Phoenix was named a top luxury real estate market to watch in a new report by Coldwell Banker Global Luxury.
Phoenix was identified along with Denver and Dallas as secondary markets on the rise in the new report, called "The Report: 2021 Global Luxury Market Insights."
Chris Karas — who recently sold two luxury homes in Paradise Valley for $2.8 million and $3.7 million — said the luxury real estate market has been focused on Paradise Valley and Scottsdale for many years.
While those markets continue to strive, the founder of The Karas Group and co-founder of Launch Real Estate said he's seeing the city of Phoenix taking off, too.
"Phoenix is in high demand and performing at a level I have never seen before in the history of Arizona," said Karas, who represented the buyer of a six bedroom home in Phoenix for $3.5 million in January. That 8,048-square-foot home at 6035 N. Central Ave. was built in 1948.
"With low inventory and record-setting price points, I find savvy buyers are not letting homes get away," Karas said. "Quick closings with cash offers are very common in today's market. Also, multiple offers or offers over the seller's asking price has become the new normal."
Out-of-state buyers
Many of his buyers are coming from all across the nation.
"Homes are selling faster than ever at top dollar," he said. "Plus, with the relocation of many major national and international companies, Phoenix has become the hottest market in the entire country and it appears this will continue for some time."
Phoenix is home to 36 residential historic districts, said Aaron Carter, associate broker with CarterMosier Group at HomeSmart.
"These neighborhoods are designated with Historic Preservation overlay zoning," he said.
"The homes in these neighborhoods are bare, unique and architecturally significant," Carter said. "The properties are located in the central core and near downtown arts and culture, and therefore are highly desirable. Their scarcity also makes them increase in value over time because the city of Phoenix is not adding any new historic districts."
In comparison, Tempe has four designated historic districts, while Scottsdale has none, he said.
"Neighborhoods such as Arcadia Proper, Arcadia Lite, Biltmore and North Central Phoenix offer properties with large lots that are over 10,000 square feet," Carter said. "Properties in the central core offer exclusive proximity to the money belt, which is Central and Camelback roads."
The Institute for Luxury Home Marketing identified a luxury benchmark price of $600,000 in Phoenix, compared with $1.1 million for Scottsdale.
Carter said he's seeing price points increasing in the Phoenix luxury market.
For example, a 3,168-square-foot home in North Central Phoenix sold for $928,000 in January after selling for $720,000 in May 2017.
A single-family home between Seventh Street and Seventh Avenue that sold in the mid $700,000s three years ago is now selling in the mid $900,000s, he said.
In the 85018 ZIP code, 37 single-family detached homes sold for an average $1.083 million between January and March of 2017. During that same period in 2019, 55 homes sold for an average $1.731 million, Carter said.
Click through the gallery to see why Phoenix was named a secondary market on the rise:
Coldwell Banker's new luxury report names Phoenix a top luxury market
The in-depth analysis of emerging luxury markets and buyers was issued in conjunction with Coldwell Banker Real Estate LLC, a Realogy (NYSE: RLGY) brand. Included in the report are top performing luxury markets of 2020 and those to watch in 2021.
The report found the top preferences expected to have staying power over the next five years include: the home office (27.5%), demand for a second home (22.5%), and the desire for single-family detached homes (22.5%).
While Phoenix is not one of the top 10 wealthiest metro markets in the U.S., its income per capita is also on the rise.
Greg Hollman, president of Coldwell Banker Realty Arizona, said the growing Phoenix luxury market is very strong.
"While Paradise Valley and Scottsdale may be widely known as luxury markets, the city of Phoenix luxury market has exceeded all expectations," Hollman said. "With many people relocating to the area, Phoenix is a highly desired second home destination with its world-class museums, restaurants, entertainment and outdoor activities, not to mention the beautiful weather."
For a closer look at the 131-page report, click here.
