AZ Republic Condo Statistics - Helpful or Misleading?
According to the Arizona Republic’s Real Estate Report, Scottsdale condo sales have enjoyed a 5.2% rise in 2006 compared to the year before, based on median sales price. Is the condo market healthy according to these statistics, or are we being manipulated by an outdated set of meaningless statistical compilations?
Let’s compare apples-to-apples: price per square foot at one condo community, let’s say, The Venetian in Scottsdale Ranch. And let’s also pull the latest statistics and compare to a period one year ago. To get a meaningful number of sales, I pulled sales from January 1 of this year until today: 2 1/2 months and 4 sales. And let’s compare to the beginning of 2006 at the same period. Price per square foot of sold units this year: $187.13. Last year, $208.33 with 17 sales. That would be about a 10% DROP in price.
Not all communities had quite a large drop - Gainey Ranch lost less than 1% under this same formula. Grayhawk condos had little less than 1% drop.
My take is that the Republic wasn’t wrong, just too big-picture. Unfortunately, too many people will take away the wrong message: “the condo market went up - that means my condo went up”, or “The Scottsdale market is still a hot market for investors.” Please, don’t jump in without some careful analysis. The condo market is fraught with dangers for a buyer or investor with a short time horizon. You can buy now, but buy right and hang on for more than 2 years.
Based on information from the Arizona Regional Multiple Listing Service for the period 1/1/2006 through 3/12/2007.