LPG Group | Estancia Phoenix Life | September 2023 Digital Newsletter

Estancia Mid-Season Real Estate Update

We are pleased to provide our annual “Mid-Season Real Estate Update” and we hope that you are all healthy, happy and enjoying the summer.

First, we want to share with you the success of your on-site real estate team. Debbie Negrin, Jay Pennypacker and Will Foote (Luxury Property Group) have sold over $120 million in real estate during the last year. We were involved in 50 home and land closings and our production places us as the #2 overall producing team in the state of Arizona and we are ranked in the Top 100 Worldwide Agents for Sotheby’s International Realty. Check out the table on the back page showing our sales outside of Estancia.

Our team continues to outperform all other real estate groups with the highest volume of sales and number of transactions in Estancia. We were involved in 85% of the $70,435,000 in sales in Estancia during the last 12 months with homes and land consistently selling at a higher price per square foot and overall sales price with our team. Over the past two decades our team members have been involved in 360 transactions behind the gates of Estancia.

Luxury Property Group is a boutique real estate group offering personalized customer service that exceeds the expectations of our clients, which is consistent with the brand and identity of The Estancia Club. We have a deep understanding of the Estancia lifestyle which enables us to deliver the best marketing platform and sales results in the community and beyond.

Estancia Market – HOMES

Overall there have been a total of 8 homes sold in the community during the last 12 months compared to 16 during the previous year when we include both CUSTOM homes and LaScalas; a 50% decrease in home sales. Currently there are 5 CUSTOM homes on the market in Estancia with an average list price of $4,749,000. On the other hand there are zero LaScalas for sale currently, but we have 2 off-market LaScalas coming to market and one has a golf membership available.

$2,991,586 TO $6,500,000

The average sale price for homes in Estancia during the last 12 months is $4,306,448, which is up 6% from the previous year. Home sales pricing ranged from $2,991,586 - $6,500,000 for the homes that closed during the last year.

The statistics above show a market that has slowed significantly related to the number of home sales during the last year, but pricing has continued to increase. That said, there are two material factors affecting the amount of homes sold; historically low inventory and the availability of golf memberships. During the 20+ years we have been selling in Estancia we consistently had an inventory of 25 or more homes available for sale, currently there are only 5 homes for sale. Also, prior to having a waitlist to join The Estancia Club, buyers could purchase a home and become a member of the club after board approval. During the last year, 4 of the 8 homes sales included access to the seller’s golf membership and currently there are no homes for sale with golf memberships available.

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The lack of availability of golf memberships creates a challenging real estate sales environment where buyers do not want to pay $4,000,000+ for a home and not have access to the club. To say that the club and real estate go hand-in-hand is an understatement; Estancia is a true lifestyle community where the club and the residents of the community are connected now more than ever with the golf course and community consistently being awarded as the best in Arizona.

In conclusion, the limited inventory and high demand for homes that offer access to a golf membership have helped increase pricing and demand in the ultra-luxury market in Estancia.

Estancia Market – LOTS

During the last 12 months there was 1 lot sale compared to 5 lot sales a year ago. The average sales price last year was $1,475,000 and this year the lot closed at $1,200,000. Currently there are 3 lots on the market in Estancia with list prices ranging from $1,500,000 to $2,200,000. With the community nearly at full build-out, we expect lot prices to continue an upward trend going forward.

1 $1,200,000 LOTS:

# SOLD AVERAGE PRICE

Listed to the right are the detailed statistics for Estancia sales this year.

Listed below are the detailed statistics for Estancia sales this year:

Homes/Villas

2022/2023 STATS

Finally, the historically low inventory and lack of golf memberships is a challenge for all of the communities in North Scottsdale. A few communities, including Desert Mountain, have made owning real estate in the community a requirement and the only way to obtain a golf membership. This trend may continue and the strategy may be adopted in other communities if the demand for golf memberships remains strong.

Homes/Villas

Homes/Villas

Current Custom Home Market

Current Custom Home Market

Lots

Lots

Current Lot Market

Current Lot Market

Overall Luxury Market in North Scottsdale

When we review the luxury HOME market in North Scottsdale we utilize the 85262 and 85266 zip codes and include homes that closed at $1,000,000 or greater. In this market sales volume has dramatically decreased by 47%, while the average sales price has increased by 3% during the last 12 months. Overall, 545 homes have sold in the last 12 months compared to 1022 sales during the previous 12 months. Average sales price is $2,155,813 this year compared to $2,095,468 last year. Furthermore, the average sale price per square foot has increased by 6% averaging $525 this year compared to $493 last year.

As it relates to the ultra luxury market that includes sales over $3,000,000, there were 103 sales this year compared to 143 during the previous 12 months; a 28% decrease. This is consistent with the micro-market in Estancia where more demand than supply is keeping prices rising with the best homes selling very quickly and the ultra-luxury market remaining resilient. We can remember when we sold the highest priced home ever sold in Arizona a few years back for $12,750,000. Currently, this type of sale is a common occurrence with homes now even selling for twice this amount a few times per year.

The luxury LOT market in North Scottsdale is measured again using the 85262 and 85266 zip codes and includes lots that have closed at $300,000 or greater. Lot sales volume has dropped with 74 lots selling in the last 12 months compared to 166 sales during the previous 12 months; a 55% decrease. Average sales price has also dropped averaging $722,467 this year versus $810,258 last year; an 11% decrease. As it relates to days on market for luxury lots selling over $300,000, the average this year is 182 days versus 175 days to sell last year.

When we dive deeper into the lot market, the lack of inventory and golf memberships is having an effect similar to the home market, but the increase in building costs and the amount of time to build a home is dramatically affecting lot sales in North Scottsdale. Building timelines were consistent for many years at 18-24 months to complete construction where now many builders are quoting up to 36 months to build a custom home. This is another factor that has helped grow the ultra-luxury home market and spec home market where the sellers and builders/investors that are delivering new inventory sell their homes at premium prices. More to the point, today buyers are willing to pay a premium price for a new home now rather than wait the 36 months to build their custom home.

Looking to the future and based on the scarcity of developable land and low lot inventory in North Scottsdale, we expect lot prices to steadily grow going forward.

In closing, thank you for your business and your time reading this update. Please feel free contacting any member of our team for assistance in evaluating your real estate needs. You will continue to receive the very best real estate services from our group and we will always go the extra mile for you.

Kindest regards,

Debbie Negrin | Jay Pennypacker | Will Foote Luxury Property Group