The local luxury home market is booming right now, part of which can be credited to Launch Real Estate, one of the premier boutique luxury brokerages in Maricopa County, which had 38 closings in September 2020 alone that were more than $1 million and doesn’t show signs of slowing down. Az Business spoke with Sean Zimmerman, president of Launch Real Estate, about this growth and what he anticipates for 2021.
Az Business: Why is there a boom in the local luxury home market?
Sean Zimmerman: There’s an element of the growth that’s being driven by out-of-town buyers who are coming from markets where home values are significantly higher than ours. And there are others who realized they can work remotely since Arizona has a great lifestyle, that they get a lot of value for their dollar if they move out here.
I think year-over-year, our market has become stronger. After the COVID shutdown in March-May, we started to experience a significant increase in million-dollar-plus home sales. From June until November, we’ve seen the best second half of any previous year in million-dollar-plus home sales.
AB: What is the price threshold for these homes?
SZ: As our market has matured and we’ve seen some values return, $1 million is still a fair price to say it’s luxury, but we’re seeing a lot more at the $2 million-plus range, and we’ve seen some record-breaking sales prices this year.
I think it’s a combination of area, square footage and acreage. Luxury isn’t defined by just an area, it isn’t just in Paradise Valley or Scottsdale. You’re seeing luxury sales happen in Queen Creek and Gilbert, Chandler and Ahwatukee. So when you look at more expensive homes like $2 million-plus, you’re probably going to be in a couple key geographic locations and be on more than half an acre.
AB: What are some trends you’re seeing?
SZ: What’s trending or changed in 2020 is the increase in home offices and home gyms and that’s a direct result of COVID. We’re also seeing more than one home office if there’s two individuals working from home. People are needing more space in their home for offices, gyms and for kids returning from college because of the change in lifestyle. You’re also seeing a lot more built-out entertaining space like swimming pools, outdoor barbecues and kitchens.
AB: Given the increased demand for housing in Arizona, how is the luxury home market helping alleviate that demand and is it addressing the limited housing supply?
SZ: We’ve dealt with the limited housing supply as we get back into growth mode and part of that has to do with the fact that there has been less trades and skilled labor. I think we are filling and providing a different market; I think the luxury market has done a good job of attracting and bringing people into Arizona. I think builders and land planners are getting more active in how to make up for the lack of supply and continued demand and home renovators have done a great job of finding ways to reposition a home and hopefully all those things will help to continue to alleviate some of that stress. But I think we’re going to continue to have some pressure points as a result of lack of supply and continued demand in 2021. I think we’re seeing great industry growth and that’s going to help us with our demand needs and continue to drive us in a positive direction with our real estate and economy.
AB: What is the outlook for the local luxury home market in 2021?
SZ: We’re very bullish on a great opening 2021, and I say that with a caveat that supply is tight, so where it’s great with demand, we’re going to have some restrictions on what we can actually get. I’m looking forward to it. I think people are expecting the first quarter to be as busy or even busier than what we’ve seen the last several months. I think we’ll see our best quarter ever. After that, my general guess is that we’re going to continue to have a great and then stable 2021 in the luxury market here in Phoenix.
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