Scottsdale is known for having a rather famous market compared to other cities in the state. Thanks to its thriving job market and famous commercial real estate market, it's no surprise that many people are looking to move into this city in the Phoenix Metro Area.
Before you invest in this market, however, you should note a few trends about it so that you know how it tends to behave. Overall, Scottsdale is also known for being relatively expensive compared to other cities, so you should be prepared to make a significant investment.
This article covers everything you should know about this housing market, including home values, trends you should be aware of, and more.
Trends in the Scottsdale Real Estate Market
Overall, the market in Scottsdale isn't looking as good for sellers as it was before. While there's still a diverse range of options and opportunities out there, the landscape seems to be opening more opportunities for some buyers.
Let's look at recent trends regarding Scottsdale that you should be aware of:
Median Home Sold Price
Even though the median listing home price stays relatively up in comparison to last year ($925K in 2023), there was a drop in the median home sold price. As of April 2023, prices dropped 7.7% compared to last year; the number stayed at $780K.
Overall, all home types, including single-family homes, townhouses, and condos have experienced drops in price.
Number of Homes Sold
Here's where we see the biggest drop in statistics. In April 2023, there were 487 homes sold; compared to the 782 sold last year, it shows a significant, 37.7% drop.
Median Days on the Market
This is another indicator that shows Scottsdale may not be such a favorable market for sellers today, as the median days on the market increased to 53 from 21 last year, which means homes in Scottsdale, AZ, sell after an additional 32 days over what it took in 2022.
Even though the sale-to-list price dropped to 97.2% this year, that number is still considered fairly balanced for both sellers and buyers, although the latter may have the upper hand in certain negotiations today.
In 2023, 9.7% of homes in Scottsdale, AZ, sold above their listing price. On the other hand, 30.3% of homes during that same period sold with price drops, which is a significant number to consider as a buyer.
As mentioned before, buyers may have the upper hand in home sales, as many properties are being sold below their asking price. There may be a few exceptions, such as sales involving luxury homes in North Scottsdale or other areas in high demand.
What's Affecting the Scottsdale Housing Market?
Even though the market in AZ, Scottsdale is considerably strong today, there are still a few factors that can keep affecting it in the following months. It's important to keep those in mind before you make any big investment in a property here:
Interest Rates and Affordability
Something that keeps affecting housing markets throughout the country is mortgage/interest rates. The Federal Reserve, in an effort to fight inflation, keeps raising rates, which is known for affecting everyone, especially buyers.
In essence, it will be harder for all buyers to afford properties, and sellers may not be as likely to sell their current home, as buying another one will imply a huge investment on their part.
We'll have to see if the interest rates slow down over the year, but as of today, they have proven to be one of the main problems in any housing market in the U.S.
Supply and Demand
Currently, there's a low inventory of available homes and a high demand for them, according to the statistics. However, keep in mind that numbers have decreased recently, which implies that buyers may have more opportunities to negotiate better prices for their next property.
An interesting thing about Scottsdale is that there's not much land available to start new construction, which means there aren't many new developments for homes. This is one of the reasons why home values, despite their recent decreases, stay high.
Any kind of government intervention in the national or local real estate market can affect how it behaves in the future. Interventions can involve new laws, taxation, and more.
Overall, demographics give you information on the income, race, gender, and age of potential buyers in any area. Moreover, this data can also show you which percentage of new buyers are retirees or people looking for a second home.
Is the Housing Market in Scottsdale Going to Crash?
The Scottsdale market is very unlikely to crash, as it's currently strong and balanced, and it seems it will stay that way over the following months.
In essence, a low inventory of available homes will keep home prices high, and since there's still high demand for these properties, we can expect the market to stay balanced despite the recent declines.
Even though Scottsdale isn't considered too attractive for first-home buyers due to its high prices, second-home buyers and retirees are still likely to keep investing in this great city.
Something to note about the real estate market in Arizona is that, while Phoenix isn't doing too well in numbers, Scottsdale isn't following the same trend. One of the main reasons for this is the limited availability of properties, which keeps the market stable due to ongoing high demand.
If you're a buyer, you should be prepared to make a big investment, though; this market isn't considered affordable in comparison to other cities. However, considering the recent declines, you may have more wiggle room to negotiate better deals with your seller.
Still, remember that the outcome of your negotiation will ultimately depend on who you're negotiating with and the type of property you're investing in. We expect both parties to have many opportunities in this market, which lowers the possibility of a crash even more.
More Statistics About the Scottsdale Real Estate Market
Let's look at a few recent statistics that may help you in your decision of investing in Scottsdale's real estate market:
- About 76% of homebuyers in Scottsdale are looking to stay within its metropolitan area.
- On the other hand, the other 24% are looking to move out of the city and into Prescott Valley, Show Low, Flagstaff, and other cities.
- Scottsdale currently hosts 95 public schools rated "good" or higher.
- There are about 26 private and charter schools with great ratings in Scottsdale.
- Desert Mountain is considered the most expensive neighborhood in Scottsdale with a median listing home price of $3M.
- Monterey Arcadia is considered the most affordable neighborhood in the city with a median price of $470K.
- About 16% of homes in Scottsdale are at risk of flooding.
Predictions for the Scottsdale Real Estate Market
After reading everything on this page, you may conclude that the market forecast for 2023-2024 is fairly optimistic; you would be right.
It's essential to note that the general forecast for this city may depend on the forecast for the metropolitan statistical area, which is from Phoenix.
Overall, Phoenix is expected to have a decline in home values for 2023, but the MSA is expected to have a slight increase of 1.5% in home prices by 2024. While this can affect Scottsdale's market, remember that particular factors, such as its low inventory of homes, can cause slightly different numbers.
Why is Scottsdale such a sought-after real estate market? Here are a few reasons why:
As mentioned at the beginning of this page, Scottsdale is currently having an excellent job market, as it keeps offering many new opportunities for all kinds of businesses, including entrepreneurs. Currently, the unemployment rate in the city is almost half a point lower than in Phoenix's metro area and a full point lower than Arizona's average.
Quality of Life
Even though crime rates aren't as favorable for people as in other cities, Scottsdale still offers a wide range of high-quality amenities and schools, making it more appealing to many different investors.
Quality of life is one of the main driving factors of any investment decision, so if you're looking for somewhere that can guarantee great living, then Scottsdale may be a good option to consider.
Scottsdale's golf courses are considered some of the best out there, and there are also many other popular destinations to go there, which drives the tourist market up. Overall, the city has a large number of AAA four-diamond hotels in the country, which is something that shouldn't be taken lightly.
The Scottsdale housing market may not be that appealing to first-time buyers, but it still caters to many different types of buyers and renters.
Generally speaking, the average effective tax rate in Arizona is 0.51%, which is significantly lower than the national average (0.99%). This could make the market in Scottsdale (and the rest of the state) more attractive to certain buyers.
Is the Scottsdale Area Good for Investors?
It's safe to say that Scottsdale is currently a great city for both buyers and sellers. As a buyer, however, it's essential that you evaluate all your options carefully and try to negotiate a better price if possible.
Currently, you may have more opportunity to negotiate, as the average home in the city sells below its asking price; this means you could have the upper hand in some cases.
However, remember that Scottsdale is still a city with a high demand for housing, meaning there will be competition most of the time.
If you're willing to invest, then Scottsdale could prove to be a more-than-decent option.
Is Scottsdale a Buyer's Market or a Seller's Market?
The numbers suggest that Scottsdale is a seller's market, as there are fewer homes available for sale, but there's still a high demand for properties in the area.
However, this doesn't mean that buyers will not find attractive investment opportunities; as long as they know where to look and how to negotiate, they're likely to find a great property to invest in.
What Makes Scottsdale Popular for Investors?
Many factors make Scottsdale an amazing place for those willing to invest, including an excellent job, tourism, and rental market.
Are Home Prices Dropping in Scottsdale, AZ?
On average, prices have dropped a bit in Scottsdale, but that doesn't suggest a significant change in how the market is performing. In fact, prices are expected to increase somewhere between 2023 and 2024.