The Scottsdale housing market has long been a dynamic one, and 2024 is no exception. While the red-hot seller's market of recent years has tempered somewhat, the question remains: is it still a good time to sell a house in Scottsdale? Let's delve into the key market indicators to understand where Scottsdale stands and what it means for sellers in 2024.
Signs of a Balanced Market in Scottsdale
- Inventory on the Rise: Data suggests an increase in active listings compared to last year. This indicates more options for buyers, which can nudge the market towards a more balanced playing field.
- Sale-to-List Price Ratio: Currently, homes in Scottsdale are selling close to their asking price, with a ratio hovering around 97-98%. This suggests that sellers are achieving fair value without bidding wars typically seen in a strong seller's market.
- Days on Market: The median days on market have decreased compared to previous years, indicating a brisk sales pace. However, they haven't dipped as dramatically as in a seller's market, suggesting a more balanced dynamic between buyers who can take their time and sellers who can expect interest without properties lingering.
Advantages for Sellers in 2024
- Appreciation on the Horizon: Market forecasts predict continued growth in home prices, albeit at a more moderate pace than recent years. This means sellers can still expect to fetch a good price for their property.
- Favorable Conditions in Specific Segments: The entry-level market (homes between $500,000 and $700,000) remains competitive, favoring sellers in this segment.
While the overall market presents a balanced picture, it's crucial to remember that the Scottsdale real estate landscape can vary by neighborhood and price range. While the breakneck seller's market pace has slowed, sellers can still capitalize on a market with rising home values and continued buyer interest. By strategically pricing their property, leveraging the expertise of a local realtor, and making their home shine, sellers can navigate this balanced market successfully.
Scottsdale Housing Market Forecast for 2024 & 2025
The average home value in Scottsdale stands at $823,008, marking a 5.7% increase over the past year. Homes typically go pending in approximately 29 days, indicating a brisk market activity (Zillow).
The real estate market in Scottsdale has seen significant fluctuations in prices over the past month, with both median sale and list prices experiencing noteworthy changes.
The median sale price as of February 29, 2024, stands at $770,833. This figure reflects the middle price point of homes sold in the market, indicating a snapshot of overall pricing trends.
On the other hand, the median list price, which represents the midpoint of all properties listed for sale, has risen to $998,666 as of March 31, 2024. This suggests a considerable increase in the asking prices for available properties.
The rise in median list price could indicate growing confidence among sellers, potentially driven by favorable market conditions, anticipation of future appreciation, or other external factors. However, it may also pose challenges for buyers, as higher listing prices could lead to increased competition and affordability concerns.
Meanwhile, the median sale price provides insight into actual transaction values, reflecting the prices at which properties are ultimately bought and sold. This metric is crucial for understanding the affordability and value proposition for buyers in the market.
Market Forecast:
The Scottsdale housing market forecast for 2024 and 2025 suggests a continuation of the current balanced trend, with moderate home price appreciation and a stable inventory level. Here's a breakdown of what this might entail:
Key Market Indicators:
- Inventory:
- Increasing active listings compared to 2023.
- Stable inventory levels, providing more options for buyers and preventing a seller's market.
- Sale-to-List Price Ratio:
- Currently close to 97-98%, indicating buyers are achieving fair value without bidding wars.
- Days on Market:
- Median days on market have decreased, indicating a brisk sales pace.
- Still lower than in a strong seller's market, indicating a more balanced dynamic.
Advantages for Sellers:
- Appreciation on the Horizon:
- Experts predict continued growth in home prices, though at a slower pace than recent years.
- Favorable Conditions in Specific Segments:
- Entry-level market (homes between $500,000 and $700,000) remains competitive, favoring sellers in this segment.
Considerations for Sellers:
- Price competitively: A fair and realistic asking price will attract buyers in a balanced market.
- Highlight your home's strengths: Emphasize unique features and any recent renovations that enhance the property's value.
- Stage for success: Invest in professional staging to create a visually appealing and inviting space for potential buyers.
Should You Invest in the Scottsdale Real Estate Market?
Scottsdale, Arizona is a highly desirable location for real estate investment. With its warm climate, stunning natural scenery, vibrant nightlife, and high-quality educational institutions, Scottsdale has something to offer for everyone. The city has been ranked as one of the best places to live in the United States, and it is not hard to see why.
The Scottsdale real estate market has been thriving in recent years. The average home value in Scottsdale is $807,104, up 4.8% over the past year. The median days to pending is around 35 days, indicating that homes are still selling quckly.
There are many investment opportunities in Scottsdale, ranging from single-family homes to multifamily properties. The city has a diverse range of properties available, from luxury homes to more affordable options. One of the most promising investment opportunities in Scottsdale is in rental properties. The rental market is strong. The city has a high demand for rental properties, making it a great location to invest in rental real estate.
Another promising area for real estate investment in Scottsdale is commercial real estate. The city has a thriving economy, with a range of businesses and industries that are in need of commercial space. With a growing population and a strong economy, the demand for commercial real estate is likely to continue to grow in the coming years.
The Excellent Quality of Life
A city in a large metropolitan area is competing with every other city for residents. If the city is poorly managed or simply deteriorates, it’ll lose residents who only have to move a few miles to get away from it. In this regard, Scottsdale real estate investment is a wise choice because the city stands out in terms of quality of life. We’ll ignore the golf courses and focus instead on A-rated public schools and family-friendly amenities. They could do a little better on crime, but there are areas in Phoenix real estate market that are far worse.
Scottsdale's Job Market
Scottsdale is also an emerging tech market, with companies GoDaddy, Yelp, Paypal, Indeed.com, and Paradigm Tech all opening offices downtown. This is a great town for businesses, including small businesses and entrepreneurs. The Scottsdale job market has consistently averaged an unemployment rate a full point lower than the state average and roughly half a point lower than the Phoenix metro area average.
That alone would bolster the Scottsdale housing market. However, the relatively high property values mean much work here but live in other cities. Yet it contributes to a higher-than-expected rental rate in the Scottsdale housing market. Ironically, the high per capita income of 54K per person, twice the state average, drives up rents and housing prices.
Scottsdale's Tourist Market
Scottsdale is famous among locals for its Fashion Square Mall. However, you see more people coming here on vacation to enjoy the 200 local golf courses, many of which are world-class.
Others come to see the Major League Baseball teams in spring training in Scottsdale. Others stay in Scottsdale while watching teams practice in nearby Mesa. All of this explains why the city has the fourth-largest number of AAA four-diamond hotels in the United States. The nature of the tourist market, though, gives you the ability to rent out properties both nightly and for weeks at a time.
The Diverse Scottsdale Rental Market
The Scottsdale housing market has a more diverse rental market than just catering to those who can’t afford to buy a single-family home. For example, the area is famous for its snowbirds, retirees who come for the winter before returning home. Some of them buy a one or two-bedroom home to live in for half the year.
Others rent such properties. While many live in Sun City and other age-restricted communities, others choose to rent elsewhere in the Scottsdale real estate market.
They’ll prioritize amenities, proximity to healthcare providers, and low maintenance over cost in many cases. This population also increases the demand for RV-friendly homes and trailer parks. That provides an unusual play for those who want to profit off affordable housing in the Scottsdale housing market but don’t want to deal with Section 8 rentals.
Latest Rental Trends
As of May 2024, the median rent for all bedroom counts and property types in Scottsdale, AZ is $3,100. This is +55% higher than the national average. Rent prices for all bedroom counts and property types in Scottsdale, AZ have increased by 29% in the last month and have remained the same in the last year.
The monthly rent for an apartment in Scottsdale, AZ is $3,082. A 1-bedroom apartment in Scottsdale, AZ costs about $2,036 on average, while a 2-bedroom apartment is $3,032. Houses for rent in Scottsdale, AZ are more expensive, with an average monthly cost of $3,495.
Arizona is landlord-friendly compared to neighboring states like Nevada and California. What makes it notable is that it is becoming more landlord-friendly. For example, the city is passing laws that make it easier for landlords to enter units to make repairs. The state is making it easier to discard abandoned personal property and limiting appeals by those going through eviction. And it was already relatively fast and easy to evict people in Arizona.
The Scottsdale real estate investment options include the short-term rental market. The city requires short-term and vacation rentals to be registered with the county. Landlords must pay the transaction privilege sales tax and transient tax. A sales tax license is required. However, that’s simply the city saying you can rent out these units if you pay the same taxes that hotels do. The rest of the city’s regulations make the Scottsdale real estate market-friendly for renting out via sites like Airbnb.
They don’t limit short-term rentals to a tourist district. You can rent out both the main house and accessory dwelling unit on the same property. And state law doesn’t give cities the ability to apply new regulations that essentially ban short-term rentals. However, homeowners associations can regulate these types of properties, so do your research before you buy a Scottsdale real estate investment property assuming you can generate short-term rental income.
The Geographic Constraints
The Scottsdale real estate market is certain to experience appreciation for the same reason the local quality of life is so good – it is nearly surrounded by parks. The northern end of the city touches Tonto National Forest. The western edge borders McDowell Mountain Regional Park.
Homes with views and access to the national parks command a premium. Fort McDowell is a Native American reservation likewise off-limits. Tempe, Phoenix, and Mesa are all heavily developed. The city simply doesn’t have much room to expand to meet demand. This means the newest development will require redevelopment, increasing the cost of such properties and the value of existing housing stock.
At first glance, Scottsdale seems like a home buyer’s dream. It is full of suburban neighborhoods. The median household income is more than 70,000 dollars a year, and that’s pulled down by a retiree population so large that the average age is 46. However, affordability in the Scottsdale real estate market is relative.
The median wage is 73,000 but the median home price is approaching 400,000 dollars a year. This means many cannot afford to own a home though they may want to. This drives demand for rentals in the Scottsdale housing market.
It is surprisingly only a third of the residents rent, though this is somewhat higher than the 20 percent average for the area. Conversely, the high-paying jobs in the area are one reason many people move here, generating demand for rental properties by new residents.
The Relatively Low Tax Burden
Arizona has a surprisingly low property tax rate. It averages 0.85 percent of the property’s assessed value, while the national average hovers around 1.1 percent. Another benefit of Arizona real estate law is that the state limits the increases in the assessed value of property to 5 percent (or less) per year. This means your property taxes probably won’t rise at the same rate as the property value. That’s good since the Scottsdale housing market saw an appreciation of roughly five percent last year and is predicted to see at least 2 percent growth in 2019. Income taxes are competitive with the rest of the country and a bargain compared to tax-and-spend states like California, too.
Few References:
- https://scottsdalerealtors.org/
- https://scottsdalerealtors.org/benefits/market-data/
- https://www.zillow.com/phoenix-mesa-scottsdale-metro-az_r394976/home-values
