Luxury Homes

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.

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- Chris Butterworth

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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.”

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- Chris Butterworth

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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…

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- Chris Butterworth

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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.

 

Is there softness in the Cave Creek market?

Last month’s highest-priced home sale in Cave Creek of $985,000 was the first month in almost two years that the highest price home was less than $1,000,000. The highest-priced home was $695,000 in Feb ‘17, but every month since then has been over a million dollars, including 7 months over $1.5 million.

Was this just an inevitable statistical anomaly, or are we seeing the first signs of softness in the market? It’s too early to tell, but we’ll keep our eyes on it in the coming months.

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- Chris Butterworth

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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.

 

Luxury Sales Volume is Up

For clarification, let’s first define the Luxury Markets:

  • Homes sold at or above $1,000,000.

  • The cities where these sales makes up about 10% or more of the total market.

Yes - Phoenix, Gilbert, Mesa, Chandler (and possibly Peoria) have more million-dollar sales than Carefree, but those luxury sales are a fraction of a percentage of the overall market. They are not “luxury market cities” - at least not in my opinion, and I’m the one making the chart!

Now that that’s out of the way, we can talk about the chart:

YTD through October, there have been 24% more million-dollar homes sold than last year, and 43% more than 2 years ago. Wow!

Part of this is because prices have been increasing; homes that were in the $900,000-range last year are now being priced at $1,000,000. But part of this is also because more people are willing and able to spend/invest that much money in their house.

I don’t want to sound pessimistic and bearish, but what’s the upward limit on luxury homes in the Greater Phoenix area, and will this rising tide continue to lift all boats?

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- Chris Butterworth

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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.