Here's your Scottsdale Housing Market Update, JAN 2022. It's still an extreme sellers market and buyers face fierce competition. Let's take a look at current stats and trends. Looking to make a Scottsdale move in 2022? Get a good agent, be patient and persevere!
- Scottsdale Housing Market Update, JAN 2022 Stats
- Spiking Scottsdale Home Prices
- Affordability in Scottsdale
- Why Scottsdale Housing is in Short Supply
- Interest Rates Are on the Rise
- Terms Defined
- Wrap-Up and Pep Talk
Scottsdale Housing Market Update, JAN 2022 Stats
Here's a snapshot of the numbers for January, 2022. It's helpful to compare January 2022's numbers with December 2021, and January 2021 to see the big picture.
Market Update JAN 2022
Median Sold Price
+ .5 %
+ 23.7 %
Months' Supply Inventory
+ 13.8 %
- 19.9 %
Homes for Sale
- 9.9 %
- 34.7 %
- 21.1 %
Homes Under Contract
+ 35.1 %
- 22.8 %
Sources: Facts and Trends™, Trendgraphix, Inc. and Long Realty's Research Department.
Spiking Scottsdale Home Prices
Scottsdale's exploding as a popular place to live. It's beautiful, with an amazing ‘winter' climate, and many exciting events and activities, indoors and out, including world-class golf and spring training baseball.
The City of Scottsdale provides pristine, well-managed assets, like the arts, parks, trails and infrastructure, plus a low crime rate. We also have excellent schools, healthcare, and places of worship. A strong economy, fueled by many companies starting up and relocating here, creates excellent work opportunities. Our airport/airpark and partnership with ASU are key facets to our success too.
It's an exciting time to be part of Scottsdale's big growth, if that's what floats your boat. For longtime residents, the once relaxed vibe of Scottsdale is ebbing, except for early mornings and slower summers.
The fast pace of change and vanishing landmarks can be a bit sad. It's difficult to navigate the traffic and crowds that our growth and attractions bring to Scottsdale. It just might be time to entertain a move and selling your home to find a new place with a slower pace. Many choices are possible for your next exciting chapter!
Affordability in Scottsdale
For years, we had reasonable home affordability given the many amenities of a good lifestyle we enjoy. Now our secret's out and the tide — or sand, has shifted.
Scottsdale traditionally has the highest median home price in the Phoenix Metro area. Many of Scottsdale and Maricopa County's affordable homes have been bought up by institutional investors, making it very hard for people seeking affordable housing.
With changes resulting from the pandemic, like freedom of movement for workers, high property taxes in other states, and historically low interest rates — coupled with our enticing cooler season climate, it's the perfect storm of sunshine drawing people to our fair city.
But, Scottsdale's desirability comes at a big price tag today. People are cashing out of homes in higher-priced regions and coming to Scottsdale, where compared to other areas, there were bargains. Not so anymore.
Why Scottsdale Housing is in Short Supply
Factored into our perfect storm, is an undersupply of new construction — a remnant from a painful recovery in overbuilding before the Great Recession. This lead to caution in new building. And, soon the influx of new people moving here outstripped our housing supply.
The good news? New home construction is happening in Scottsdale. But, we are currently facing building supply and labor shortages. New homes are now taking more time and are more costly to build.
At first glance, rising home prices appear to be a boon for residents to sell their homes and cash out our equity, but we also face a challenge.
Where can we affordably move, if we still want to stay in Scottsdale? We too are limited by higher prices and low inventory. This further hinders new supplies from hitting the market that would come from us selling our homes.
This is where creativity, patience and having a stealth Realtor® will give you hope — and find opportunities to live your next dream!
Interest Rates Are on the Rise
From FreddieMac: ‘30-year fixed-rate mortgage averaged 3.89 percent with an average 0.8 point for the week ending February 24, 2022, down from last week when it averaged 3.92 percent. A year ago at this time, the 30-year FRM averaged 2.97 percent.'
What's the important thing to know about rising interest rates in our market, if home ownership is on your radar? It's sage advice to commit to persevering with your Realtor®. Taking advantage of still-low rates to get into a home, even though it's frustrating, will keep your payments lower over the long term.
You don't want to be in the position of kicking yourself later, because you thought waiting was a good idea. With inflation at ~ 7.5% today, when everything costs more, rising interest rates will increase your monthly house payments — a lot, along with everything else you're paying more for.
You might also have to consider a home that is not an HGTV showplace, just to get in the door of your new home.
FreddieMac has an excellent interactive table and many resources for understanding mortgage interest rates.
It's the exact middle of a data set of home prices. It's where half of the houses priced for less and half priced for more. And, it's more accurate than the Average Price. Why? Because there can be properties that skew perceived property values by selling for much more or less than most properties in an area.
Rising median home prices indicate a seller's market and falling ones indicate a buyer's market. Looking at these numbers with your Realtor® will help inform your decision when buying a house.
Average Home Price
‘Average and median both measure a middle value in a set of data. The average is calculated by adding up all of the individual values and dividing this total by the number of observations. The median is calculated by taking the ‘middle' value, the value for which half of the observations are larger and half are smaller.'
‘Here's an example of why the median is a better measure, when there is an extreme value.'
‘Five homes sold in a market with the following prices: $80,000, $90,000, $100,000, $110,000 and $500,000. The median price is $100,000.
The average price is (80,000 + 90,000 + 100,000 + 110,000 + 500,000) / 5 = $176,000.
In this case, the $500,000-priced home ‘pulled up the average price well above the prices of the more typical homes in the market. Thus, the median price provides a better measure of the typical value of a home.'
Source: Clark Investment Group
Months' Supply Inventory (MSI)
A formula to show how supply and demand in the housing market relate. ShowingTime gives a good in-depth explanation.
From NAR: ‘Months’ supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace.'
‘Historically, six months of supply is associated with moderate price appreciation, and a lower level of months’ supply tends to push prices up more rapidly.'
‘In December 2020, the months’ supply (nationally) was at a record low of 1.9 months, meaning that at the current sales pace it would take just 1.9 months for housing inventory to be depleted.'
Source: Inventory and Months' Supply by Meredith Dunn Meredith Dunn is the Research Communications Manager for the National Association of REALTORS®.
With Scottsdale's current MSI at ~ .8 months, we have an extreme seller's market.
Home Price Appreciation
Here's a great summary from Corporate Finance Institute:
- ‘Price appreciation is the increase in the value of a property over a period of time.
- The amount of price appreciation of a property is dependent on various factors such as demand and supply, interest rates, location, future development plans, etc.
- Some investors purchase properties with the goal of selling it later when the supply is low, in order to benefit from the price appreciation of the property.'
Wrap-Up and Pep Talk
That's the scoop on the Scottsdale Housing Market Update, JAN 2022.
You need your Realtor® now more than ever — to show you the ropes, and be your trusted partner. To help you be prepared. To be creative and forward thinking — in the art of the deal. To compete and negotiate on your behalf. To guide you with an objective, data-driven, information-gathering and discovery approach — in what can be an emotional ride for you. To coach you to make your own, sound decisions.
What's your part? Finding a savvy agent. Trusting the process and being a good partner. Doing your homework to be ready and competitive when opportunity strikes. Your agent will also help you be realistic and emotionally resilient to win the long game of making your best Scottsdale move! Thank you for visiting with me!
Related Post: Making a Move to Scottsdale
Scottsdale Lifestyle Blogger
I'm a 5th generation native Arizona gal who loves showing and telling what makes Scottsdale an amazing place to visit and make home! I hope you enjoy our city through my lens, making your own discoveries and memories here!