Scottsdale existing-home sales up 36%

Existing-home sales in Scottsdale jumped 36 percent in the first half of this year, and home construction picked up slightly from its glacial pace.

Housing-industry observers remain cautious about where the market is headed because prices have not stabilized and foreclosures accounted for a quarter of the 3,215 homes sold in Scottsdale through June, according to Arizona State University realty-studies reports.

"I see a very definite pent-up demand for things, people wanting to buy," said real-estate agent Bob Morris of John Hall and Associates. "There's still hesitancy to buy in the marketplace, some fear and hesitancy."

Foreclosures and short sales continue to put downward pressure on prices.

Scottsdale's median-home price in June was $378,600, up less than 1 percent from a year earlier. But it was the first year-over-year monthly increase during the first half of 2010. The Valley median price in June was $147,500.

New homes are just a fraction of the Scottsdale housing market. The city has issued 100 single-family building permits from Jan. 1 through last week and is on pace for about 171 new homes in 2010. Last year, Scottsdale approved just 130 home permits, down from 3,100 a decade earlier.

Pulte Homes and Lennar are building a total of 790 homes at Lone Mountain just west of Scottsdale Road. Most of the new-home permits are going to custom and green-home builders, said Michael Clack, Scottsdale's director of development services.

Windgate Ranch, one of the city's only large subdivisions, has several homes under construction, said Linda Rossi, Toll Brothers Southwest region marketing director.

Toll Brothers has completed 237 of 633 planned homes since it started sales in March 2006 at the subdivision northwest of Bell Road and Thompson Peak Parkway.

Prices start at about $500,000 for a 2,750-square-foot home, Rossi said.

"We certainly are seeing light at the end of the tunnel," she said of the housing market.

Condominium prices

Other observers are optimistic as well.

Bob Bell, an insurance agent who tracks the local market, said he is seeing an increase in prices for condominiums that have been refurbished.

He and his wife, Glenda, own two condos at Scottsdale Shadows, a large, formerly age-restricted community at Hayden and Camelback roads.

"I watched it when it went down and I wasn't happy about it, and I've watched it start to inch back up," he said.

The Bells bought their first Scottsdale Shadows condo in July 2004 for $91,000, which they lease out for $950 per month. They bought another unit in March 2007 for $159,000. Both are 1,200 square feet.

At current prices per square foot, Bell figures the second condo is worth about $137,000. He is upside down on it, but prices are up from $80,000 to $90,000 per unit and he can afford to wait for the market to recover.

ASU's June report showed Scottsdale condo sales up 35 percent from a year ago, but the median price slipped 8 percent to $145,000.

In the resale-home market, sales are concentrated at the lower end where it is far easier for buyers to get financing.

Only 5 percent of the Valley homes that sold in June went for more than $500,000, said Fletcher Wilcox, Grand Canyon Title Agency vice president.

The upper limit for conventional loans in Maricopa County is $417,000.

"Homes in north Scottsdale keep dropping in price until they get under that number," said Jay Butler, ASU realty studies associate professor.

However, buyers are still showing that they want to live in Scottsdale, he said.

"The idea is if you want to live in a particular area, now is the time to do it," Butler added. "Prices have dropped so much."

Prices down 36%

Butler's ASU colleague, real-estate professor Karl Guntermann, in his repeat-sales index, reports that Scottsdale's home prices fell 36 percent from April 2006 to this past April. That is less than the decline in Tempe of 42 percent. Chandler's decline is 45 percent with Gilbert's at 47 percent.

John Rapasky, Counsel Mortgage Group president, said he is seeing some hopeful signs for a housing-market recovery even if there is some downward pressure on prices.

On conventional loans, lenders have cut the minimum down payment to 5 percent from 10 percent with private mortgage insurance.

"I think as much as you can use the lenders as a guide, after going through all this pain, they've decided to loosen up a bit," Rapasky said.

Buyers with good credit, assets, proof of income and a down payment are in a good position to buy, he added.


by Peter Corbett The Arizona Republic Aug. 3, 2010 12:00 AM



Scottsdale existing-home sales up 36%