By Scott Gaertner
My January quarterly update described the almost unprecedented drop in demand at the end of last year. I suggested then that you not get too upset, as the media loves to hype such things into “end of the world’ storylines. In retrospect, I still think that was good advice. Most experts now attribute the sudden decline in year-over-year sales volume to temporarily rising interest rates and falling stock market indexes.
While there really is nothing to be too concerned about, we are still in pretty much the same boat this quarter in terms of sales volume. Interest rates, the S&P 500, and the Dow Jones Industrial have all improved since the first of the year. But, as you can see in the chart below, 2019 sales in Scottsdale North are still significantly trailing the year-over-year sales of both 2017 and 2018.
In my opinion, the largest reason for this trend, then and now, is that the market is striving for balance. It has been out of balance in favor of sellers for over four years now, due to a chronically low supply of inventory. There are simply not enough of the listings that buyers are searching for on the market.
As you can see in the chart below, the number of listings available for purchase has increased this year, but the numbers are still well behind 2017 and 2018.
Typically, when we see good demand and low supply, prices rapidly move up. We are not seeing that right now because buyers are pushing back. This push and pull of supply and demand market dynamics is normal.
The following factors need to change for us to see Scottsdale North sales volumes increase:
• Supply Increase – More listings hit the market.
• Demand Increase – More buyers need to enter the market, or the existing buyers need to accept current market pricing.
• Prices Decrease – Sellers adjust their sales price to the value dictated by the market value.
Watch for a flurry of sales to happen in the next quarter, as the most motivated buyers and sellers adjust their thinking ahead of the summer heat! (See the back cover page of this paper for individual community statistics.)
Scott Gaertner is an Associate Broker with Keller Williams Northeast Realty, who for the past 25+ years has helped more people to find their lifestyle niche in the Scottsdale North area than anyone else.
