Luxury-home sites sit empty, wait for buyers

At the luxury community of Cantabrica Estates in north Scottsdale a keypad-entry screen at the gate welcomes visitors. But nobody is home.

The nine-lot property with stone entry, an elaborate gate, walls and roads is stuck in a post-recession Scottsdale twilight zone.

The stalled project southeast of Jomax Road and 118th Street is a glaring casualty of the real-estate collapse of the past three years.

Dozens of luxury-home lots are on the market in north Scottsdale but there are few buyers and not much construction. Still, the owners of a nearby 81-acre property northwest of Redbird Road and 118th Street are seeking a rezoning that would allow 33 custom residential lots. It is one of the few residential rezoning proposals in north Scottsdale this year.

Under the city's General Plan, the proposed Atalon community could accommodate 81 homes at one per acre. The request includes about 40 acres of open space, protecting washes and hillsides, said zoning attorney John Berry, who represents owners Brian and Suchada MacDonald.

Although the current market is flat for luxury-home sites, it could take up to two years to get through the zoning process and full approval to build custom homes at Atalon, Berry said.

"People recognize that they want to be at the front of the demand curve," he said.

Other luxury communities are awaiting that demand curve to ramp up, including Cantabrica Estates, Sereno Canyon, Boulder Mountain Estates and Troon Canyon Estates, all east of Troon Mountain and north of the McDowell Mountains.

The Meguire Corp., which developed Cantabrica four years ago, sold one lot but lost the property to foreclosure in 2008, said Ernie Meguire, the company manager.

"There is no market," he said. "The people who could afford to hold on did."

Meguire was not one of them.

"I imagine it's in the freezer for a couple of years," Ryan Duncan of Land Advisors Organization said in assessing Cantabrica.

There is still a lot of "ugliness" in the north Scottsdale market but the long-term prognosis for the area is positive. It's still a desirable area to live in and the land supply is extremely constrained, he said.

The developer of Sereno Canyon is sitting on 128 luxury home lots at 128th Street and Happy Valley Road. Nine buyers purchased lots before the economic downturn but no one has built a home, said Debbie Omundson, Sereno Canyon sales director, adding that it's difficult to get construction financing.

Lots of 2 1/2 to 3 acres are on the market starting at $695,000. The developer, with no debt on the property, is holding firm on prices and waiting for the market to recover, she said.

Boulder Mountain Estates, another luxury community at 118th Street and Buckskin Trail, lists 18 available lots on a sign outside its gates starting at under $700,000.

Only one house has been built in the five years since the utilities and other improvements were put in, said real estate agent Matt Lucky of Russ Lyon Sotheby's International Realty.

Troon Canyon Estates across the street does not have any residents.

A 3.24-acre lot there is on the market for $475,000, reduced last week from $500,000 and the seller will carry the mortgage, said real-estate agent Deanna Peters of Keller Williams Realty.

"Anyone with land has to be creative and flexible with the terms," she said, summing up the challenge for sellers.

It's a buyer's market.

by Peter Corbett The Arizona Republic Dec. 10, 2010 10:54 AM





Luxury-home sites sit empty, wait for buyers