Luxury-home
sales gathering steam in Valley as deals aboundBy
Jan Buchholz Phoenix Business Journal 11.06.09
Sales
of luxury homes in
Paradise
Valley
and portions of
Scottsdale
are picking up, largely because of dramatic price discounts
that have prompted all-out bidding wars.
“It’s
out-of-state buyers, it’s in-state buyers — but what’s
selling are the deals,” said Rusty Davis, a luxury-home
specialist with Russ Lyon Sotheby’s International Realty.
As
an example,
Davis
cited a spec home just east of
Mummy
Mountain
that was completed about a year ago and listed for more than
$4 million. The construction lender took possession of the
property after the builder defaulted and put it back on the
market Aug. 15 for about $1.6 million.
“There
were more than 15 bona fide offers,”
Davis
said.
The
winning bid was for more than $2 million. The buyers closed on
the deal within two weeks, bringing all cash to the table.
Another
spec house northeast of Camelback Mountain, which Davis
describes as one of the prettiest homes he’s ever seen, also
sold for less than half of its original list price of nearly
$6 million. It was a short sale, meaning a deal was made
before the property was sold to the highest bidder at a
trustee sale. The cash deal closed for almost $2.8 million,
Davis
said.
The
amount of inventory of very high-end homes remains staggering.
There’s an estimated five- to six-year supply of homes
valued at more than $3 million throughout the Valley, and
capable buyers are snatching up what they believe are the best
long-term deals.
“The
majority of them are wealthy people with a lot of cash.
We’re especially seeing Canadian buyers,” said Evan Katz,
an agent with Realty Executives in
Paradise
Valley
.
With
conventional lenders requiring down payments of 20 percent to
30 percent, some creditworthy buyers are having to pass on the
best deals — but not everyone.
Beth
Jo Zeitzer, president of ROI
Properties in Phoenix, brokered a recent deal
using a “professional loan,” which is being offered
locally by Compass
Bank.
A
physician and his family who were moving to
Phoenix
from
Tampa
,
Fla.
, purchased a spec house near
Hayden Road
and
Sweetwater Avenue
in
Scottsdale
. When it was built, the list price was close to
$1.8
million. As the market declined, the price dropped to $1.1
million. The first-time home buyers with high credit scores
negotiated the price below the $1 million threshold in a short
sale. The family ended up putting 5 percent down on a $950,000
professional loan through Compass Bank.
In
another instance, a physician who moved from
New York
to take a position with Phoenix Children’s Hospital
purchased a home south of
Shea Boulevard
, near
56th Street
. During the height of the real estate market, homes in that
area were selling for more than
$1
million. In this case, the lender had repossessed the home and
deeply discounted it to $554,900. A bidding war ensued, with
the doctor offering $565,000 to seal the deal with a
conventional loan.
Courtney
Thissell-Blake, a Compass mortgage banking officer, said her
bank is the only one doing the low-down-payment professional
loans in the Valley.
“Bank
of America was doing these loans for doctors only, but they
cut off the program about four months ago,” she said.
In
a normal market where values have stabilized, the Compass
professional loan program is designed to be a 100 percent loan
— a rare opportunity even the best of market conditions.
Compass’ jumbo professional mortgages are available to
attorneys, physicians, oral surgeons, dentists, certified
public accountants, CEOs and CFOs of publicly traded
companies. New graduates in these fields are eligible if they
have an offer letter from an employer, Thissell-Blake said,
and all borrowers must have high credit scores.
Zeitzer
said one of the positive aspects of the luxury-home market is
the predominance of buyers who will occupy the property.
“Investors
are totally out on the sidelines. When they look at how long
it will take to absorb the inventory, it doesn’t make
sense,” Zeitzer said. “This market presents a phenomenal
opportunity for many buyers.”
For more
information about Lillian Wong & Associates and our services, please visit
my website at LillianWong.net or email me at
Lillian@LillianWong.com.
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