Luxury Homes

Paradise Valley Prices Surge 27%

In the last couple of months we’ve seen plenty of examples where prices have leveled off, or even decreased a bit, at the higher ends of the price range. “NOT SO FAST!” exclaims Paradise Valley, where the Median Sales Price rose to $1,840,000 in the 2nd Quarter this year, up 27% from the $1,442,500 median sales price in Q2 2018.

Oddly enough the median sales price had been down slightly over the prior 2 years, so the longer-term appreciation rate of 25% since Q2 2016, while still robust, is not quite as mercurial.

-

- Chris Butterworth

-

Simple MLS Charts is supported by readers like you. If you find these charts useful, please consider becoming a patron with a small monthly pledge on Patreon.

* All chart data represents single-family detached homes only. Information is believed accurate but not guaranteed.

 

Median Price of Luxury Homes Remains Flat

This is a very deceiving chart. We know that prices have risen over the last 3 years, and we know that the luxury market has grown during that time as well. So why hasn’t the median price increased?

It’s because of these two reasons that the median price hasn’t changed.

Rising Prices: Yes, a 20% increase means that $2,000,000 house is now worth $2,400,000. And that $1,500,000 home would be priced at $1,800,000. And of course, the $1,000,000 home increases to $1,200,000.

Growing Market: This 20% appreciation also means the $900,000 home is now worth $1,080,000, and the $835,000 home is worth $1,002,000 today. These “lower priced” luxury homes weren’t part of the million-dollar market in prior years.

Since the Median Sales Price is the middle price, and there are homes priced at $1,000,000 each year that weren’t there the year before, the lower part of the pricing scale keeps replenishing. The fact that the higher-priced homes are reaching ever higher prices doesn’t seem to matter.

Even though the high end keeps getting higher, and there’s a big difference between a million-dollar home and a three-million-dollar home, the Median Sales Price for all homes sold above $1,000,000 has remained relatively flat over the years.

-

- Chris Butterworth

-

Simple MLS Charts is supported by readers like you. If you find these charts useful, please consider becoming a patron with a small monthly pledge on Patreon.

* All chart data represents single-family detached homes only. Information is believed accurate but not guaranteed.

 

Number of Luxury Sales Down in 1st Qtr

This chart is interesting on a number of fronts:

  • Million-dollar home sales were down in the first quarter compared with Q1 2018. This is not a good sign for the luxury market, especially since we are looking at quarterly figures - which usually show less variance than monthly numbers, so this is less likely to just be a “blip.”

  • A couple months ago I showed a chart (stepping up to luxury) that compared annual numbers, and 2018 had the highest luxury volume ever, followed closely by 2005 and then 2006. Yet when comparing sales in the 1st quarter, 2006 was the highest (by 10%), followed by 2007, 2018, and 2019, before finally getting to 2005. This shows how much things can change in the 9 months following any given quarter. (ie: we all know how 2005-2006 bubble ended…)

  • 2 major factors can affect the number of luxury sales: 1) The number of high net worth people wanting to buy homes in Maricopa County, and 2) The pricing movement of the existing homes for sale. If homes are trending from $975,000 towards $1,025,000, then we’ll have more luxury sales. The reverse is also true.

We’ll check back on the luxury market in a couple months to see if this trend continues.

-

- Chris Butterworth

-

Simple MLS Charts is supported by readers like you. If you find these charts useful, please consider becoming a patron with a small monthly pledge on Patreon.

* All chart data represents single-family detached homes only. Information is believed accurate but not guaranteed.

 

Large Lot Sizes in Paradise Valley

When we look at a typical suburban house - most neighborhoods from Scottsdale to Goodyear and Surprise to Gilbert - we tend to think any home with a 10,000 sqft lot has plenty of space. “HA!”, says Paradise Valley - where only 8% of all homes sold in the last 4 years had lots that tiny.

More than 60% of the homes sold in Paradise Valley sat on lots larger than 1 acre. A full 85% were larger than a half-acre.

Captain Obvious would point out “Luxury requires space. And money.”

-

- Chris Butterworth

-

Simple MLS Charts is supported by readers like you. If you find these charts useful, please consider becoming a patron with a small monthly pledge on Patreon.

* All chart data represents single-family detached homes only. Information is believed accurate but not guaranteed.

 

Stepping up to Luxury

2018 was a big year for the luxury market. (Homes sold for > $1,000,000.)

There were more million-dollar homes sold in 2018 (1,793) in Maricopa County than in any other year, ever! (There were 1,783 million-dollar home sales in 2005, which ranks a close 2nd.)

1,793 luxury homes in 2018 represented a 27% increase over 2017’s 1,414 number, which is the largest percentage increase YoY since 2005. (fyi - 2005 was up 87% over 2004’s 956 number - that was a crazy-market time.)

This is an interesting chart to think about. In order for the number to increase, we need either A) prices to increase, B) more people wanting and willing to spend $1,000,000 on a house, or C) both A and B. And judging by the chart, B hasn’t been a problem. The question for 2019 will be whether prices continue to rise, so that those homes at $950,000 last year become $1,000,000 this year…

-

- Chris Butterworth

-

Simple MLS Charts is supported by readers like you. If you find these charts useful, please consider becoming a patron with a small monthly pledge on Patreon.

* All chart data represents single-family detached homes only. Information is believed accurate but not guaranteed.