Taking the Uber-Luxury Market Pulse
That pulse is strong, not robust, but offers a healthy prognosis.
I define uber-luxury homes as those closing at $10 million and up. This is somewhat arbitrary, as every real estate market is unique; the dollar threshold for Beverly Hills and Malibu, California, as well as Manhattan and Long Island, New York, would be higher; other areas throughout the country with premium homes would be lower.
Of course, our global Private Client Group team and other local Russ Lyon|Sotheby’s International Realty experts in the Paradise Valley and Scottsdale markets sell many luxury homes that close below $10 million. Uber-luxury, however, is the apex of local real estate; often significant sales news stories, they offer qualified buyers the finest locations, acreage, views, architecture, best build quality plus other distinct assets. They are dream homes for everyone and the realities of the fortunate few.
For the most part, locally these Valley homes are in the high-demand uber zip codes: 85253, Paradise Valley, the state’s highest per-capita-income community, and 85255, magnificent Silverleaf. Other areas often represented include Desert Mountain (85262), the seven-golf-course gated community in the high desert of North Scottsdale; Arcadia, the historic citrus community in Phoenix and Scottsdale (85018 and 85251) with its engaging range of historic adobe, ranch farm and contemporary styles; and Sedona, 90 miles north of the Valley in the world-famous red rocks; and Tucson.
During the last six months, nine Valley homes have exceeded $10 million at close, with one just below that threshold at $9.5 million at high-demand, historic Casa Blanca in Paradise Valley (85253). That’s soft compared with 2022, when we were in a Covid 19-generated seller’s market for uber-luxury homes. Sellers were receiving above asking price for their Valley luxury homes, which offered particularly desirable assets during the pandemic such as larger livable space and land.
Now, six properties are under contract or pending in the Valley, with one at $30-plus million and two others above $20 million, all in Paradise Valley (85253). Following the trend, the other three listings are in Silverleaf (85255). This is still softer than past few years’ activity.
At the same time, ARMLS offers just a little more than 80 listings above $10 million, led by a $75-million Cullum Homes residence, whose asking price soars to the Beverly Hills/ Malibu stratosphere. So far in 2024, we experienced five property owners above the $10-million asking price canceling their listings on ARMLS; perhaps these sellers will restructure their strategy and re-enter the market competitively. We have shifted to a buyer’s market for these ultra-luxury homes following a seller’s market during the pandemic years.
At the current sell rate at perhaps as many as two dozen uber homes annually sold in Arizona, sellers and their agents are confronted with more than a three-year inventory they will have to consider in terms of their wait times and possible asking prices, arrange creative terms or enhanced marketing adjustments.
Good, not Great
It’s still a good market for uber luxury but not a great one. People are just spending less on high-end real estate now. This includes undeveloped sections in thousands of continuous acres of raw land, which are not moving.
In contrast, individual lots are selling; these area even more appealing with entitlements and architectural plans in place. Developers may be leery based on the soft uber-luxury homes market, high prices for food and gas, interest rates and the political uncertainties of two wars off shore and an election year here; the result is a long lead time for developing acreage. Lots, however, provide builders and owners with more delivery assurance.
Sellers should beware of flashy results on social media that may be misreading the market.
One of the positives for the resell market is that out-of-the-ground uber-luxury homes are costing more and more to build. In the last two years, the average cost per square foot has risen from about $800 to almost $1,200. That increase in materials, labor and other building costs will continue based on the trends. This potentially makes the existing uber-luxury homes listings more worthwhile to buyers, so long as they are not too style specific and offer equal or near pedigree for quality materials and superb workmanship.
In addition, the Valley continues to offer an attractive résumé to many groups, including corporations and wealthy people: an abundance of 300 days of sunshine and outdoor activities; less real estate tax; a robust economy with low unemployment; a booming construction industry; and multiple cultural/entertainment/sports venues. Over the long term, I don’t see the uber-luxury market slowing down; in fact, I expect even many more uber-luxury inventory with new amenities for collectors of cars, wine and art.
Special Homes and Amenities Get Special Interest
To sell in this market, having a very special home is advantageous. This includes an experienced broker or team willing to expend the effort required to realistically market your home in a competitive market. Let’s look at some of the factors that have made homes that closed in the last six months particularly desirable.
For instance, the top seller in the last six months, at $13.85 million, is a two-level Mediterranean estate in Silverleaf coordinated by a superlative team of architect Luis Antonio Bonilla and interior designer Jamie Rose; it has incomparable views of the McDowell Mountains, Scottsdale and Phoenix city lights and sunsets. Bonilla led another highly talented team on an uber-luxury home. At $12.65 million, this estate on a 3.7-acre view lot in the Upper Canyon of Silverleaf also included team members Argue Custom Homes and interior designer Claire Ownby.
One-off and newly built are always desirable. A Paradise Valley home, built in 2022, sold at $13 million, without being occupied; it’s on the last vacant lot in gate-guarded Finisterre. The very accomplished J.M. Wall Development finished this on a view lot. The entertainer’s and car lover’s dream home includes a 700-bottle climate-controlled wine wall and a four-car air-conditioned and heated garage capable of stacking cars and a gated auto court for guests.
And, at $12 million, a Contemporary-style Desert Mountain home immediately sets itself apart. You literally feel like you are on top of the world on an unobstructed, elevated hillside lot, high above the second green on the private Chiricahua Golf Course. In this Dark Sky community, the stars and city lights are spectacular.
Featuring high-level quality finishes and impeccable style, the home exemplifies the Arizona outdoor lifestyle with automatic retractable glass doors that seamlessly open to the patio. The indoor/outdoor room has a built-in BBQ and pizza oven for the owners’ daily lifestyle and for entertaining. The very private primary suite offers mountain views for night serenity and morning welcome; two very ample custom closets, two waterfall vanities and an open-air shower are also providing the new owners lifestyle riches. It’s a jewel box.
Frank Aazami (License #SA581280000), Brand Ambassador, is the principal at the Private Client Group, Russ Lyon | Sotheby’s International in its downtown Scottsdale office. To book a visit, call him at 480.266 0240, email Frank@pcgAgents.com or see www.PCGSIR.com and PCGagents.com. These figures are current as of March 22, 2024. David M. Brown assisted in this article.
