Mixed Signals

Depending on what publication you read or who you speak with you’ll hear the real estate market is strong. The truth be known, a significant change in market balance has occurred since early July with demand sharply lower overall. This has caused the supply of active listings to grow even though new listings have remained at a very subdued level. The number of pending listings has declined the most compared with last year. Scottsdale’s pendings have fallen by 11%, Chandler 13%, Fountain Hills 24%, but Paradise Valley is up 4% and Goodyear up 15%.

Mike Orr of the Cromford Report did a comparison of average price per square foot of new homes versus resales, here are some of the stats:

Chandler:

  • 30 new homes with an average $/SF of $156.16

  • 303 normal resales with an average $/SF of $132.80

Gilbert:

  • 149 new homes with an average $/SF of $129.12

  • 342 normal resales with an average $/SF of $122.81

Glendale:

  • 17 new homes with an average $/SF of $117.72

  • 293 normal resales with an average $/SF of $102.79

Phoenix:

  • 89 new homes with an average $/SF of $131.05

  • 1,216 normal resales with an average $/SF of $125.75

“For normal price ranges and equivalent areas, I would estimate the typical price premium for a new home to a similar non-distressed resale to be around 10%-12%. Comparing medians gets you 36% but this is completely misleading.”