Pleasant Valley – Neighborhood Spotlight
Sometimes a single neighborhood can act as a microcosm for the city as a whole. Yes, this is contrary to my normal disclaimer about market conditions varying greatly from city to city and neighborhood to neighborhood. But hear me out..
Pleasant Valley is a medium sized subdivision in the northwest valley. I’d call it upper-middle class; the kind of homes which feel like luxury to those who aren’t used to such things, but which the truly affluent would turn their nose up at. Spacious homes (2,800 – 4,500 sqft), large lots, and the surrounding by mountain views help keep the neighborhood a desirable place to live.
The subdivision was built out in the early to mid 2000’s, far enough away from the hustle & bustle to feel tranquil, yet only a few minutes away from amenities and infrastructure.
OK – this is starting to sound like an advertisement – why am I bringing all this up? Because these facts show what the neighborhood has been through:
- Some homeowners bought before the price run-ups in 2004-2006.
- Most homeowners bought during the boom years.
- Prices went through the roof and have since been decimated.
- Many people lost their home.
- Through all this the neighborhood has remained a desirable location. (much the way Phoenix is still a destination city for people in other parts of the country.)
Let’s take a look at Pleasant Valley in detail, through the ups and downs, and see if we can extrapolate any information for the greater Phoenix area at large.
Number of Sales per Quarter (Red) and
Average Sales Price per Quarter (Blue)
The red line (# of sales) shows us an obvious seasonality – sales peak in Q2 and Q3, then dip in Q4 and Q1. This is true of Maricopa County as a whole, although it’s more pronounced in Pleasant Valley.
But unlike Maricopa County, this also shows us an upward trend through the boom and bust years. (I placed a marker on the chart to represent April, 2011 * 3, since the Q2 number is falsely shown as one month.) 2009 was a big sales year for the county, but it was not 50% bigger than 2005.
The blue line mirrors Maricopa County much more closely – a price run-up of about 150% from 2003 into 2006, then a slow decline through 2007, then a sharp drop-off in 2008. Prices today are slightly less than they were in 2003.
Here are the actual numbers (for my number crunchers out there.)
Now let’s take a look at distressed activity. MLS didn’t always require sellers to identify short sales and lender-owned property, so I’m using occupancy for the chart below.
Owner Occupied Sales (red) and Vacant Sales (blue)
Again the trend is similar to, but not exactly like, Maricopa County as a whole. More owner occupied sales early in the decade. More vacant sales in 2008 and 2009. Fairly even in 2010 and 2011.
Next I wonder how many of those owner occupied sales could still be distressed. I said before MLS didn’t require a short sale notification until a couple years ago, so let’s look at the recent data:
Hmmm. OK – so even though the owner occupied and vacant sales numbers were about even over the last couple of years, the owner occupied sales are heavily weighted with short sales. In 2010, there were 24 distressed sales compared with 10 non-distressed. And in Q1 2011 the numbers were 7 to 1 – wow!
Current Market Analysis
Looking at the historical numbers above, it’s pretty easy to think this is a neighborhood in trouble – a real buyer’s market. Prices are way down from their peaks, and bank/distressed activity dominates the market. Well, not so fast…
These are the homes which have sold since 1/1/2011.
- 12 sales in the last 120 days, an average of 3 sales per month.
- Avg CDOM (Cumulative Days On Market) hovers around 2 months.
- Avg Sold Price is very close to Avg List price – no big discounting going on recently.
- 1 Active listing. Read that again – 1 house is for sale. (and quite frankly it’s listed at a price so far above the market that it’s not really a listing – leaving 0 homes available to buy at today’s prices.)
- 7 Pending Sales – these are homes which have negotiated through the contract and are heading towards closing.
- 8 Active With Contingencies – these are homes which have offers on them but which are still negotiating &/or looking for backup offers.
If you count the Pending and AWC as “homes which have been for sale but which are no longer available”, and add them to the homes which have sold, here’s what you get:
- 28 homes have been available for sale this year.
- 27 homes have been bought.
- 1 home remains available – the one asking $200,000 above market price.
So now I ask – is it really a buyers’ market?
Kind of, but not really. If you wanted to buy a home in Pleasant Valley today, I can’t take you over there, show you all the available inventory, and ask you to take your pick of the litter – and then advise you to make a low-ball offer to some desperate seller. Not possible. (and not advisable).
But it’s not a sellers’ market either. Even though there are more buyers than sellers right now, sellers aren’t afforded the luxury of padding their price. The market is ruthlessly efficient right now; buyers will bid against each other for properties priced fairly, but will demand discounts from homes which are overpriced.
This is true for most of Phoenix right now.
Buyers can get great homes at great prices, but only when you compare those prices in a big-picture, historical context. Getting into Pleasant Valley at prices less than what the builder originally sold them for – that’s awesome! But don’t think you can walk into any listing and offer 70% of their asking price – not gonna happen.
Sellers can unload a home in a matter of days, if it’s in good condition and priced aggressively. In fact, they might even start a bidding war among multiple buyers. But don’t think it’s a sellers’ market and you can ask 5% more than the last home sold for – that’s not gonna happen either.
We’re in a strange market right now. It’s been this way for quite awhile, and it’ll be this way for longer than we’d like. Buyers get frustrated because they have to compete so hard to buy the home they really want. Sellers get frustrated because there are so many buyers, but none of them will pay what the seller really wants to receive.
Buyers – plan on spending a little more than you expected.
Sellers – plan on receiving a little less than you expected.
Once we get realistic expectations in place, the market isn’t so bad – there are plenty of homes selling. No need to be frustrated, right?
Your trying to keep frustration at bay Realtor,