August Market Update

by Kevin Valle

It's no secret that the high-end market typically experiences a significant slowdown during the summer months, leading to noticeable fluctuations in market averages, particularly concerning pricing.

To better understand this trend, let's compare data from April and July, focusing on the Northeast Valley versus the rest of the Greater Phoenix area. The Northeast Valley, home to the majority of luxury properties, includes Carefree, Cave Creek, Fort McDowell, Fountain Hills, Paradise Valley, Rio Verde, and Scottsdale. We've also included Phoenix (85016 and 85018) and excluded Scottsdale 85257 for this analysis.

Northeast Valley:
- April Sales: 662 single-family homes
- July Sales: 440 single-family homes
- Decline in sales volume: 34%
- Average price per square foot: Decreased from $558.56 to $505.70, a 9.5% drop.
Rest of Greater Phoenix:
- April Sales: 4,631 single-family homes
- July Sales: 4,267 single-family homes
- Decline in sales volume: 8%
- Average price per square foot: Decreased from $262.36 to $254.26, a 3% drop.

When considering Greater Phoenix as a whole, the weakened performance of luxury home sales has significantly impacted the average price per square foot, reducing it from $313.17 in April to $289.28 in July, a 7.6% drop—over twice the decline seen outside the Northeast Valley.

However, as temperatures begin to cool, we anticipate a rebound in high-end sales, which should help stabilize average pricing.

The table is showing a slight improvement compared to the previous week. Now, 8 cities have seen an increase in their Cromford® Market Index over the past month, up from 7 last week. Meanwhile, 9 cities have experienced a decline.

The changes remain slow, making it a frustrating time for market watchers. The average CMI change over the past month is -0.1%, a significant improvement from last week’s -1.8%. This trend, which began four weeks ago, suggests the market is on the verge of becoming more favorable for sellers.

Cities such as Fountain Hills, Cave Creek, Buckeye, and Paradise Valley are seeing the largest percentage gains. Scottsdale, Maricopa, Goodyear, and Peoria have also seen modest increases. The largest declines continue to be concentrated in the Southeast Valley, particularly in Tempe, Chandler, and Mesa.

Out of the 17 cities, 9 remain in a seller's market (with a CMI over 110), 3 are balanced, and 5 are buyer's markets. Three cities have a CMI over 140, while three have dropped below 75.

While the market isn't worsening, we're still waiting for a significant change to ignite more activity.

August Market Update

by Kevin Valle

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