Q&A with Aazami Associates at Russ Lyon Sotheby’s International Realty
By Terrance Thornton | Digital Free Press
Financial markets across the globe are coming to grips with myriad implications of the Federal Reserve’s June 15 decision to raise interest rates by 0.75% — which experts say is an attempt to stave off more negative inflation rates lowering the value of the American dollar.
Here in the Valley of the Sun, there is no marketplace more acute to the changing in macroeconomic trends than in luxury real estate.
Founded in 1976, Russ Lyon Sotheby’s International Realty provides independent brokerages like Frank Aazami at Aazami Associates, which is based in Scottsdale, a marketing and referral partnership for luxury listings.
The Arizona Digital Free Press reached out to Mr. Aazami to better understand what economic factors are paramount as the Phoenix luxury housing marketplace comes to grips with the new realities presented by a rise in federal interest rates.
Mr. Aazami offered the Arizona Digital Press — and our readers — insights into what changes up-to-date news could have in the local luxury real estate market:
•Given the news yesterday, can you tell me the state of economic affairs in the luxury real estate markets here in the Valley?
Of course, lots in the Town of Paradise Valley have tripled in price since the last economic downturn, and I would point out that when they are offered shovel ready with a full set of plans and permits their value automatically increases by an average of 30%. Some of those we have owned never even make it to the market because a shovel-ready project in Town of Paradise Valley is very valuable.
I recall our 54th and McDonald lot, or our Casa Blanca one. The value built over time as one needs to invest to create, tweak and obtain the permits. We call it entitlement work, which includes things like site preparations, reconnecting and or upgrading utilities, identifying setbacks, storm, and drainage studies. But yesterday was a distressing day for everyone. It was a hard day for our clientele who purchased and disposed their real estate due to bond, stocks and energies values changing. However, sellers who are sincere and will consider reasonable offers are selling their homes.
•What do you see happening next in the luxury housing marketplace here in the Phoenix metropolitan area?
We are forecasting another supply-and-demand issue in the luxury market sector, there are simply too many listings over $12 million. And as the market shifts, we will be competing more for sales and would have to compete in new and both traditional and innovating ways like offering golf membership, turnkey (fully furnished) properties, and in some cases, we have even seen a car or two a part of a home purchase. For decades I have offered white glove concierge style auctions for clients to consider. Just as how we sell our fine Sotheby’s Art, wine, jewelry and cars.
•For some time now you have partnered with Sotheby’s Concierge Auctions, how will that subset come into play as the marketplace shifts?
It invites buyers from across the globe, most bidders are repeat clients who have purchased fine and rare merchandise through us. One of the things that separates us from everyone else is we deliver certainty, and that simple fact motivates buyers to act now and not remain on the sideline.
•As market corrections grab headlines across all mediums and outlets how do you provide service during what can be critical times for clients?
When a client is working with a seasoned advisor who has weathered through all sorts of markets and those clients are open to hearing our recommendations, they not only win, but they also are at ease. Just as asset managers, we examine and discuss options. Problem solving is something I pride myself in and through commonsense that has always gained us the best results.