By Mike Bodeen · 6 September 2016
Much of our market reporting this past year had to do with how the West Valley in particular was “crushing it” in numbers of sales and appreciation rates. Avondale, Surprise, Glendale, Goodyear are all examples of west side cities with very healthy real estate activity that have experienced dynamic growth over the last year, and will no doubt continue to. Affordable pricing will always do well!
On the flip side, the higher priced Northeast Valley, including Paradise Valley, Scottsdale, Fountain Hills, and Cave Creek, have seen sluggish growth due mostly to it being made up of the higher priced cities.
The most accurate gauge of housing activity in the Valley, the Cromford Market Index Report, is beginning to show a possible turnaround trend for these higher priced cities. Paradise Valley, which is the highest priced city in the Valley, last month had an index reading of 85.8, which was the lowest in the valley. (100 is a balanced market between a buyer’s market and a seller’s market). This month Paradise Valley rocketed to a 122.4 index, a 43% gain in one month!
Scottsdale and Cave Creek, currently reading 132 and 104 respectively, both rose 14% from last month. Fountain Hills, which languished most of last year under 100 has showed a steady index increase since the end of last year and now sits at an index of 168, which is an amazing recovery and is the 2nd highest rated index of all 17 large valley cities.
When economic confidence runs high, consumers buy. Fear and uncertainty on the other hand, are a cause to pause. In this election year, the stock market is streaking and gas prices, mortgage rates and unemployment remain insanely low. Are higher end home buyers feeling enough economic confidence so they’re jumping back into the game? I’m slightly doubtful that this election year politics are playing much of a role, given the choices we’re faced with.
Experience tells me that when prices dip low enough, at that point, wise buyers jump in. With these popular communities having had a significant run at mediocrity this past year and prices held down, now they may believe is the time to act.
Market data referenced in this article comes from The Cromford Report.