Land Prices Growing

The high-end real estate sector in the Greater Phoenix area is witnessing a remarkable increase in land values within Paradise Valley and Arcadia specifically lately. In the last three years alone land prices have surged significantly especially for parcels under 2. 5 Acres, with costs doubling. Various factors such, as wealth migration and the growth of the economy are contributing to this notable trend. Land for sale in Paradise Valley, for instance, has drawn the attention of individuals from across the country and abroad in recent years. In fact, a recent study by Phoenix Valuations revealed remarkable data points! Small vacant plots in Paradise Valley (under 2.5 acres) have seen their prices leap from $1.52 million in 2020 to $3.18 million in 2023. Days on market shrunk from 167 to 113. In Arcadia, a vacant 1.05-acre lot sold for $5.2 million earlier this year.

Price Surge Breakdown

Several factors have contributed to the steep rise in land and home prices:

• Wealth migration influx
• Local job market expansion
• Increased demand for larger lots
• Rising value of available lots
• Luxury homes starting at $10 million+ in key areas
• Average vacant lot price hitting $3.18 million
• 27-acre parcel sold for $42 million in Paradise Valley

Builders and developers are feeling the ripple effects of these price hikes. With Arizona land prices doubling, the cost to develop high-end custom homes has also surged. What used to be a $5 million new home in Paradise Valley now starts at over $10 million. We as a brokerage have witnessed this trend.

High Density Projects Are Also Driving Valley Land Prices Up

Custom Home Market Remains Resilient

Despite these price increases, the custom home market is holding steady. Local builders, such as Cullum Homes, have seen a continued demand for high-end properties. Even though mortgage rates are lingering around 6.5%, the luxury market remains relatively unaffected. Many buyers in the $4 million and up price range are paying cash. This keeps the high-end real estate market stable. However, the interest rate environment still impacts luxury buyers' investment decisions and business portfolios. Hopefully, rates will soon come down. According to recent reports, that's something we can look forward to. We shall see.

Other Things To Note

While Paradise Valley continues to do its thing, homes for sale in Desert Mountain also remain strong. Why is this? Due to featuring seven golf courses (six designed by Jack Nicklaus), people see it as the 'Adult Disneyland'. Recently, it was reported that Scottsdale's zip code of 85262 (where Desert Mountain is located) has become Arizona's wealthiest zip code by household income. When it comes to land? Projects such as Optima McDowell Mountain Village, FENDI Private Residences, The Parque, and many other high-density projects continue to drive land value up. With that said, we will just have to see how things look in mid 2025.

Here at Williams Luxury Homes, we keep a close eye on the overall market. Should you be interested in learning more about the market, feel free to contact us. Froom watching the headlines to knowing top developers, we hear all the latest buzz. Plus, if you're looking to build, we'd be happy to introduce you to reputable builders and architects. Thank you for reading.