We’ve seen near panic in the traditional housing market, with nearly all metro areas reporting significant increases in prices, offers well over asking, and few homes for sale. And the luxury market for homes has been even more extreme.
For the first quarter of this year, sales of luxury homes were up 26%, compared to 15% for the core market. And prices for million dollar real estate was also up more than the traditional tract home neighborhood sales, 14% to 10%. That increase was 17.2% in the Phoenix area, according to Redfin.
That’s good news if you already own a North Scottsdale chateau, and either a regret or a call to action is you would like to.
Agents are also reporting that buyers are dropping what generally are regarded as core contingencies, like inspections and appraisals, considered dangerous in most transactions. And the all-cash crowd from California has been driving up prices and driving down sales windows.
Add to that equation the fact that the Phoenix area is one of the top areas in the country for population growth (first for the fifth year in a row), and most the the luxury real estate is in Scottsdale or Paradise Valley.
Fortunately, luxury home listings are up 19.3% compared to this time a year ago, compared to 9.1% for the middle of the market.
Homebuyers in this range have been affected by the changes in the business culture thanks to the COVID pandemic. For example, home offices that provide the opportunity and method for remote working also has been a highly requestyed feature. So have home gyms. Whether that remains high as the economy returns to whatever the new normal might be remains to be seen.
Million-Dollar Home Sales Outpace Those in Other Price Points