TRENDING REAL ESTATE NEWS_________________
Here are the 5 Highest Home Sales This Year in Paradise Valley
Leading the highest home sales in Paradise Valley in 2024 is the home at 7835 N Ironwood Drive. Featuring six bedrooms, eight bathrooms, and covering 10,676-square-feet, it recently sold for$14,000,000 with Russ Lyon Sotheby’s International Realty Agent Cheryl Anderson bringing and representing the buyer. An iconic Arizona estate reborn for the modern world, this timeless Spanish revival sits on just under 3.5 private acres in the heart of Paradise Valley. Every detail has been updated, including new Albertini steel windows and doors and Loewen vertical grain fir wood windows, an updated main kitchen with larger island, cabinets and updated Thermador appliances, a kitchen added to the interior with views of Mummy Mountain, and a new antique stone fireplace surrounding the living room, kitchen, and primary bath. It’s the epitome of modern amenities merged with a traditional style.
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Home Prices Just Hit a New Record High, and These Cities Are Leading the Pack
Home prices in the U.S. have hit a new all-time high, despite higher mortgage rates that have discouraged many buyers.
Nationally, home prices rose 6.5% on an annual basis in March, according to the S&P CoreLogic Case-Shiller Home Price Index released on Tuesday. On a monthly basis, the index rose 0.3% from February after seasonal adjustment.
“This month’s report boasts another all-time high,” Brian D. Luke, head of Commodities, Real & Digital Assets at S&P Dow Jones Indices, notes in his analysis. “We’ve witnessed records repeatedly break in both stock and housing markets over the past year.”
The Case-Schiller national index has reached new highs in six of the past 12 months, Luke notes. During that time, the S&P 500 benchmark stock index has hit fresh all-time highs in 35 trading sessions.
Gains for the two major asset classes have boosted household wealth, which hit a new record high on an aggregate basis in the first quarter of 2024. But higher home prices have also frustrated prospective homebuyers. As a result, many of them believe the dream of homeownership is slipping out of reach.
Of the 20 metro areas tracked by the index, San Diego once again posted the largest annual gain in home prices, which rose 11.1% there over the past year.
San Diego was closely followed by New York City (9.2%), Cleveland (8.8%), and Los Angeles (8.8%).
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MARKET UPDATE_______________________
Price Negotiations and Concessions are Hot and Heavy This June
Will Rates Decline This Summer
For Buyers:
It’s feeling a bit like the movie “Groundhog Day” in the Greater Phoenix housing market as we relive the same scenario over and over. The Federal Reserve met this month and once again opted not to reduce the Federal Funds Rate, keeping it steady now for 12 months in a row. On the same day, the Consumer Price Index was released showing the annual inflation rate declined to 3.3%. The combination resulted in conventional mortgage rates dropping from an average of 7.16% to 6.98% in one day. This was expected, however the Federal Reserve board announced they anticipate one rate cut this year, possibly in September. That could mean a mortgage rate drop in late summer, if we dare hope.
While the drop is positive for buyers, rates are still too high to expect a major boost in demand at this stage. Sluggish demand combined with supply that’s 54% higher than last year is creating an environment for buyers that hasn’t been this accommodating in 10 years. Price negotiations are ramping up, but they look different depending on the price range.
Seller Incentives
On paper, price negotiations in the mid-range between $300,000-$500,000 look similar to last year, landing around 98.7% of asking price, down from 99.0%. This equates to a closing price about $5,200 lower on a $400,000 home compared to $4,000 lower last year. What’s not reported in the media is the rising percentage and cost of seller incentives to the buyer. In this price point, the majority of buyers are sensitive to their monthly cash flow more than the final sales price. Therefore, 55% of sales are closing with seller incentives to supplement buyers’ payments temporarily, compared to 49% last June. The median incentive to the buyer is currently $9,400, up $1,200 from last year’s median of $8,200. Combined, buyers are receiving approximately $14,600 (an extra $2,400) in both price negotiations and closing cost assistance, putting the true ratio of sale price to list price at approximately 96.4% for our $400,000 sale.
Buyers over $1M are less influenced by mortgage rates and concessions and prefer to negotiate the price directly. Price negotiations so far this June are closing at 94.9% of list, down from 96.4% of list last year and 96.1% last month. On a $1M purchase, that equates to an average $51,000 negotiated price reduction, up from $36,000.
For Sellers:
While the industry hopes for lower mortgage rates in the latter half of 2024, active sellers can only address where the market stands presently, which is a challenge. Supply has been rising all year long, but has slowed its roll over the past 3 weeks. Seasonally, supply fluctuations level out in the summer before picking up again around late September and early October. The increase in competition for sellers has resulted in 12 Greater Phoenix cities in less populated outer cities sinking into a balanced or buyer’s market over the course of 2 months, while 13 out of 17 seller’s market cities in the densely populated interior weakened.
Not-so-perfect listings, those that appear to have delayed maintenance issues, need excessive repairs, or simply don’t show well, have the most trouble in these environments. With so many other homes to choose from, these homes may not even get a showing in many area cities regardless of their attractive list prices.
Even perfect listings may suffer from dashed expectations in this market. While these homes that smell like a Spring breeze, well maintained with updated finishes, will sell in any market, seller expectations for time on market and price may not be met. As the market shifts abruptly from Spring to Summer, the median marketing time prior to contract has grown from a historical standard of 3 weeks to 4 weeks and more than half of existing listings will experience at least one price reduction within that time frame. Sellers haven’t seen a supply/demand ratio like this since about 2014-2015, so managing expectations and patience will be key to navigating a successful sale.
Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2024 Cromford Associates LLC and Tamboer Consulting LLC
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FOR THE HOME_______________________
20 of the Best Summer Staycation Deals in Arizona
Resorts, hotels and spas are the lifeblood of Arizona’’s tourism sector, pumping billions of dollars into the state’s economy. In 2022, outside visitors spent $28.1 billion, according to the Arizona Office of Tourism. But, out-of-state visitors aren’t the only ones flocking to some of the Grand Canyon State’s most coveted accommodations. From West and East Valley Phoenix to Flagstaff, Tucson and Page, residents from all over add to Arizona’s flourishing tourism coffer every year. And in gratitude, these highly-rated, amenity-rich and stunning resorts and hotels extend some of their best summer staycation deals and steals.
Peruse our 2024 top staycation destinations, book your discounted trip package and pack your bags!
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LOCAL ADVENTURE_______________________
Ranking Arizona: Top 10 Indoor Entertainment Venues for 2024
Here are the Top 10 indoor entertainment venues in Arizona. The rankings are based on public voting for the 2024 edition of Ranking Arizona. This is the state’s biggest and most comprehensive business opinion poll. Ranking Arizona is based purely on opinion. It ranks companies based on how voters answer this simple question: with whom would you recommend doing business?
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Historic Walking Tour of Old Town Scottsdale
- Dates:
June 1 – June 30 - Location:
Throughout Old Town - Downloadable Map
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See something that interests you in the June 2024 Newsletter? Contact me and we can check it out together!
Feel free to call me directly at 602-791-0091.
