Luxury housing is constantly driving the Arizona real estate market. However, with recent tariffs and the government shutdown, there’s a fear preventing many people from wanting to buy. While less competition hurts sellers, it also creates opportunities for those wanting to buy in the lower-luxury market. The less competition there is, the more likely you are to land your dream home.
Luxury housing is defined by price point and customization. While the definition has not changed, the price point has shifted due to inflation and supply-and-demand imbalances. Rebecca Hidalgo, the CEO/Designated Broker at Integrity All Stars Realty, says the price has almost doubled.
“The definition of luxury used to be over a million bucks, but that just doesn’t buy luxury anymore,” Hidalgo said. “You may be able to get something for that much in the far east or west, but in areas like Scottsdale, you have to spend at least $2 million.”
Despite the shift, she says now is the perfect time to buy that home, because there’s little competition.
“When demand is down for whatever reason, the opportunities are fantastic,” Hidalgo said. “Right now, the buyer is king. If tariffs and the shutdown go away, rates will go down, and sellers will take the throne.”
Nonetheless, if you are looking to enter the luxury market, there are a few things to keep in mind.
It’s easy to get excited and start touring homes as soon as you decide to buy but looking before you’re fully approved can backfire fast. Being fully approved makes you more likely to be taken seriously by a reputable real estate agent. It also lets you make a quick offer when you find the right home.
The market is comprised of several smaller markets, and they are not guaranteed to be in sync. Luxury homes generally range from $2 million and above. Once you hit a price point of over $4 million, depending on the location, you could be entering seller market territory.
David Newcombe, principal of MacLean Newcombe at Compass Real Estate, says that because the luxury market is hyperlocal, it’s not wise to follow national headlines or reports. Find out where you want to live. Not just in terms of the city, but also in what neighborhood you want to live in – and do your research. The market doesn’t just vary between cities; it can vary from neighborhood to neighborhood in the same city as well.
“Reports often come out saying the sky is falling, but luxury real estate is hyperlocal,” Newcombe said. “It’s important you choose the area you want to live in and find a qualified realtor to help you research on that area and price point.”
While researching the financial aspects is essential, you also need to make sure you end up in a neighborhood you will enjoy. It’s a good idea to drive around a bit, especially in the evening. See what it’s like at night and experience the neighborhood before committing to house hunting.
Newcombe says that since the majority of the luxury market is custom homes, it’s crucial to prioritize the lot first. A good lot depends on what you’re looking for, but in general terms, it needs to be somewhere quiet, away from the main street and gate.
“You want to choose somewhere you can imagine as your little garden of Eden,” Newcombe said. “Home is about relaxing. It should be private. If you walk into the backyard and can be seen and can’t landscape your way out of it, the lot will lose value.”
Once you’ve chosen a home and you’re ready to start closing out, it’s pivotal that you make yourself more appealing by making the contract as simple as possible. Even in this market, if it’s the right home and price point, it’ll sell within days.
“The simpler you make your contract, the stronger it will be,” Newcombe said. “All of those small dollar gains in the contract get in the way and cause sellers to pause. Will a thousand-dollar home warranty really make a difference on your dream home? Get the price right and you’ll get the home.”
Most importantly, though, it’s pivotal that you find a solid real estate agent and title company.
Escrow services are a requirement in Arizona and can only be managed by a licensed professional, typically a title company. Many people believe you have to go with the one the real estate agent or seller recommends to you, but that’s not the case.
Escrow is an account that acts as a mediator between the buyer and seller, holding them accountable for not breaching the contract and ensuring that all funds are disbursed appropriately. Because it plays such a significant role in managing the transaction, find an agency you can trust. Braydon Dennis, VP of Sales and Marketing at Great American Title Agency, says it’s pivotal you shop around for an experienced company.
“Make sure you do your research,” Dennis said. “Check online reviews for any complaints filed against the company. Look into how long they’ve been operating. Experience is crucial for a smooth transaction.”
He also says it’s a good idea to sign all documents in person. This reduces the risk of mistakes. When in person, you can ask immediate questions about documents and receive clarification from the escrow officer.
“In-person signing reduces the risk of errors or missing signatures, which can delay closing,” he said.
Hidalgo says the more experienced and well-known the realtor, the more likely they are to be trusted by the seller and get you the home of your dreams.
“Interview at least three different buying agents. Look for experience, if they’re well known, and make sure you get along with them,” Hidalgo said. “Name recognition makes it easier to win a bidding war. Sellers will go with good, reputable teams every time.”
Above all, though, she stresses the importance of not waiting to buy a house.
“Time is ticking,” Hidalgo said. “Things will shift, and we’re going to be back to multiple offers on every house. We’re transitioning back to a seller’s market. Don’t wait.”
