by Jan Buchholz Phoenix Business Journal April 30, 2010
Paradise Valley luxury homes are trading at a rapid clip, and one agent who specializes in the affluent neighborhood says she has more buyers than properties.
“I need more inventory,” said Lauren Ellington, agent for Realty Executives Premier Marketing Group.
Since the first of the year, high-end homes have been selling “like hotcakes,” she said.
Chris Karas, an agent with Russ Lyon Sotheby’s International Realty, has been involved in a number of high-end Paradise Valley sales since the beginning of the year — including the most expensive one to date.
The property, located near the northeast slopes of Camelback Mountain, was a 12,000-square-foot spec house constructed on 2 acres and completed in 2009. It sold for $6.6 million in February.
“It was to be priced about $12 million when the builder broke ground,” Karas said.
In this case, the buyers were local residents looking to upgrade. But the vast majority of recent sales in Paradise Valley have involved out-of-state and out-of-country buyers, according to Ellington, Karas and veteran broker Walt Danley, founder of the Walt Danley Group.
“The PV buyers are from the Midwest, in their late 40s and early 50s, and they’re planning for retirement,” Danley said. “They can afford to buy these homes for the (enjoyment of their) grandchildren.”
Although Midwest buyers predominate with Danley, Karas has worked with buyers from all over the world: London, Germany, South Africa, Dubai, Abu Dhabi and Qatar. They are a combination of old and new money, he said. Many are retirement age, but several have been in their late 20s and early 30s.
They aren’t shopping remotely, either.
“They are very savvy buyers. They do their research. They come into town. They are looking for quality,” Karas said.
Ellington concurs.
“These aren’t bottom-feeders or lowballers,” she said.
Even though the Leads section of the Phoenix Business Journal has recorded nearly 50 notices of trustee sale on Paradise Valley homes since the beginning of the year, Danley said foreclosures are not driving the market as much as they were a year ago.
“Most of the foreclosures have come and gone,” Danley said. “They were mostly builders’ spec homes.”
Short sales — deals that a seller works out with a buyer for less than what is owed on the mortgage — are the dominant model, Danley said. However, Ellington said short sales and lender-owned properties are not necessarily the best deals.
“With those properties, there’s a bidding war,” she said.
Prices can escalate quickly and may ultimately exceed the cost of a comparable traditional sale. In fact, they can quickly become lousy deals.
Short sales come with additional challenges, including timing.
“Buyers are afraid of them. They can take two, three, four months,” Danley said. “I had one that was in escrow for six months.”
Moreover, Ellington said short sales can be tainted by loan managers who are afraid to pull the trigger.
“Sometimes you have to get a hold of the head honcho and tell them, ‘Here’s the deal your people rejected,’” she said.
Banks dragging their feet have nothing to do with the quality of buyers, she added.
“They’re people who can put half down. They have credit scores of 800 and great job income,” Ellington said.
Cash is king for now, with cash deals closing within days with no appraisal required.
Ironically, although many of the Paradise Valley foreclosures involved spec homes that builders couldn’t sell once the market tanked, there is a new opportunity for buyers to build custom homes at great prices because land prices and construction costs have dropped.
“Builders are picking up lots for build-to-suits. There are still great pieces of dirt in PV,” Karas said.
Danley said he expects the dealing to continue through June, even though other high-end neighborhoods, such as North Scottsdale, have reached the end of their selling cycle for this year with the snowbirds headed home.
“It’s like the last one out, turn off the lights,” Danley said.
In Paradise Valley, transactions should continue because the best prices may be the current ones.
“If buyers wait until next season, it might be too late,” he said.
Get Connected
Realty Executives: www.realtyexecutives.com
Russ Lyon Sotheby’s International: www.russlyon.com
Walt Danley Group: www.waltdanley.com
Paradise Valley Sales
Paradise Valley ZIP code 85253 has some of the Valley’s most exclusive homes for sale. Here are some details on those sales:
219 Active listings priced at more than $2 million
22 Active listings that are lender-owned
23 Homes sold for more than $2 million, Jan. 1 to April 27
10 Homes sold for more than $2 million and paid for with cash, Jan. 1 to April 27
$6.6 M Highest-priced home sold so far this year in Paradise Valley, 5335 N. Wilkinson Road
Paradise Valley luxury homes are trading at a rapid clip, and one agent who specializes in the affluent neighborhood says she has more buyers than properties.
“I need more inventory,” said Lauren Ellington, agent for Realty Executives Premier Marketing Group.
Since the first of the year, high-end homes have been selling “like hotcakes,” she said.
Chris Karas, an agent with Russ Lyon Sotheby’s International Realty, has been involved in a number of high-end Paradise Valley sales since the beginning of the year — including the most expensive one to date.
The property, located near the northeast slopes of Camelback Mountain, was a 12,000-square-foot spec house constructed on 2 acres and completed in 2009. It sold for $6.6 million in February.
“It was to be priced about $12 million when the builder broke ground,” Karas said.
In this case, the buyers were local residents looking to upgrade. But the vast majority of recent sales in Paradise Valley have involved out-of-state and out-of-country buyers, according to Ellington, Karas and veteran broker Walt Danley, founder of the Walt Danley Group.
“The PV buyers are from the Midwest, in their late 40s and early 50s, and they’re planning for retirement,” Danley said. “They can afford to buy these homes for the (enjoyment of their) grandchildren.”
Although Midwest buyers predominate with Danley, Karas has worked with buyers from all over the world: London, Germany, South Africa, Dubai, Abu Dhabi and Qatar. They are a combination of old and new money, he said. Many are retirement age, but several have been in their late 20s and early 30s.
They aren’t shopping remotely, either.
“They are very savvy buyers. They do their research. They come into town. They are looking for quality,” Karas said.
Ellington concurs.
“These aren’t bottom-feeders or lowballers,” she said.
Even though the Leads section of the Phoenix Business Journal has recorded nearly 50 notices of trustee sale on Paradise Valley homes since the beginning of the year, Danley said foreclosures are not driving the market as much as they were a year ago.
“Most of the foreclosures have come and gone,” Danley said. “They were mostly builders’ spec homes.”
Short sales — deals that a seller works out with a buyer for less than what is owed on the mortgage — are the dominant model, Danley said. However, Ellington said short sales and lender-owned properties are not necessarily the best deals.
“With those properties, there’s a bidding war,” she said.
Prices can escalate quickly and may ultimately exceed the cost of a comparable traditional sale. In fact, they can quickly become lousy deals.
Short sales come with additional challenges, including timing.
“Buyers are afraid of them. They can take two, three, four months,” Danley said. “I had one that was in escrow for six months.”
Moreover, Ellington said short sales can be tainted by loan managers who are afraid to pull the trigger.
“Sometimes you have to get a hold of the head honcho and tell them, ‘Here’s the deal your people rejected,’” she said.
Banks dragging their feet have nothing to do with the quality of buyers, she added.
“They’re people who can put half down. They have credit scores of 800 and great job income,” Ellington said.
Cash is king for now, with cash deals closing within days with no appraisal required.
Ironically, although many of the Paradise Valley foreclosures involved spec homes that builders couldn’t sell once the market tanked, there is a new opportunity for buyers to build custom homes at great prices because land prices and construction costs have dropped.
“Builders are picking up lots for build-to-suits. There are still great pieces of dirt in PV,” Karas said.
Danley said he expects the dealing to continue through June, even though other high-end neighborhoods, such as North Scottsdale, have reached the end of their selling cycle for this year with the snowbirds headed home.
“It’s like the last one out, turn off the lights,” Danley said.
In Paradise Valley, transactions should continue because the best prices may be the current ones.
“If buyers wait until next season, it might be too late,” he said.
Get Connected
Realty Executives: www.realtyexecutives.com
Russ Lyon Sotheby’s International: www.russlyon.com
Walt Danley Group: www.waltdanley.com
Paradise Valley Sales
Paradise Valley ZIP code 85253 has some of the Valley’s most exclusive homes for sale. Here are some details on those sales:
219 Active listings priced at more than $2 million
22 Active listings that are lender-owned
23 Homes sold for more than $2 million, Jan. 1 to April 27
10 Homes sold for more than $2 million and paid for with cash, Jan. 1 to April 27
$6.6 M Highest-priced home sold so far this year in Paradise Valley, 5335 N. Wilkinson Road