The luxury real estate market is on the mend.
On November 9th Mike Orr of ASU / Cromford report commented that luxury market is picking up nicely after a slow summer.
“There were 71 closed ARMLS sales during October for Greater Phoenix homes listed over $1,000,000. This compares well with only 49 for October 2011, 49 for October 2010, 65 for October 2009 and 55 for October 2008. Listings under contract (pending and AWC) are also on the rise for homes priced over $1,000,000, This morning we had 148, far more than the 105 we saw on November 9, 2011. Of these 148, 117 were normal listings, whereas we had only 69 one year ago.”
My Analysis
Luxury is definitely starting to pick up. Where luxury for mean means homes listed at over $1,000,000. As always location is extremely important. Classic zip codes like 85253, 85255 are firming up faster than what I like to call more creative areas.
Median price for Paradise Valley in 2011 was $1,570,000 based on 230 closings. Average sold price was $1,792,048. Average price per square foot was $299.
So far this year median sales price has been $1,600,000. There have been 2 sales over $5,000,000 and 20 sales of $3,000,000 or higher. Average sales price has been 1,853,927 with the average price per square foot achieved being $315. These numbers come from 197 total closings.
So if there are 33 more sales closed this year which I predict will be the case all of the metrics are up. Median price, average price, total number of sales, average price per square foot. Everything is looking up.
Total sold volume in 2011 was $412,171,114. So far this year total sales are $365,223,649. My prediction is this number will come in right around the same level.
Long term Projections
In 2007 the average price per square foot achieved on million dollar home sales was $471. I think it’s going to be a while before we reach that number again but there have been three sales that really show premium prices can come back. One at $916 per square foot and two sales over $600 per square foot. It’s my view that prices per square foot will gradually climb back towards the 400’s.
If that is the case now could be a good time to consider buying a luxury property. Especially if you are locking a million dollar loan at 4%.