Scottsdale Homes for Sale – Cup Theory 2.0 -Where are Prices Headed
10 Red and 3 blue cups sit on table – Cup Theory 2.0!
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What is Cup Theory?
Well, we had Cup Theory 1.0 last year, in what was it…March 2011…what is it now, March 2012! So a year ago we did Cup Theory 1.0 and we made a prediction (about Scottsdale Real Estate. And unfortunately, we’re here to admit that we were wrong.
We were way wrong…we were off by 2%.
You know what we said? We said that because there were less fire sales or short sales in Phoenix, Scottsdale Homes for Sale and North Scottsdale Homes for Sale, which is what the red cups are representing, than there are regular sales (blue cups) and there would be more regular sales added to the mix that would bring up the average price point 12%.
So what your saying is from 2011 to 2012 we predicted that there would be less sales of distressed properties, therefore prices would rise by 10%?
Twelve. I said twelve.
Oh, and what happened?
It only rose 10%. We were 2% off.
Ok. So, can you tell me what CNN, Money Magazine, and Fortune Magazine, what they predicted?
Oh, they said that it would DECREASE, over 10%.
Ashley, did you just tell me they were of by 200%?
So in reality, I don’t feel so bad about being off 2%, do you? At least we hit the direction right. They said it was going down, we said it was going to go up. Bottom line is we were pretty darn close.
Alright, so with that said, last year we told you that there was going to be more Phoenix Scottsdale Foreclosures in Phoenix, Scottsdale Real Estate so this is representative of last year in March (Jeff points out the cups lined up). What percentage of distressed properties and what percentage of regular sales are happening (10 red cups for showing 70% distressed, 3 blue cups for 30% regular sales).
So let’s show them what is going on right now.
Ok, so last year in March we had about 30% regular sales, and about 70%, Phoenix Scottsdale fire sales, Phoenix Scottsdale bank owned, Phoenix Scottsdale short sale properties.
Now, those numbers have changed a bit, and we’ve got, well, 50/50 regular North Scottsdale Homes for Sale to Phoenix Scottsdale bank owned, Phoenix Scottsdale short sale properties.
We have basically an equal amount of regular sales to short sales at this point.
Ok, so what we’re seeing is that if you impact inventory, that a couple of months down the road it impacts sales.
So, Ash, what are we predicting for next year?
We’re predicting it’s going to look more like this for Cup Theory 3.0…(arranges stacks to 11 blue cups and 2 red).
What does this mean? It means prices are going to go up even further.
That’s exactly right, so what’s your number?
Last year you were pretty close.
I’m going to go out on a limb and say…you know what I’m not going to throw out a number I’m just going to say it’s going to be not enough to even talk about. There’s not going to be enough short sales and foreclosures on the market that we’re even going to want to talk about because it will be pretty much a mute point then.
Ok I’ll go out on a limb. I think we’re going to see 15-20% Scottsdale Home for sale appreciation -( actually 25% for the entire valley) from this year to next year. Because what we’re starting to see is extreme low supply, and extreme high demand.
We sure are. Alright, Cup Theory 2.0, we’ll see you next time.