Optima Kierland’s luxury condominiums in north Scottsdale are nearly sold out.
There are 964 condominiums in the development pipeline roughly valued at $500 million in the Phoenix area, according to a new report by Polaris Pacific. Of those, 379 are new condos under construction, while the remaining 585 are entitled, which means they have city approval to begin construction, said Mike Akerly, vice president and regional manager for Polaris Pacific. Of those, 379 are new condos under construction, while the remaining585 are entitled, which means they have city approval to begin construction, said Mike Akerly, vice president and regional manager for Polaris Pacific. Of the condos under construction in metro Phoenix, 111 are in the Biltmore area, 110 are in the Encanto area, 97 are in north Scottsdale, 43 are in south Scottsdale, and 18 are in downtown Phoenix, according to the report.
Of those approved by cities to begin construction, 480 are in north Scottsdale and 108 are in downtown Phoenix. While median condo prices are up 6.2 percent year over year and the median price per square foot is up about 8 percent, the demand for condo inventory hasn’t quite caught up with the demand for single-family home inventory in the Phoenix market, he said. Of the 2,216 multifamily units built in 2017, only 495 were condos while 1,721 were new apartments, according to the new report. Sales volume for the entire residential real estate market in metro Phoenix during the first quarter hit $7billion, which is the highest its ever been, he said.
“Growth in the condo market continues to increase and prices continue to increase but it doesn’t seem to be at the same demand as the overall market for homes in Phoenix,” he said. “The condo market continues to play a niche role.” The average resale price in Maricopa County during the first quarter was $313,000 — the highest it’s been since 2007, Akerly said. Median sale prices were at $250,000, which is the second highest price point since 2006. “The economy in Phoenix is obviously on fire right now,” Akerly said. “Things are very different than the last
cycle in 2006 and 2007. The net migration of people coming into Arizona is astounding — 200 to 300 people every day.”
At the same time, job growth has been consistently increasing an average of 3 percent since 2011. “We feel extremely confident about the direction of the market right now,” Akerly said. “I know everyone in the Phoenix market is always sensitive when we start talking about 2006 and 2007 prices.” The last time prices were that high a blood bath ensued. But it’s a different landscape today, he said, with more jobs being created with increasing wages. He said he’s seeing more move-down buyers in the luxury Scottsdale market, where baby boomers are downsizing and are looking for “lock and leave” capabilities. In particular, he’s seeing a pickup in Canadian buyers, largely from Vancouver.
Read it at Phoenix Business Journal