Arizona's Real Estate Luxury Market: Heating Up or Slowing Down?
Arizona's Leading Real Estate Developer, Vincent Fratantoni & his comments on the current Luxury Real Estate Market.
SCOTTSDALE, Ariz., June 13, 2022 /PRNewswire-PRWeb/ -- It's no surprise to anyone that Arizona's real estate market has reached historic price levels over the past few years. With growing demand in Arizona, it was only a matter of time for prices to shoot up.. but will they remain?
Arizona Real Estate Developer & Real Estate Agent Vincent Fratantoni says, "Arizona's luxury real estate market has seen several record breaking sales over the past few years. Low inventory levels and the growing need for homes for buyers has caused a home frenzy. This home frenzy has caused buyers to offer over list price, submit offers with no contingency's, and even allow sellers to stay rent free for several months after close so their offers stuck out against the others. I don't believe anyone was expecting that to happen once Covid lockdowns were first announced.."
Since 2012 there have been 62 closings over $7,300,000 (According to MLS). Out of those 62 closings, 47 of those closings have happened since 2020. All 6 of the highest sales in Arizona (homes over $20,000,000) have taken place in the last 2 ½ years. Fratantoni says, "Looking at the data and understanding that 47 of the highest sales ever in Arizona have taken place in the past 2 ½ years shows that more and more people are continuing to trust in that type of valuation for homes in Arizona. I believe this trend will continue as land in prominent areas of the valley is dwindling down which is causing buyers to either tear down existing homes or spend above market pricing on the remaining land. Higher levels of entry for new construction custom homes throughout the valley will continue to raise the prices for new construction sales."
It's no surprise that supply and demand has played a huge role throughout the valley over the past few years. Lumber reached records highs while chip shortages began to create issues on the manufacturing side of building materials. Fratantoni says, "Prior to Covid, placing appliance orders wasn't an issue as you'd receive them in a month or two, concrete orders could be placed the day before you needed it and pool equipment wasn't an issue getting. Now, waiting 12-14 months for appliances like Sub-Zero or Wolf is normal, concrete has restrictions for its subcontractors on how many yards they can get in a month and getting pool equipment has been extremely difficult. Having designed, built and sold the third most expensive home in Arizona for $21,500,000, I only see the construction delays getting worse before they get better. My company has had to adapt by purchasing longer lead time items sooner to avoid unnecessary delays for our clients."
The past few years in Arizona have been challenging not only for buyers looking to purchase but for the builders trying to build new homes to meet this demand. Is it only the beginning of this uptrend? Only time will tell.