The number of homes for sale was up 9.7% when compared to the end of August and we passed back over the 900 mark again.
  • UCB (Under contract, accepting backup offers): UCBs fell to a level we have not seen since the end of 2022. The month closed out with 117 UCBs.
  • Pending Homes Sales in Scottsdale: Pending sales are actually the only bright spot in this month’s review. Pending sales were up slightly over August and we closed out with 195 in the pipeline.
  • Scottsdale Home Sales: The number of home sales dropped quite a bit when compared to August’s performance. We have not seen sales in the 200’s since February.

The following section contains two more sales metrics we use to look for trends in the market:

Scottsdale real estate market September 2023

Percent Change Month Over Month – The first metric, Percent Change Month Over Month, allows us to see how each of the tracked items performed relative to the previous month. For instance, sales were down 22.3% between August and September.

Sales Price to List Price – The second metric looks at pricing. Here, list prices are compared to sale prices. If the percentage is low, homes are selling for a larger discount and, conversely, if the percentage is closer to 100%, discounts are harder to come by. In September, we came in at 97.1% which is an average discount of 2.9% off of asking price.

*Figures for active homes for sale, UCB sales and pending sales are based on the numbers at the end of the month.

Curious about your buying power? Click on the link to learn more.

Search Scottsdale AZ Homes for Sale

Disclaimer: Data and information were pulled from the Arizona Regional MLS (ARMLS) as of 10/1/2023. Information deemed reliable, but not guaranteed. There may be new home inventory in these figures if the developer is using the MLS to market its homes. This post represents the opinion of the author. No warranties express or implied.
Copyright © 2023 Heather Tawes Nelson | Joyce Tawes

The Return of Normal Seasonality for Home Price Appreciation

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If you’re thinking of making a move, one of the biggest questions you have right now is probably: what’s happening with home prices? Despite what you may be hearing in the news, nationally, home prices aren’t falling. It’s just that price growth is beginning to normalize. Here’s the context you need to really understand that trend.

In the housing market, there are predictable ebbs and flows that happen each year. It’s called seasonality. Arizona is interesting in that the high season takes place during the spring and more recently carries over into May and June. However, once the temperatures start to climb in the summer, home sales taper off, and many owners who do not have to sell take their homes off of the market. We typically see things start to pick up a little around November, but generally, January and February are when things really start to heat up.

Home prices follow along with seasonality because prices appreciate most when something is in high demand. That’s why there’s a reliable long-term home price trend. The graph below uses data from Case-Shiller to show typical monthly home price movement from 1973 through 2022 (not adjusted, so you can see the seasonality):

As this national data shows, at the beginning of the year, home prices grow, but not as much as they do in the spring and summer markets. That’s because the market is less active in January and February since fewer people move in the cooler months. (This is quite the opposite in Arizona as people from the colder climates want to escape to our nice weather!)

This national data shows how the market transitions into the peak homebuying season in the spring, activity ramps up, and home prices go up a lot more in response. Then, as fall and winter approach, activity eases again. (Again, in Arizona, this seasonality is timed differently, but the pricing correlation is the same with respect to high-season and low-season demand.) Price growth slows, but still typically appreciates.

After several unusual ‘unicorn’ years, today’s higher mortgage rates helped usher in the first signs of the return of seasonality. As Selma Hepp, Chief Economist at CoreLogic, explains:

“High mortgage rates have slowed additional price surges, with monthly increases returning to regular seasonal averages. In other words, home prices are still growing but are in line with historic seasonal expectations.”

Why This Is So Important to Understand

In the coming months, you’re going to see the media talk more about home prices. In their coverage, you’ll likely see industry terms like these:

  • Appreciation: when prices increase.
  • Deceleration of appreciation: when prices continue to appreciate, but at a slower or more moderate pace.
  • Depreciation: when prices decrease.

Don’t let the terminology confuse you or let any misleading headlines cause any unnecessary fear. The rapid pace of home price growth the market saw in recent years was unsustainable. It had to slow down at some point and that’s what we’re starting to see – deceleration of appreciation, not depreciation. 

Remember, it’s normal to see home price growth slow down as the year goes on. And that definitely doesn’t mean home prices are falling. They’re just rising at a more moderate pace.

Bottom Line

While the headlines are generating fear and confusion about what’s happening with home prices, the truth is simple. Home price appreciation is returning to normal seasonality. If you have questions about what’s happening with prices in our local area, let’s connect.

What Experts Project for Home Prices Over the Next 5 Years

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If you’re planning to buy a home, one thing to consider is what experts project home prices will do in the future and how that might affect your investment. While you may have seen negative news over the past year about home prices, they’re doing far better than expected and are rising across the country. And data shows, experts forecast home prices will keep appreciating.

Experts Project Ongoing Appreciation

Pulsenomics polled over 100 economists, investment strategists, and housing market analysts in the latest quarterly Home Price Expectation Survey (HPES). The results show what the panelists project will happen with home prices over the next five years. Here are those expert forecasts saying home prices will go up every year through 2027 (see graph below):

If you’re someone who was worried home prices would fall because of stories you’ve read online, here’s the big takeaway. Even though home prices vary by local market, experts project prices will continue to rise across the country for years to come. And these numbers indicate the return to more normal home price appreciation.

And while the projected increase in 2024 isn’t as large as 2023, it’s important to recognize home price appreciation is cumulative. In other words, if these experts are correct, after your home’s value rises by 3.32% this year, it’ll appreciate by another 2.17% next year. This is a good example of why owning a home is a choice that wins big over time.

What Does This Mean for You?

Once you buy a home, price appreciation raises your home’s value, and helps grow your household wealth. To see how a typical home’s value could change in the next few years using the expert projections from the HPES, check out the graph below:

In this example, let’s say you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.

So, if you’re thinking about whether buying a home is a good choice, remember how it can be a powerful way to grow your wealth in the long run. 

Bottom Line

According to the experts, home prices are expected to grow over the next five years at a more normal pace. If you’re ready to become a homeowner, know that buying today can set you up for long-term success as home values (and your own net worth) grow. Let’s connect to start the homebuying process today.

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