High-end million-dollar luxury properties are in substantial risk for additional price declines.
July 2008 - Custom, billion dollar luxury homes represent the weakest segment inside the Phoenix housing market and are likely headed for extra price declines. This decline is an element of an evolving market trend which is slowly resolving pricing inequities inside housing market to the Phoenix area.
In terms of closed sales, the volume of transactions for homes priced above $1,000,000 is shrinking in absolute terms in addition to being a portion of total sales:
2002 - 0.68%, 465 properties (Normal Market)
2003 - 0.74%, 594 properties (Normal Market)
2004 - 1.1%, 1,041 properties (Accelerating Price Appreciation)
2005 - 1.7%, 1,938 properties (Rapid Price Appreciation)
2006 - 2.7%, 1,992 properties (Transitional Market)
2007 - 3.2%, 1,737 properties (Declining Market)
2008 - 2.3%, 582 properties YTD (Declining Market)
Sales for 2008 are clearly down from 2007 figures and as a result, the competitive environment for homes above $1,000,000 is intensifying. The market may be seeing a general corrective trend for the reason that the proportion of luxury properties sold each year is recalibrating more closely to 2004 levels. This modification can establish significant pressure for prices to dip further as sellers will probably be expected to adjust to the realities from the market so that you can successfully sell their properties.
Regarding pending sales, "absorption," as measured by the percentage of available homes currently under contract, continues this trend:
Only 5.6% of homes priced from $1,000,000 to $2,000,000 are still under contract.
Only 3.3% of homes priced above $2,000,000 to $3,000,000 are presently under contract.
Only 3.5% of homes priced at $3,000,000 and above are still under contract.
This deficiency of activity with the high-end with the market means the general performance of specific communities within the Phoenix area.
Scottsdale and Fountain Hills, recognized for their affluent lifestyles and cost of living, are two of the weakest markets within the Valley, each averaging about 10% of obtainable properties currently under contract.
Compare that to Chandler, Gilbert, Ahwatukee, and Glendale that average 16% to 21% of homes currently under contract. Maricopa, Surprise, and Queen Creek, much more affordable markets, lead the market because of buyer curiosity about the massive amounts of foreclosure-related properties there.
But it is not all bad news for the way one discusses it.
The alterations be considered a sign that this marketplace is slowly trying to resolve pricing imbalances and is also is a very positive trend within the long-term--though it will not believe way for many for a while. At the same time, there'll be more opportunities for buyers to obtain fantastic properties at improved prices.
July 2008 - Custom, billion dollar luxury homes represent the weakest segment inside the Phoenix housing market and are likely headed for extra price declines. This decline is an element of an evolving market trend which is slowly resolving pricing inequities inside housing market to the Phoenix area.
In terms of closed sales, the volume of transactions for homes priced above $1,000,000 is shrinking in absolute terms in addition to being a portion of total sales:
2002 - 0.68%, 465 properties (Normal Market)
2003 - 0.74%, 594 properties (Normal Market)
2004 - 1.1%, 1,041 properties (Accelerating Price Appreciation)
2005 - 1.7%, 1,938 properties (Rapid Price Appreciation)
2006 - 2.7%, 1,992 properties (Transitional Market)
2007 - 3.2%, 1,737 properties (Declining Market)
2008 - 2.3%, 582 properties YTD (Declining Market)
Sales for 2008 are clearly down from 2007 figures and as a result, the competitive environment for homes above $1,000,000 is intensifying. The market may be seeing a general corrective trend for the reason that the proportion of luxury properties sold each year is recalibrating more closely to 2004 levels. This modification can establish significant pressure for prices to dip further as sellers will probably be expected to adjust to the realities from the market so that you can successfully sell their properties.
Regarding pending sales, "absorption," as measured by the percentage of available homes currently under contract, continues this trend:
Only 5.6% of homes priced from $1,000,000 to $2,000,000 are still under contract.
Only 3.3% of homes priced above $2,000,000 to $3,000,000 are presently under contract.
Only 3.5% of homes priced at $3,000,000 and above are still under contract.
This deficiency of activity with the high-end with the market means the general performance of specific communities within the Phoenix area.
Scottsdale and Fountain Hills, recognized for their affluent lifestyles and cost of living, are two of the weakest markets within the Valley, each averaging about 10% of obtainable properties currently under contract.
Compare that to Chandler, Gilbert, Ahwatukee, and Glendale that average 16% to 21% of homes currently under contract. Maricopa, Surprise, and Queen Creek, much more affordable markets, lead the market because of buyer curiosity about the massive amounts of foreclosure-related properties there.
But it is not all bad news for the way one discusses it.
The alterations be considered a sign that this marketplace is slowly trying to resolve pricing imbalances and is also is a very positive trend within the long-term--though it will not believe way for many for a while. At the same time, there'll be more opportunities for buyers to obtain fantastic properties at improved prices.
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