Luxury Home Market Stays Hot
April 1, 2022
It’s safe to say that if you specialize in luxury real estate, you’ve been a happy but very busy bee for the past couple of years. While it’s true you could say this for the market in general, it seems even more true for the luxury market in Arizona as we continue to see year-over-year numbers on the rise in 2022. When I last wrote about the luxury market in 2021, it was hot and heating up with no indication of slowing down, and that has remained the case.
As we kicked off 2022, the median sales price for luxury in the Phoenix area alone increased from $1.04M in January 2021 to $1.1M in January 2022, according to Russ Lyon Sotheby’s International Real Estate. Furthermore, units sold increased by a whopping 63% during the same timeframe. And while the month-over-month numbers decreased from December 2021 to January 2022, this isn’t shocking because December is a seasonally slower month.
Essentially the only statistics in the luxury market that aren’t increasing are days on the market and active inventory… which are, of course, indicators that the market is still extremely hot and luxury homes are in high demand. The Institute for Luxury Home Marketing reported Phoenix’s average days on the market in January 2022 to be 34, keeping steady the seller’s market. They also reported just 122 new listings. We are witnessing the strongest luxury market in U.S. history, and it’s gaining more momentum with each passing month. We expect that this will only continue as Phoenix was named #19 in Realtor.com’s Top 20 Housing Markets, with Tucson falling just outside the top rankings at #21.
Market-wide, Arizona continues to be an attractive place to move for people coming from out of state. The beautiful weather, golf courses, strong economy, and affordability are among the top reasons for a move. This is a trend we saw pre-pandemic, and with more companies moving to flexible work from home options, the list of reasons to move to the Grand Canyon state grows longer. This has put even more fuel in the luxury market, especially for buyers coming from states with higher taxes and home prices. Buyers know they can get more square footage for their dollar in Arizona when compared to California, for example, and now many of them can work from wherever they’d like to call home. This change is also lending itself to less “vacation homes” because the affluent community can travel between homes for work. So while they may be purchasing more property, they’re not considering it a true vacation home.
As we continue to see people moving to Arizona in droves from states like California and Washington, according to The Institute for Luxury Home Marketing we haven’t seen as many international buyers and investors when compared to previous years. Even with this in mind, the luxury market hasn’t been affected by the lack of these buyers.
Moving further into 2022, it’s expected that the luxury market will continue to boom. There’s every indication that the trends we’ve discussed will keep the course. Stay vigilant for your buyers, as active listings and days on the market remain low, and keep in touch with your potential luxury home sellers. Now is their time to shine!