Arizona’s Luxury Real Estate Market Shaping Up To A Record Year
When a home in the Silverleaf community of Scottsdale, Arizona, sold for $24.1 million in September, it set a new record as the highest-priced home sale in the state’s history. Sitting on 17 acres, the 15,000-square-foot mansion has eight bedrooms, 10 bathrooms, an indoor basketball court, and a 7,500-square-foot guest house.
That sale broke the record set in November 2019, when Phoenix Suns owner Robert Sarver sold his 28,000-square-foot, seven-bedroom, 11-bathroom home in Cameldale Estates for $19.25 million. When that same property sold again in October 2020 for $20.9 million, it set another record—the highest-priced home sale ever in Paradise Valley.
Such transactions are looking less like outliers and more like a trend for Arizona’s luxury home market, where prices are skyrocketing along with sales activity. As COVID-19 reduces travel, keeps jobs and schools online, and brings college-age children back home, buyers are moving up to homes that offer more space and more amenities.
The residential luxury market in Maricopa County (the Phoenix-Mesa-Glendale metropolitan area) is “on fire,” says Russell Diehl, Owner/Designated Broker for Arizona Network Realty and the owner of ArizonaRealEstate.com. In the $1 million to $6 million price range, the number of sales is up 49% year-to-date through October compared to the same period last year. The dollar volume of those sales rose from $2.74 billion to $4.1 billion over the same period, according to the Arizona Regional Multiple Listing Service (ARMLS).
“What’s even more dramatic,” Diehl points out, is the growth over just the past three months. For the period from August to October, the number of home sales in the $1 million to $6 million range throughout Maricopa County was up 138% compared to the same period last year.
Scottsdale has been especially active, with the number of sales in the $3 million to $4 million range—the “hottest segment”—showing “a whopping 82% increase” this year through October over the same period in 2019, says Diehl. For the August to October period alone, the increase is 285%.
Launch Real Estate, the number one seller of homes over $1 million in Maricopa County, has seen a nearly 50% increase in sales year-to-date over the same period last year. The company’s sales volume for the month of October was double that of October 2019. Sean Zimmerman, president of Launch, calls it “the best market we’ve seen, maybe in history.”
And Launch’s larger homes have been selling fastest. Buyers know they’re going to put in a home gym or a yoga studio, or they’re going to have more family staying with them, says Zimmerman.
Camelot Homes, a Scottsdale-based luxury homebuilder, has seen a 26% increase in its dollar volume of sales through October compared to the same period last year. “It’s been phenomenal,” says Julie Hancock, Camelot’s managing director. “Because the resale market’s so strong, a lot of people are seeing it as an opportunity to really upgrade their house and their lifestyle while maintaining similar payments, because the interest rates are so low.”
In Camelot’s White Horse community in Scottsdale, all but two of the 50 buyers took the bonus room and guest casita options. Hancock says that in all their communities, extra space is “the number one thing people are looking for.”
Buyers are also moving quickly, wanting “homes that are already built and ready to go,” says Hancock. Camelot has sold out of its existing homes but is adding more, including a continuation of its White Horse community.
Though construction costs continue to rise, the current demand seems great enough to absorb them. Camelot has seen a 13% overall jump in material costs, including increases of 44% for lumber, 12% for drywall, 8% for roofing, and about 6% for trim carpentry. But these cost increases don’t seem to be slowing things down. If anything, they’re having the opposite effect, says Hancock. People want to buy quickly before construction costs go even higher.
About half of the demand Launch Real Estate sees for houses over $2 million is coming from out of state. Arizona routinely draws its share of Californians looking for markets where their dollar will buy more, but this year has also brought more buyers from Washington, Illinois, Colorado, New York, and Minnesota. Zimmerman points to Arizona’s stable economy, as well as its “diversity of industry and opportunity.”
“People are migrating to areas that are less dense, that are well planned, that have beautiful amenities and all of the things that Arizona offers,” says Hancock. She calls Arizona a “long-term play” and expects “nothing but positive growth” in the future.
In the meantime, since selling that $24.1 million Silverleaf home, Russ Lyon Sotheby’s International Realty has set another record for Arizona. The firm currently has the state’s most expensive listing: also in Silverleaf, the new 15,000-square-foot home at 21053 N. 110th Way is priced at $27.5 million.