Luxury Sector Surging Like Crazy!!

 During the early part of the price explosion that has occurred over the past 2 years, the high end of the market lagged behind the low end and mid-range segments.

Now the high end market is making up for lost time and prices have been surging over the past 6 months.

As an example, the 3-month average price per square foot for single-family homes sold in Paradise Valley exceeded $700 for the first time in January, coming in at $707.64. The same measure 12 months ago was $515.75. This is an astonishing annual increase of 37%. During the 12 months that ended January 2021, the increase was "only" 17%.

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The graph below is the visual illustration of the stunning spike in PV prices happening right now:

A sample of a few other higher end city / zip codes trending over 300 $/Sq Ft:

By contrast, most other zip codes and Valley cities are on the rise, but in the low to mid 200's $/SqFt range:

However, these graphs fail to parse the high end markets in these Valley cities / zips. 

Example:

While it's hard to break-out the high end market stats in places like Gilbert, where the Av $ / Sq ft is $243.77 ....

 ... If we use ARMLS FlexMLS to manually look at the Average $ / Sq Ft in January for Gilbert home sales over $1M we find an Av $ / Sq Ft of $332.17!

Looking closely at Gilbert we see more evidence of a hot luxury sector looking at the average seller discount of only 2%. 

Takeaway:

Yes, the luxury sector is surging across the Valley! 

Good to be the leader in luxury w/ over triple the Volume of our nearest competitor!!!

Inventory Issues Continue...

 Cromford Daily Observation ~ Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities:

At first glance, this is a similar picture to last week, with front-runner Fountain Hills losing ground but the other 16 moving in favor of sellers.

However, the average change in the CMI over the past month is 15.4%, down from 18.5% last week. The acceleration phase of this hot market is now over and it is starting to approach its maximum level. Indeed, some cities have even shown a slight decline in their CMI over the last few days. These are Chandler, Gilbert, Glendale, and Goodyear.

What we are seeing in these 4 cities is a fall-off in demand, probably caused by affordability concerns as prices continue to rocket higher. We should not be surprised - this is how markets are supposed to work. Higher prices weaken demand which in turn causes supply to recover. However, the change we are seeing is very small and does not amount to a turnaround. Not yet anyway.

The high end of the market is largely unaffected by this new trend at the moment and continues to set new records for low supply.

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Building on that last sentence above - a good example of a high-end market setting new records for low supply would be Paradise Valley:

The drop in PV active listings over the past 3 years is stunning!

It's a similar story throughout the NE Valley corridor: