This week, real estate sales consultant Will Behrens of The Jason Mitchell Group gives his expert real estate advice the state of the luxury real estate market.
Arcadia has been the top area for new luxury home building since the housing market began to rebound in 2011. For the past 7 years or so, new home starts and high-end remodels have been exploding in Arcadia Proper and the surrounding area to the south and west. Land values and property prices have outpaced the rest of the Valley. While the market in Arcadia Proper is still extremely strong, we have seen some weakening in the market at the top end. Things began to shift about halfway into 2017. Home’s priced over $1 Million are starting to see longer sales cycles and multiple price drops before they are sold. There are a couple of major factors that are driving this shift.
The continued gentrification of the “Lower Arcadia” area doesn’t show any signs of slowing down. New commercial development/remodeling is keeping pace with home building. Most new build opportunities in the area start in the mid $700s, but $1MM+ home listings are starting to pop up like weeds. Streets that were considered sketchy only a couple of years ago are filling with young families that feel safe. Buyer’s don’t feel the need to pay the premium to move inside of the Arcadia Proper border, when they can invest those dollars into a newer or larger home just a few streets away.
The other major factor contributing to the plateauing of home values in Arcadia is the re-ignition of new home development in Paradise Valley. PV home values have risen over the past few years, but not nearly at the pace of Arcadia. Buyers who want luxury homes are feeling the pinch of inflated pricing in Arcadia and have been looking to PV for land that is cheaper by comparison, and has fewer building restrictions.
While Arcadia Proper is still extremely desirable, we may have to wait a bit for the rest of the market to catch up before we see significant value increases.
Will Behrens is a top-producing agent for The Jason Mitchell Group at My Home Group. He specializes in the Arcadia, Paradise Valley, and Scottsdale areas. If you have questions about the best way to market your home in this shifting market, he can be reached at 480.708.5151.