Jan 16 2016 Market Update

Jan 16 2016 Market Update

January 14 - A question that comes up regularly is "what is the most expensive house that has ever sold in Greater Phoenix?"

This is harder to answer than it sounds. The sale of very expensive new custom homes is often recorded differently from most new homes. The home buyer tends to acquire the vacant lot before the home is built. We know the price paid for the lot because an affidavit of value is recorded along with the deed. But this also means there is no recording for the home itself and no price becomes available to the public - it is a private contract between the developer and the home owner. Only when the home becomes an arms-length re-sale do we get a good look at a price.

We can easily see the highest price paid for a closed listing through ARMLS. The answer is $12,500,000 - for 6902 E Grapevine Close in Cave Creek in 2000. This ranch property claims over 10,000 sq ft of living space on 225 acres. Since a lot of the value is in the land, which includes 8 different parcels, it is hard to determine what the home itself sold for, but it is probably less than $10,000,000.

There have been a few sales of higher amounts outside of the MLS. The same home in Cave Creek changed hands for $15,500,000 in 2014. The highest price seen recorded for a single family home is $14,000,000 for 8040 N Mohave Rd in Paradise Valley during 2008. It is probably worth much less than that today, because luxury home prices were still peaking in 2008.

The highest assessed value for a home in Maricopa County is for the home of Robert Sarver, owner of the Phoenix Suns.  It is currently assessed at $16,735,800.  Assessed value is usually supposed to be roughly 75% to 80% of market value, so we can assume that the assessor thinks the home is worth at least $21 million.  The address is 5710 N Yucca Rd, Paradise Valley and according to the assessor it has 28,229 sq ft of living area built in 2009, a 2,200 sq ft pool and 5 acres of land. It has never appeared in the MLS files and never changed hands with an affidavit of value. It was vacant land in 2005 and the lot sold for $6,200,000 cash at that time.

There are currently 8 active listings that aspire to set a new record for the highest sales price ever seen in Greater Phoenix through the MLS. The highest asking price is currently $32,000,000. This is not the highest we have ever seen. Indeed there have been 85 listings with their original list price over $32,000,000. However almost all of those are typing mistakes by the listing agents.

January 13 - When we compare the number of single family active listings (excluding UCB & CCBS) with a year ago, segmented by price range, we get the following chart:

Image title

Here we see clearly that luxury home buyers have quite a bit more choice than last year. In fact from $400,000 upwards there are more homes for sale. Yet the overall supply is down because supply below $275,000 is so weak. Last year there was already a shortage of affordable homes, so the situation has worsened for buyers, which is obviously good news for sellers.

Sellers of homes over $400,000 need to be aware that news of short supply does not apply to them. They have more competition from other sellers than they had a year ago.

Dave Zajdzinski Headshot
Phone: 480-332-6468
Dated: January 16th 2016
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