PHOENIX — The housing market for most Arizonans can feel like it is moving in molasses. However, for homes well over $1,000,000, prices continue to go up.
“We are probably in the second best year in Phoenix history for the luxury market,” said senior housing analyst with The Cromford Report Tina Tamboer.
On the other hand, homes below $1 million stay on the market longer than they were during the pandemic.
“In one market you deal with affordability measures, what's the median income, what are the mortgage rates?" said Tamboer. "But then you got the luxury market, it’s less about mortgage rates, it's more about how portfolios are doing.”
The biggest difference between the markets is the impact of interest rates.
While rates have gone up to fight inflation, so has the potential monthly payment for prospective buyers.
However, the luxury market doesn't worry as much about getting a loan.
“When we get into this luxury space, a lot of people pay cash,” said Halpern Residential CEO at North&Co Trevor Halpern.
Halpern walked 12News through a new multi-million dollar Scottsdale home. The 6,800-square-foot home includes 14-foot ceilings, a pool, a sports court and a wine wall.
“It does feel like you are in the Biltmore, or a JW Marriott, or a luxury resort. It feels warm, inviting,” said Halpern.
Halpern said the sharpest increase in activity and price in the Valley has been in the market where homes are above $1.5 million.
Data from the Motley Fool shows Arizona gained more than 5,000 high-earners in one year. That ranked third in the country behind Florida and Texas.
Those high earners drive up demand in luxury areas.
So Halpern said builders are buying older homes on big lots, tearing them down, and building new mansions.
The 6,800-square-foot home shown off by Halpern would be the first of its kind in the nearby area.
If the home makes money, Halpern said it could inspire other builders to do similar things.
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