The Scottsdale housing market is dealing with high demand and low supply. Sellers are well aware that they can command a premium for their homes because demand is the craziest it’s ever been. According to local Realtors, the Scottsdale housing market has joined the list of popular destinations. Residents are migrating from California, Colorado, and Illinois, and inventory simply cannot keep up. As is the case throughout the country, home builders in Scottsdale are struggling to keep up with demand, hampered by the high cost of lumber and other building materials.
Scottsdale is a suburb of Phoenix, sitting on the eastern side of Maricopa County. It is overshadowed by Phoenix unless you’re a golf aficionado or watch baseball. Scottsdale is home to around a quarter-million people, making it one of the largest suburbs in the Phoenix metro area. The city is roughly a twenty-minute drive to the famous Phoenix Sky Harbor International Airport. It retains its suburban feel despite heavy development and tourist attractions.
The area contains a mix of families, young professionals, and retirees. There are several reasons to consider investing in Scottsdale real estate. Over the last five years, data shows a stable Scottsdale housing market with average sale point and price per square foot seeing a steady increase. If you are an investor, Scottsdale has a track record of being one of the best long-term real estate investments in the nation.
In the last twelve months, Scottsdale’s appreciation rates remain among the highest in the country, at 14.84 percent, which is higher than the appreciation rates in 95.25 percent of the country’s cities and towns. According to NeighborhoodScout’s data, Scottsdale appreciation rates were 5.43 percent in the most recent quarter, which equates to an annual appreciation rate of 23.53%. Is Scottsdale going to be one of the hottest real estate markets for investors in 2021-2022? Let’s take a look at the latest Scottsdale housing market trends.
Scottsdale Real Estate Market Trends 2021 (Most Recent)
Single-family detached homes are the single most common housing type in Scottsdale, accounting for 54.56% of the city’s housing units. Owner-occupied, three and four-bedroom dwellings are the most prevalent type of housing you will see in Scottsdale’s single-family detached homes. Scottsdale’s housing market also has large apartment complexes and multi-family homes.
According to Redfin, the Scottsdale housing market is somewhat competitive. In August 2021, Scottsdale home prices were up 25.7% compared to last year, selling for a median price of $715K. On average, homes in Scottsdale sell after 35 days on the market compared to 51 days last year. There were 771 homes sold in August this year, down from 887 last year.
Some homes get multiple offers.
The average homes sell for around list price and go pending in around 32 days.
Hot homes can sell for about 3% above list price and go pending in around 13 days.
How Much Are Sellers Asking For To Sell a House in Scottsdale?
Scottsdale is a seller’s market, which means that there are more buyers than available homes. Due to the scarcity of available homes in Scottsdale, sellers have an advantage. In a seller’s market, homes sell more quickly, and buyers must compete for a property. These market conditions frequently induce buyers to spend more on a home than they would normally.
According to Realtor.com, the median asking price (or listing price) of homes in Scottsdale, Arizona was $750K in August 2021, an increase of 7.3 percent year over year.
The median price per square foot for listings was $354.
The median price of a home sold was $715,000.
In August 2021, homes in Scottsdale, Arizona sold for approximately the asking price.
Homes typically sell after 42 days on the market.
The median days on market in Scottsdale, AZ has remained stable over the last month and slightly decreased over the last year.
This report provided by Scottsdale Area Association of REALTORS covers residential real estate activity (Condo/Townhouse/Apt., Mobile/Manufactured, Single Family) in the Maricopa County & Scottsdale service area. Annual Percent changes are calculated for August 2021.
Scottsdale Housing Prices Trends
Average Listing Price went up 33.8%, from $1,207,499 to $1,616,041.
Median Listing Price went up 15.8%, from $777,000 to $899,950.
Average Sales Price went up 25.6%, from $710,824 to $892,711.
Median Sales Price went up 23.9%, from $569,000 to $705,000.
Median Sales Price as a % of Median List Price was 101%.
Avg Sales Price as a % of Avg List Price was 99%.
Scottsdale Housing Supply
New Listing Count was down 21%, from 978 to 773.
New Listing Volume was $738,932,210, down 11.1%.
Active Listing Count was down 55.9%, from 1,832 to 808.
Active Listing Volume was $1,305,761,463, down 41%.
Months of Inventory was down -51.1%, from 2.1 to 1.
Scottsdale Housing Sales
Pending Sales Count went up 26.4%, from 732 to 925.
Pending Sales Volume was $1,060,472,501, up 74.9%.
Closed Sales Count went down 10.3%, from 817 to 733.
Closed Sales Volume was $654,356,808, up +12.7%.
Maricopa County Housing Prices Trends
Average Listing Price went up 25.1%, from $671,801 to $840,311.
Median Listing Price went up 29%, from $399,140 to $515,000.
Average Sales Price went up 23.8%, from $412,145 to $510,229.
Median Sales Price went up 25.2%, from $333,182 to $417,000.
Median Sales Price as a % of Median List Price was 103%.
Avg Sales Price as a % of Avg List Price was 101%.
Maricopa County Housing Supply
New Listing Count was down 7.6%, from 8,840 to 8,164.
New Listing Volume was $4,354,839,060, up 5.7%.
Active Listing Count was down 46.6%, from 10,594 to 5,662.
Active Listing Volume was $4,757,840,124, down 33.1%.
Months of Inventory was down -37.7%, from 1.2 to 0.7
Maricopa County Housing Sales
Pending Sales Count went up 19.6%, from 7,687 to 9,196.
Pending Sales Volume was $5,206,991,018, up 51.1%.
Closed Sales Count went down 3.7%, from 7,735 to 7,447.
Closed Sales Volume was $3,799,675,110, up +19.2%.
Additional Key Housing Metrics
The number of distressed residential properties that were for sale in August was 6, down -87.2% year-over-year.
The count of distressed residential properties sold in August was 6, down -77.8% year-over-year.
Scottsdale Real Estate Market Forecast 2021-2022
Let us look at the price trends recorded by Scottsdale (a real estate database company) over the past few years. Since Sep 2011, the typical home value in Scottsdale has appreciated by around 141.5%. The typical value of homes in Scottsdale is currently $722,172. It indicates that 50 percent of all housing stock in the area is worth more than $722,172 and 50 percent is worth less (adjusting for seasonal fluctuations).
ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The supply is exceeding the demand, giving purchasers an advantage over sellers in price negotiations. In other words, there are more homes for sale than there are buyers in the marketplace. Scottsdale is a seller’s real estate market – which means there are a lot of qualified buyers in the marketplace and not enough homes for sale in the market.
The typical home value of homes in Phoenix-Mesa-Scottsdale Metro is $401,673, up 31.8% over the past year.
Zillow predicts they will rise 21.7% in the next year.
Maricopa County home values have gone up 31.5% (current = $410,842) over the past year and will continue to rise over the next twelve months.
According to Zillow, the Scottsdale real estate market is hot.
Scottsdale home values have gone up 31.7% (current = $722,172) over the past year and will continue to rise over the next twelve months.
Graph Credits: Zillow.com
Scottsdale Real Estate Investment Overview
Is it worth buying a house in Scottsdale, AZ? Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying a property in Scottsdale is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead. We have already discussed the Scottsdale housing market forecast for answers on why to put resources into this market.
The Phoenix area is growing, and this includes the Scottsdale area. Construction can’t keep up with demand, so the median home price is more than 700,000 dollars. The average rent is around 1,900 dollars a month (a 22% increase compared to the previous year), though you’ll get much more for a single-family home rented out in the Scottsdale housing market.
Although, this article alone is not a comprehensive source to make a final investment decision for Scottsdale we have collected ten evidence-based positive things for those who are keen to invest in Scottsdale real estate. Investing in Scottsdale real estate will fetch you good returns in the long term as the home prices in Scottsdale have been trending up year-over-year. Let’s take a look at the number of positive things going on in the Scottsdale real estate market which can help investors who are keen to buy an investment property in this city.
The Excellent Quality of Life
A city in a large metropolitan area is competing with every other city for residents. If the city is poorly managed or simply deteriorates, they’ll lose residents who only have to move a few miles to get away from it. In this regard, Scottsdale real estate investment is a wise choice because the city stands out in terms of quality of life. We’ll ignore the golf courses and focus instead on A-rated public schools and family-friendly amenities. They could do a little better on crime, but there are areas in Phoenix real estate market that are far worse.
Scottsdale’s Job Market
Scottsdale is also an emerging tech market, with companies GoDaddy, Yelp, Paypal, Indeed.com, and Paradigm Tech all opening offices downtown. This is a great town for businesses, including small businesses and entrepreneurs. The Scottsdale job market has consistently averaged an unemployment rate a full point lower than the state average and roughly half a point lower than the Phoenix metro area average. That alone would bolster the Scottsdale housing market. However, the relatively high property values mean much work here but live in other cities. Yet it contributes to a higher than expected rental rate in the Scottsdale housing market. Ironically, the high per capita income of 54K per person, twice the state average, drives up rents and housing prices.
Scottsdale’s Tourist Market
Scottsdale is famous with locals for its Fashion Square Mall. However, you see more people coming here on vacation to enjoy the 200 local golf courses, many of which are world-class. Others come to see the Major League Baseball teams in spring training in Scottsdale. Others stay in Scottsdale while watching teams practice in nearby Mesa. All of this explains why the city has the fourth-largest number of AAA four-diamond hotels in the United States. The nature of the tourist market, though, gives you the ability to rent out properties both nightly and for weeks at a time.
The Diverse Scottsdale Rental Market
The Scottsdale housing market has a more diverse rental market than just catering to those who can’t afford to buy a single-family home. For example, the area is famous for its snowbirds, retirees who come for the winter before returning home. Some of them buy a one or two-bedroom home to live in half the year. Others rent such properties. While many live in Sun City and other age-restricted communities, others choose to rent elsewhere in the Scottsdale real estate market.
They’ll prioritize amenities, proximity to healthcare providers, and low maintenance over cost in many cases. This population also increases demand for RV-friendly homes and trailer parks. That provides an unusual play for those who want to profit off affordable housing in the Scottsdale housing market but don’t want to deal with Section 8 rentals.
Latest Rental Trends
As of September 24, 2021, the average rent for a 1-bedroom apartment in Scottsdale, AZ is currently $1,830. This is a 29% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Scottsdale remained flat. The average rent for a 1-bedroom apartment increased by 4% to $1,830, and the average rent for a 2-bedroom apartment increased by 8% to $2,700.
The average rent for a 2-bedroom apartment in Scottsdale, AZ is currently $2,700, a 36% increase compared to the previous year.
The average rent for a 3-bedroom apartment in Scottsdale, AZ is currently $3,997, a 33% increase compared to the previous year.
The average rent for a 1-bedroom apartment in Scottsdale, AZ is currently $1,861, a 32% increase compared to the previous year.
Arizona is landlord-friendly compared to neighboring states like Nevada and California. What makes it notable is that it is becoming more landlord-friendly. For example, the city is passing laws that make it easier for landlords to enter units to make repairs. The state is making it easier to discard abandoned personal property and limiting appeals by those going through eviction. And it was already relatively fast and easy to evict people in Arizona.
The Scottsdale real estate investment options include the short-term rental market. The city requires short-term and vacation rentals to be registered with the county. Landlords must pay the transaction privilege sales tax and transient tax. A sales tax license is required. However, that’s simply the city saying you can rent out these units if you pay the same taxes that hotels do. The rest of the city’s regulations make the Scottsdale real estate market-friendly for renting out via sites like Airbnb.
They don’t limit short-term rentals to a tourist district. You can rent out both the main house and accessory dwelling unit on the same property. And state law doesn’t give cities the ability to apply new regulations that essentially ban short-term rentals. However, homeowners associations can regulate these types of properties, so do your research before you buy a Scottsdale real estate investment property assuming you can generate short-term rental income.
The Geographic Constraints
The Scottsdale real estate market is certain to experience appreciation for the same reason the local quality of life is so good – it is nearly surrounded by parks. The northern end of the city touches Tonto National Forest. The western edge borders McDowell Mountain Regional Park. Homes with views and access to the national parks command a premium. Fort McDowell is a Native American reservation likewise off-limits. Tempe, Phoenix, and Mesa are all heavily developed. The city simply doesn’t have much room to expand to meet demand. This means the newest development will require redevelopment, increasing the cost of such properties and the value of existing housing stock.
At first glance, Scottsdale seems like a home buyer’s dream. It is full of suburban neighborhoods. The median household income is more than 70,000 dollars a year, and that’s pulled down by a retiree population so large that the average age is 46. However, affordability in the Scottsdale real estate market is relative. The median wage is 73,000 but the median home price is approaching 400,000 dollars a year. This means many cannot afford to own home though they may want to.
This drives demand for rentals in the Scottsdale housing market. It is surprisingly only a third of the residents rent, though this is somewhat higher than the 20 percent average for the area. Conversely, the high-paying jobs in the area are one reason many people move here, generating demand for rental properties by new residents.
Here are the 10 best neighborhoods in Scottsdale to invest in real estate because they have the highest appreciation rates (List by Neigborhoodscout.com).
Mountain View Mobile Home Park
N Scottsdale Rd / E Indian School Rd
N Pima Rd / E Thomas Rd
Wheel Inn Ranch
E Thomas Rd / N 60th St
N 68th St / E Oak St
Scottsdale Mobile Home Park / Riviera Mobile Home Park
City Center
N Pima Rd / E Indian School Rd
Woodleaf
The Relatively Low Tax Burden
Arizona has a surprisingly low property tax rate. It averages 0.85 percent of the property’s assessed value, while the national average hovers around 1.1 percent. Another benefit of Arizona real estate law is that the state limits the increases in the assessed value of property to 5 percent (or less) per year. This means your property taxes probably won’t rise at the same rate as the property value. That’s good since the Scottsdale housing market saw an appreciation of roughly five percent last year and is predicted to see at least 2 percent growth in 2019. Income taxes are competitive with the rest of the country and a bargain compared to tax-and-spend states like California, too.
Summary
Buying an investment property is different from buying an owner-occupied home. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor in Scottsdale, AZ is your ability to find great real estate investments in that area. Buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market.
We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The other best place to invest in real estate is Bakersfield, CA. Bakersfield is developing and diversifying, maturing beyond the farming hinterland that led it to be written off as a California backwater. Its stabilized real estate market won’t offer skyrocketing property valuations or equally shocking rental rates, but that makes it a good choice for investors seeking solid, steady returns.
Whether seasonal workers who will never settle down or locals whose seasonal employment precludes homeownership, this has created a strong rental market. Median rents hover around 1500 dollars a month for single-family homes in the Bakersfield real estate market. When you take apartments into account, the median monthly rent is a little under a thousand dollars a month.
Another sizzling market to invest in real estate in 2019 is Honolulu, HI. The Honolulu real estate market is dense, profitable, and unable to grow except at the margins. This will result in high returns for almost any Honolulu real estate investment property. The possibility of staying for free in a Hawaii condo or bungalow you own is just a bonus.
There is a rising demand for rental units year-over-year. The issue however is that rent prices are too high to be affordable for many renters. Housing in Honolulu is expensive, and the relatively large number of people working in low-pay retail and tourism jobs results in many who will never be able to afford to own a home or condo. Roughly sixty percent of Hawaii residents are cost-burdened renters, people who spend more than a third of their income on rent. Compounding the matter is that they’re competing with several large pools of renters who are almost immune to local economics, driving up rental rates.
Let us know which real estate markets you consider best for real estate investing! If you need expert investment advice, you may fill-up the form given here. One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References
Housing Market Data, Trends & Statistics
https://www.zillow.com/scottsdale-az/home-values
https://www.redfin.com/city/16660/AZ/Scottsdale/housing-market
https://www.neighborhoodscout.com/az/scottsdale/real-estate
https://www.realtor.com/realestateandhomes-search/Scottsdale_AZ/overview
https://www.zillow.com/phoenix-mesa-scottsdale-metro-az_r394976/home-values
Landlord friendliness
https://www.avail.co/education/laws/arizona-landlord- space here tenant-laws
https://www.mashvisor.com/blog/ more spaces here 5-most-landlord-friendly-states
https://www.american-apartment-owners-association.org/property-management/latest-news/another-state-goes-landlord-friendly
Short term rentals
https://www.scottsdaleaz.gov/codes/vacation-short-term-rentals
Quality of life
https://www.niche.com/places-to-live/scottsdale-maricopa-az
Job market
https://www.areavibes.com/scottsdale-az/employment
Snowbirds
https://www.tripsavvy.com/what-is-a-snowbird-2683049
Geographic constraints
https://en.wikipedia.org/wiki/Fort_McDowell,_Arizona
Tourist
https://livability.com/az/scottsdale/things-to-do/8-reasons-to-move-to-scottsdale-az
Taxes
https://www.tripsavvy.com/arizona-property-tax-2682000
https://smartasset.com/taxes/arizona-property-tax-calculator
The post Scottsdale Housing Market: Prices | Trends | Forecast 2021-2022 appeared first on Norada Real Estate Investments.