From Scottsdale to the Town of Paradise Valley
luxury housing remains pinnacle of industry
By Terrance Thornton | Digital Free Press
As the adage goes, “value is found in the price you pay for something,” but in the Phoenix metropolitan housing market the value-and-price pendulum has swung backwards, depending on who you ask.
As with all things, there are levels to this, and the single-family housing market has certain marketplace tenets at each price point. This story seeks to understand the rare air of luxury real estate and how the 21st century is changing the ebbs and flows of the profession.
The Arizona Digital Free Press spoke with two experts in the field:
- Frank Aazami, principal at The Private Client Group part of Russ Lyon Sotheby’s International Realty; and
- Walt Danley principal at Walt Danley Christie’s International Real Estate.
For both experts they say value is found in the price you pay for something but in modern luxury real estate consumers are looking for best-in-class properties. Period.
In recent years, Mr. Danley has expanded his practice to include the coveted north Scottsdale community — places like Desert Mountain and Silverleaf for example — because in modern luxury there is more than one destination for those seeking the best of Arizona properties.
“They both cater to luxury buyers who value quality, natural beauty and easy access to high-end amenities including shopping, dining, and entertainment,” he said of the communities of the Town of Paradise Valley and Scottsdale.
“Traditionally, Paradise Valley has catered to the upper tier of luxury buyers who want to be closer to employment districts, the airport and sporting venues. For the most part, homes in the Town of Paradise Valley are on one-acre lots, which provides a greater level of privacy and elbow room. Scottsdale, while still a premium luxury market, offers lower prices — the trailing 12-month average price per square foot for single-family homes in Paradise Valley is $723. It is $516 for north Scottsdale.”
But make no mistake, Scottsdale offers top-tier real estate — and is growing in stature in the Valley of the Sun for those seeking “elbow room,” Mr. Danley points out.
“Some communities in Scottsdale, like Silverleaf, command top dollar as well,” he pointed out. “Scottsdale also has a much wider variety of housing types and price points. You can buy a nice condo on a golf course in Scottsdale in the $500,000s. That type of product is not available in the Town of Paradise Valley.”
A snapshot of the luxury marketplace — typically any property $1 million or better — oftentimes fares better than single-family homes at more modest price points during times of economic worry, Mr. Danley explains of the marketplace.
“The luxury market has fared better during this market correction than the market as a whole,” he said pointing out the “white-hot” market of the last 24 months is undergoing a valuation correction.
“We anticipate that we will continue to give back some of the incredible appreciation we saw over the last two years, but prospective buyers who are waiting for a major downturn in prices will most likely be disappointed. Yes, demand has cooled considerably, but supply is still low relative to historic norms.”
Mr. Danley explains while the headlines one might have encountered expressing ideas of more inventory and cheaper prices is correct — there is more to the story, he says.
“I’ve seen a lot of articles talking about how inventory is up considerably year-over year,” he said. “While that is certainly true, it’s a bit misleading. Yes, supply in the northeast Valley is up about 70% over last year, but last year’s inventory levels were far below historical norms. Our current inventory level is 34% below where we were at the same time in 2017. It’s also important to acknowledge that the market varies from location to location. Inventory in the Town of Paradise Valley is up only 9% year-over-year.”
Luxury housing: a constant pursuit to do better
Mr. Aazami, principal at The Private Client Group, was named this year to the Top 100 of all Sotheby’s International Realty agents and reports times are changing but one element remains constant: best-in-class properties.
“In Manhattan, we learned about the benefits of high-level networking and more. One of our associates serving the New York City-area market discussed, for example, that he is brokering newly built residence for up to $5,000 per square foot,” he said after his return from the Top 100 dinner and event at the Ritz-Carlton Central Park.
“That pricing level is possible not only because areas such as Manhattan have traditionally commanded high prices throughout the residential spectrum but because legacy homebuyers are requiring platinum-level fabrics, on-the-cusp technology and other amenities. One, for instance, are barndoor-like doors that flush to the wall, saving space like pocket doors, but also are art pieces themselves.”
One thing Mr. Aazami says he is steadfast in is his assertion the luxury market must be an illustration of the clientele.
“People want to live longer and healthier, and we are paying even more attention to everything that matters to well-being and lifestyle enhancement,” he said. “There are apps that control mood and lighting room to room, hour to hour. Floor temperature can be controlled, too; this is more and more popular in the colder climates. You can take hot and cold dips before and after workouts. And hydraulic work-out products eliminate weights and provide more living space. Low-voltage lighting is healthy lighting.”
As the relentless march of time continues, the effect oftentimes leaves legacy luxury properties here in the Valley of the Sun in need of tender love and care.
“Today’s legacy properties are like cars, with multiple check engine lights,” he said.
“For example, a light goes on to alert you to the need to adjust your air quality or water the plants more. This monitoring process can also help us build more efficient homes. Say we place a meter on different sides of a home being built. We can determine which side is getting more rain and address that. It’s a new way of building, thinking smarter and saving costs.”
There is no quick approach to finding the right property for those seeking million-dollar properties in Scottsdale, the Town of Paradise Valley or anywhere else, Mr. Aazami explains.
“Listening attentively is key. If a client has certain likes and needs, it’s going to take a certain amount of time for an agent to understand them and research their checklist: These are the things that they like and don’t like,” he said of his approach. “But don’t frustrate them by showing properties that don’t provide all the checks. In today’s immediate-information society, they’ll find someone else. This demand for luxury, and the costs associated with it, is global — from London to South Africa to Arizona.”
But as prices remain at historically high levels to buy — and rent — here in the Valley of the Sun, Mr. Aazami says he worries about what could be the ancillary effects of the continuous upward trajectory of a metropolitan area.
“At the same time, I am concerned that this price level will work its way down to other points, pushing the workforce out of areas and adding to our affordable housing issue,” he explained. “That’s a big concern for me. Everyone needs homes.”
The Mortgage Bankers Association projects that interest rates will be 5.6% in Q2 of 2023, 5.4% in Q3 and 5.2% in Q4.
Luxury housing: more things change, more they stay the same
For Mr. Danley, he says in today’s modern housing marketplace relationships remain key, but the “Digital Age” cannot be denied.
“In the past, Realtors were the gatekeepers to information on the market,” he said. “If you wanted to know what was available for sale, you had to go to a Realtor. Buyers and sellers today have access to almost as much market data as Realtors, so our role has transitioned from providing information to interpreting information.”
But to make that interpretation effective, Mr. Danley contends, all outreach tools have to be deployed to reach all subsects of the people who make up the market.
“To do that effectively, a Realtor today must be much better informed than in years past. Realtors and consumers also have easy access to a plethora of platforms to share information,” he said. “Online exposure, social media and video are critical components to any good Realtor’s tool kit. Print advertising is not dead, but a Realtor who is not heavily utilizing online channels is quickly headed to extinction.”
Mr. Aazami says he focuses on his clientele and serving their needs through all mediums available to him.
“When you’re hanging around the best, you pick up their habits, their demeanor and, most importantly, their attitude,” he said. “And the Top 100 experience underscored my belief that I’m competing with no one. I wake up every day and ask who can I help out there, how can I better heIp existing clients? I’m not here to change the world. I want to change the person in the mirror, make myself better.”
Mr. Danley agrees the more things change — the more some things stay the same.
“Relationships are the core of our business,” he said.
“That was true when I started in the business 45 year ago and its importance has only increased over the years. Buying or selling a home is an intensely personal process and technology that helps agents extend and enhance relationships with their clients is incredibly powerful. Technology that ‘robotizes’ the process is significantly less helpful. For me, it’s all about communicating with clients and peers in a meaningful and thoughtful way.”