When selling or buying an existing single family home in Scottsdale who has the advantage buyers or sellers?
Let’s answer this question from a supply and demand perspective. The rule is that around six months of supply is an equilibrium market, meaning neither the buyer or seller has an advantage when it comes to supply and demand. Let’s review the table below.
We see in the table that in September 2015 homes priced under $600,000 have an estimated months of supply of 3.5 months or less. Homes priced between $600,000 and $699,999 have 4.5 months. Homes between $700,000 and $899,000 are at 6 months. Homes between $1,500,000 and $1,999,999 have a 25 month supply.
So the lower the price, the more demand. Thus, more of a seller’s market and the opposite is true for higher priced properties.
Also, as shown in the table out of the 399 sales in September there were three short sales and eight lender owned sales. The distressed market is also gone.
The next two tables compare monthly sales and monthly new listings year-over-year for the first nine months. in 2015 there are 311 or 9% more sales than 2014.
When comparing new monthly listings, there were 175 less new monthly listings in the first six months of 2015 than 2014, but this trend reversed from July through September or the third quarter. In the third quarter new monthly listings were 160 higher in 2015 over 2014.
The next chart show how existing single family properties were purchased by two categories, either cash or with a loan. In 2015, there were 310 more purchases with a loan compared to 2014.
The next chart is for purchases over $1,000,000. In 2015, there were 20 more purchases over $1,000,000 than in 2014. Sixteen of these purchases were with a loan.
So what is the conclusion on whether it is a seller or buyer market? From a supply and demand perspective only, in September sellers were favored for sales under $600,000. Sales between $700,000 and $899,999 it is a flip of the coin, while sales over $900,000 favored buyers.
Overall sales are up in 2015 over 2014. There is a notable increase in demand with buyers purchasing with a loan or mortgage. This demand to purchase with a loan most likely will continue to grow since Scottsdale has both job and population growth.
We need to keep our eye on the third quarter year-over-year increase in new monthly listings.
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