Scottsdale housing market: Not just for snowbirds anymore
Historically, retirees have always put Scottsdale high on their list of destinations when looking to take advantage of lower home prices, larger lots, agreeable weather and low cost of living.
But the Scottsdale housing market, and Arizona as a whole, has seen an enormous uptick in out-of-state movers in the past 14 months — when the COVID-19 pandemic began spreading across the country, ultimately allowing people to work from home and seek larger, more cost-effective lots to live on.
Over the past 10 years, Arizona has enjoyed the ninth-largest population increase in the past 10 years, up 11.8% from 2010, per a recent U.S. Census report. In 2020, approximately 20% of all Americans moved — and Arizona was the seventh most-popular destination of those movers.
The proof is in the home prices, which have shot up in Arizona since the beginning of 2020. Per Realtor.com, the median home listing price in the Scottsdale housing market is currently $699,900 — a 12% rise year over year, and about $320 per square foot, on average. Listing prices hit an average of $725,000 in September 2020 — the highest in more than two years.
Sellers know they can ask a lot for their homes because the demand is “the craziest it’s ever been,” said John Diaz, a broker with MyHomeGroup in Arizona.
“A lot of people list their home as ‘Coming Soon’ on Monday, go live on Friday, consider all their offers Sunday, and the house is under contract by Sunday evening,” Diaz said. “And in that timeframe they’ll get 12 to 15 offers, at least.”
Diaz said that, on average, 250 people are relocating to Scottsdale and Maricopa County a day, and inventory just can’t keep up.
“People are moving here from California, Colorado, Illinois, which historically always happens down here, but not at a rate like this,” he said. “COVID just accelerated everything.”
Such has been the case for many “secondary” markets throughout the country, as many realize they can live anywhere and still do their job remotely. That has caused a boom in smaller cities that offer larger homes for less cash, such as Pueblo, Colorado, Kingston, New York, Bay City, Michigan, and all over Idaho.
The Scottsdale housing market, it appears, has joined the list of popular destinations, and even the heat isn’t scaring people off, according to local Realtors.
“Do we have a couple of months out of the year where it can get to 115 degrees? Sure. But we’re learning that people much prefer that to the snow and cold,” said Adrianne Lynch, real estate agent at Scottsdale’s The Lynch Team at Conway Real Estate. “And the other seven months out of the year, we get pretty fantastic weather. So, no, the heat isn’t an issue at all. We’ve had people flooding this market for over a year now.”
Increased affordability is causing luxury homes to sell at a historic pace. In the past 12 months, the number homes sold that were valued at $3 million or more increased 130%, Lynch said.
“I’ve seen people with four or five properties in California sell all of them, then use the money to buy something really big out here,” she said. “That’s not uncommon at all. It’s much cheaper to live here. We have one of the lowest tax rates in the country — what you pay for a year out here, you pay that in one month in some states.”
Scottsdale is also an emerging tech market, with companies GoDaddy, Yelp, Paypal, Indeed.com and Paradigm Tech all opening offices downtown.
“This is a great town for businesses, including small businesses and entrepreneurs,” Lynch said.
Like in most of the country, home builders in the Scottsdale housing market are struggling to keep up with demand, and are hindered by the high cost of lumber and building materials. A recent Redfin report said it’s becoming commonplace for builders to be booked six months to a one year in advance, and that’s certainly the case in Arizona, according to local contractors.
“There’s quite a bit of supply issues, but we’re just trying to work through it,” said Sean Bonini with Bella Legacy Custom Homes LLC. “We’ve started ordering materials earlier rather than later — we don’t have the luxury to pick things up last minute. Land is at a premium especially in North Scottsdale where a ton of people are moving.”
Bonini said his company is “lucky enough” to have enough workers to move forward with jobs, but that the company as a whole is playing it safe when setting expectations.
“We’re giving ourselves plenty of time to get things done,” he said. “It’s been a lot of adjusting. If a job takes 9 to 10 months, we’re saying 10 to 12 or 12 to 14 instead.”
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