McCormick Ranch Sales Update: June 2021

Summer is officially here. The temperatures will soon be reaching more than 110 degrees and there will be no escaping the heat. This is usually the start of the time of the year that real estate begins to cool off (maybe melt off?) but this year is still looking to be anything be normal.

Throughout all of the Phoenix valley (and even extending to the far reaches) we have been seeing incredible buyer demand. Homes are being purchased for 5-10% over the list price on a regular basis and sellers have complete control of everything from start to finish.

McCormick Ranch and Scottsdale have mirrored this. We are seeing multiple offers and homes often selling well above list price. This tends to be for homes that are fully remodeled and completely move in ready.

Case in point, in the last 18 months, we have seen the average single family home price go up by more than $300,000. This is just for McCormick Ranch and only considers single family homes. This represents a 45% gain over these 18 months (or around 28% per year). This is simply astounding.

Our market still relates to the fact that we have such huge population growth over a short period of time and a very limited amount of supply. Throughout Phoenix, many houses have been taken out of the supply chain due to regular rentals or short term rentals. And, we obviously have very little room to build houses here in central Scottsdale.

In a similar matter, price per square foot is up by a substantial amount. We're seeing 25-30% gains across the board over the prior 18 months (around 17% per year).

As we look at the number of sales, we're about as high as we have ever been (even looking over the prior many years). This time last year was very muted due to the initial effects of Covid. Since then, though, we have seen a substantial increase. I'm expecting our number of sales to drop over the next few months as there simply isn't enough inventory. As of this writing, there are only 25 active and available homes and 49 under contract. This isn't enough to have 70+ sales in a month.

So what happens from here? Anyone who tells you what to expect with 100% certainty is only selling smoke and mirrors. Real estate is just like the stock market where you can't predict anything and be completely sure of yourself.

However, I am expecting we will see continued gains throughout the rest of the year. It might be slightly more muted as most people really don't want to move during the summer. It's hot and miserable- we all know that! But there is still a lot of pent up demand and people looking for the right home. My best guess is that we will see another 5-10% gains for the remainder of this year and next year. I'm not expecting a major drop right now just because we are have such enormous population growth and this doesn't seem to be slowing down.

Only time will tell!

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Randy Arriola