Season Fizzles, Summer Sizzles

Leave it to Scottsdale to always keep us guessing about our real estate future. Who would have thought that the 2014 “snowbird” season would be quiet? Nobody I know! After the barn burner we had in 2013, most Realtors were planning for another busy season. And so what did we get . . . a ho-hum real estate market. Not bad, just not what we expected. Maybe the best one-word description – disengaged! What did it take to get Buyers and Sellers to engage in a real estate contract? Apparently something other than what we had.

With the return of summer, and our triple digit temps, let’s take a moment to reflect on the last two “snowbird” seasons and compare the numbers. For the 2013 season (which I am going to define as January thru May), Gainey Ranch saw 45 closed real estate transactions by Memorial Day. This was busy! For the same period in 2014, we had only 19. That’s a 58% drop in activity! I don’t think anyone saw this coming, and we’re all trying to explain it. Was it the 10% drop in the Canadian dollar relative to the US dollar? Was it the 25% increase in average property values that Scottsdale saw from the middle of 2012 to the end of 2013? Was it the increase in available properties that occurred during 2013? Or was it all of the above? Whatever it was, it definitely had an effect.

Now it’s not all bad news. In the midst of this activity slow-down, we continued to see average selling prices going up! In Gainey Ranch, our average selling price for the 2013 “snowbird” season was $242 per square foot. In 2014, it rose to $299 per square foot. Not bad! A lot of this increase is probably market inertia. With a big slow down in transactions you’ve got to think that price increases will come to a temporary halt. Demand has got to catch up again.

So what can we expect for the rest of 2014? The mid-price market (which in Gainey is basically the condo market) will probably stay slow as Sellers adjust to the fact that they need to moderate their price expectations. And the high-end market (which is basically the single family home market) looks as though it will hold its own as there is not nearly the inventory available in this market range. Buyers can afford to be picky, and Sellers, if they want to engage a Buyer, will have to ignore what Zillow says and get to a price that brings an offer!