At ADVANTA REAL ESTATE, we review the monthly sales number's to determine how the REAL ESTATE MARKET is performing as a whole and then we focus on specific REAL ESTATE SUB MARKETS. PARADISE VALLEY is a sub market for ADVANTA REAL ESTATE. We work with both, buyers and sellers. We try to stay on top of this ever changing market.
I've attached a few sales number's from the Cromford Report that demonstrates how the Paradise Valley market is doing. In a nutshell, the PARADISE VALLEY REAL ESTATE market is recovering well.
Looking at the first graph, active listings have dropped from a peak of 400 homes on the market to an average of 260 homes. As I've said before, it's all a matter of supply and demand. The lower the supply of homes, the more liklihood that the prices will increase. There are some caveat's but in general, this holds true - especially for a city like PARADISE VALLEY that is in demand from buyer's around the world.
Inventory levels have dropped dramatically. If you look at the next graph, you'll see that inventory has dropped from a average of 450 homes on the market to 250 homes on the market. The # of days of inventory remains on the higher side but it's getting improving from what it was just a year ago. On an annual basis, the average # of days on the market is at 253 days. While this may be high for the general real estate market, it's not a long time for Paradise Valley where the inventory of homes range in price be from $650,000 to $20 million. This large price stratification will skew the # of days of inventory towards the higher end.
Another indication of the supply of homes is absorption rate or the # of months of supply of homes. For example, if there are 100 available homes on the market and 10 homes sold last month, then there is a 10 months supply of homes. If you look at the graph below, the # of months of supply has dropped from a peak average of 16 months supply to 8.3 months supply - almost a 50% drop. Again, pricing stratification is effecting the supply levels so that the supply of homes is higher than a city with less stratification of home prices. Or, in other words, if we looked at the lower priced homes, the supply levels would be significantly lower than the higher priced homes.
Laslty, if we look at the sales volume, you'll see that buyer's are buying homes in Paradise Valley. It's a great town that's land locked, has very restrictive building ordinances and in high demand from wealthy buyer's from all over the world. If the PARADISE VALLEY REAL ESTATE MARKET is picking up, it means that the rest of the valley will follow. When this will happen, no one knows but I can tell you that in the market's I focus on, the homes are selling fast and it's turning into a seller's market.
Hope this information is helpful. At ADVANTA REAL ESTATE, we're working hard to stay on top of the PARADISE VALLEY REAL ESTATE MARKET. It's important for us to know what's happening in the market so that when we work with you to either buy or sell a home, we add maximum benefit to you.
If you have any quesions on this data or blog post, please e-mail us, leave a comment or call us. We're here to help you.
Best of luck,
ADVANTA REAL ESTATE