Welcome to the LUXE BLOG. We always have our finger on the pulse of the luxury real estate market. Today, we’re diving deep into the ever-intriguing world of Paradise Valley’s real estate market. It’s not just about active listings or months of supply; it’s also about understanding what these numbers truly mean for both buyers and sellers.
To kick things off, let’s talk numbers:
With active listings down and months of supply dwindling, it’s a tale of less inventory but consistent demand. However, let’s not overlook the 6.9% decrease in median sale price per square foot.
Why did the median sale price per square foot drop by 6.9%?
Earlier this year, Paradise Valley was boasting value increases of up to 40%. So what changed? The impact of new builds and the timing of their sales can greatly skew these numbers.
Paradise Valley experienced a surge in new custom builds that were contracted a year or two ago. These sales impact today’s market data, but they’re not an accurate reflection of real-time conditions. This is important to note when interpreting trends.
While a 6.9% decrease might raise some eyebrows, it’s not a red flag when considering the market’s previous high gains. Real estate is generally a long-term investment, and fluctuations like this are part of the journey.
From strictly an INVENTORY standpoint, with a 4.65 months of supply, we’re close to a seller’s market but not quite there. However, market health varies considerably across different price ranges. Most importantly, according to Cromford Report, Paradise Valley’s CMI (overall health) was the 5th highest in The Valley at 186.9 as of September 21st. Anything above 110 is a seller’s market. Basically, sellers have the power in PV.
While low price ranges have next to no inventory, the $200,000 to $500,000 bracket is selling well. The higher you go, the more balanced the market, especially in the $1 million to $3 million range. And while we’re talking about the entire Greater Phoenix metro as a whole, this is true in PV as well.
For homes priced over $3 million, it’s a different ballgame. Buyers in this segment have higher expectations and are less willing to compromise. This can contribute to higher contract fallout rates (recently observed).
In the complex tapestry of the Paradise Valley real estate market, various threads come into play. From new builds to price per square foot, and from median prices to long-term investments, understanding these elements is crucial for making informed decisions. Williams Luxury Homes is a boutique brokerage. Aiming to provide ‘A Luxury Experience For Everyone’, we are here for any questions you may have. Additionally, we post a GREAT AMOUNT of content here on our website. Stay tuned to the LUXE BLOG for future insights.