Scottsdale, Arizona is a vibrant city with a thriving real estate market. Whether you're looking for a luxurious estate or a cozy starter home, Scottsdale offers a range of options. In this article, we'll explore the current state of the Scottsdale housing market, including trends and forecasts for 2023. Scottsdale is a suburb of Phoenix, sitting on the eastern side of Maricopa County.
It is overshadowed by Phoenix unless you’re a golf aficionado or watch baseball. Scottsdale is home to around a quarter-million people, making it one of the largest suburbs in the Phoenix metro area. The city is roughly a twenty-minute drive to the famous Phoenix Sky Harbor International Airport. It retains its suburban feel despite heavy development and tourist attractions.
The area contains a mix of families, young professionals, and retirees. There are several reasons to consider investing in Scottsdale real estate. Over the last five years, data shows a stable Scottsdale housing market with average sale point and price per square foot seeing a steady increase. If you are an investor, Scottsdale has a track record of being one of the best long-term real estate investments in the nation.
Scottsdale Housing Market Update
If you're considering buying or renting a home in Scottsdale, AZ, it's important to have an idea of the current housing market. Here is an overview of the housing market in Scottsdale, AZ in April 2023, based on data from Realtor.com®.
Median Listing Home Price vs. Median Home Sold Price
The median listing home price in Scottsdale, AZ in April 2023 was $925K, which represents a 2.8% increase compared to the previous year. On the other hand, the median home sold price was $796K. The sale-to-list price ratio was 98.18%, which means that homes in Scottsdale, AZ were sold on average 1.82% below their asking price in April 2023.
Sale-to-list price ratio is an important metric in real estate that shows the percentage of the listing price that a home sold for. A higher sale-to-list price ratio indicates a stronger seller's market, while a lower ratio suggests a buyer's market.
Median Days on Market
On average, homes in Scottsdale, AZ sold after 68 days on the market in April 2023. This is a slight increase compared to last year. The median days on market can provide valuable information for buyers and sellers. For buyers, a longer median days on market can suggest that there's less competition, while for sellers, it can indicate a need to adjust the asking price or marketing strategy.
Overall, the housing market in Scottsdale, AZ in April 2023 is a seller's market, with homes selling for slightly below their asking price and a low inventory of homes available for sale. However, with a range of options available, buyers and renters can still find a home that fits their needs and budget.
Scottsdale Real Estate Market Forecast 2023-2024
Scottsdale, AZ, has been a popular real estate market for years, and its popularity only seems to be increasing. With its sunny weather, vibrant culture, and luxurious amenities, Scottsdale has become a favorite for those seeking a high-quality lifestyle. With the growing interest in the region, it is essential to understand the Scottsdale real estate market forecast for 2023-2024.
As of March 31, 2023, the average home value in Scottsdale, AZ, is $753,075, up 0.6% over the past year. The median time for a home to go to pending in the Scottsdale area is 45 days. The median sale-to-list ratio is 0.968, which indicates that homes are selling slightly below their list price. In February 2023, 9.1% of homes sold above their asking price, and 78.8% sold under the asking price.
The Scottsdale real estate market forecast for 2023-2024 is optimistic, with the market expected to remain strong and stable. The real estate market forecast for Scottsdale is partly dependent on the forecast for the metropolitan statistical area (MSA) it belongs to, which is Phoenix, AZ.
According to Zillow, the Phoenix, AZ MSA is expected to have a -0.3% decline in home values by April 30, 2023, followed by a -0.8% decline by June 30, 2023. However, the MSA is forecasted to have a 1.5% increase in home values by March 31, 2024.
While the Phoenix MSA's real estate market forecast may seem disheartening, it is important to note that Scottsdale's real estate market does not always follow the same trend. Scottsdale's real estate market forecast may differ slightly from the forecast for the Phoenix MSA.
Reasons for Scottsdale's Stable Real Estate Market
One of the primary reasons for Scottsdale's stable real estate market is the limited availability of land for new construction. Scottsdale is surrounded by mountains and preserves, making it difficult to build new housing developments. This limited supply of housing has helped keep home values and demand high.
Additionally, Scottsdale is a popular destination for retirees, second-home buyers, and young professionals, which increases the demand for housing. The area also has a thriving job market, with a focus on healthcare, technology, and tourism, which draws in new residents.
In conclusion, the Scottsdale real estate market forecast for 2023-2024 is optimistic, with the market expected to remain strong and stable. Although the Phoenix, AZ MSA's real estate market forecast shows a decline in home values, the limited availability of land in Scottsdale and the demand for housing from various demographics help keep the area's real estate market stable. With the growing interest in Scottsdale's luxurious lifestyle and amenities, it is not surprising that the area continues to be a sought-after destination for homebuyers.
Scottsdale Real Estate Investment Overview
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 $753,075, up 0.6% over the past year, indicating that the market is relatively stable. The median days to pending is around 45 days, indicating that the market is quite competitive, with homes selling quickly.
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, with a median rent of $2,750 per month. 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 in 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 2023, the average rent for a 1-bedroom apartment in Scottsdale, AZ is currently $1,854. This is a 3% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Scottsdale increased by 1% to $1,670. The average rent for a 1-bedroom apartment increased by 1% to $1,854, and the average rent for a 2-bedroom apartment remained flat.
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.
Summary
Buying an investment property is different from buying an owner-occupied home. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor in Scottsdale, AZ is your ability to find great real estate investments in that area. Buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market.
We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The other best place to invest in real estate is Bakersfield, CA. Bakersfield is developing and diversifying, maturing beyond the farming hinterland that led it to be written off as a California backwater. Its stabilized real estate market won’t offer skyrocketing property valuations or equally shocking rental rates, but that makes it a good choice for investors seeking solid, steady returns.
Whether seasonal workers who will never settle down or locals whose seasonal employment precludes homeownership, this has created a strong rental market. Median rents hover around 1500 dollars a month for single-family homes in the Bakersfield real estate market. When you take apartments into account, the median monthly rent is a little under a thousand dollars a month.
Another sizzling market to invest in real estate in 2019 is Honolulu, HI. The Honolulu real estate market is dense, profitable, and unable to grow except at the margins. This will result in high returns for almost any Honolulu real estate investment property. The possibility of staying for free in a Hawaii condo or bungalow you own is just a bonus.
There is a rising demand for rental units year-over-year. The issue however is that rent prices are too high to be affordable for many renters. Housing in Honolulu is expensive, and the relatively large number of people working in low-pay retail and tourism jobs results in many who will never be able to afford to own a home or condo. Roughly sixty percent of Hawaii residents are cost-burdened renters, people who spend more than a third of their income on rent. Compounding the matter is that they’re competing with several large pools of renters who are almost immune to local economics, driving up rental rates.
Let us know which real estate markets you consider best for real estate investing! If you need expert investment advice, you may fill-up the form given here. One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References
Housing Market Data, Trends & Statistics
https://scottsdalerealtors.org/
https://scottsdalerealtors.org/benefits/market-data/
https://www.zillow.com/scottsdale-az/home-values
https://www.redfin.com/city/16660/AZ/Scottsdale/housing-market
https://www.neighborhoodscout.com/az/scottsdale/real-estate
https://www.realtor.com/realestateandhomes-search/Scottsdale_AZ/overview
https://www.zillow.com/phoenix-mesa-scottsdale-metro-az_r394976/home-values
Landlord friendliness
https://www.avail.co/education/laws/arizona-landlord- space here tenant-laws
https://www.mashvisor.com/blog/ more spaces here 5-most-landlord-friendly-states
https://www.american-apartment-owners-association.org/property-management/latest-news/another-state-goes-landlord-friendly
Short term rentals
https://www.scottsdaleaz.gov/codes/vacation-short-term-rentals
Quality of life
https://www.niche.com/places-to-live/scottsdale-maricopa-az
Job market
https://www.areavibes.com/scottsdale-az/employment
Snowbirds
https://www.tripsavvy.com/what-is-a-snowbird-2683049
Geographic constraints
https://en.wikipedia.org/wiki/Fort_McDowell,_Arizona
Tourist
https://imaginesports.com/news/2018-cactus-league
https://livability.com/az/scottsdale/things-to-do/8-reasons-to-move-to-scottsdale-az
Taxes
https://www.tripsavvy.com/arizona-property-tax-2682000
https://smartasset.com/taxes/arizona-property-tax-calculator
