“How’s the market?” It’s a question every luxury real estate agent or broker has heard countless times before. Unfortunately, the answer isn’t as simple as that three-word query. The state of the luxury real estate market depends on several factors including pricing, inventory and the average number of days that properties stay on the market – all of which influence, or are influenced by, supply and demand.
In July 2016, for example, inventory was high and 7-day average national pricing hovered around $1.5M. By the beginning of this year those figures had flipped, according to the Institute for Luxury Home Marketing, with prices hitting the $1.65M mark and the number of available homes plummeting by about 20%.
So, when is the best time to buy? At Walt Danley Realty, we’ve learned that there’s no one-size-fits-all answer for every buyer. The best-case scenario involves finding a luxury home when you need it, at a price that’s fair (or better) for the current market. Here are a few crucial considerations when looking for the perfect time to buy a luxury home.
This goes without saying, but it’s important to know what to expect before you begin your search. See what similar homes have sold for so you can better anticipate the amount you might have to pay for your new luxury home. Your Realtor®, agent or broker will be able to pull comp listings for your desired neighborhood and luxury home type.
Would you feel more relaxed and satisfied with home buying experience if you get an amazing deal on the price of a property, or of you get the location, amenities and floor plan you’ve always wanted? Knowing your top priorities helps us search and negotiate with your best interests in mind.
Look at how the market is performing, nationally and locally, before making the decision to buy now. National events such as the 2016 election and the current immigrant labor shortage impacted the Phoenix housing market; however, experts say the high-end market is stronger than in recent years, up 18-32% for homes of $2M or more.
If you’re not in immediate need of a new home, follow seasonal trends in your area for forecasted listing price lows and inventory highs. “While it may seem counter-intuitive, the summer is actually a great time to purchase a luxury home in the Valley of the Sun, especially if you’re looking above $2 million,” says Dub Dellis, Chief Operating Officer at Walt Danley Realty. “Soaring temperatures tend to keep most buyers away, but the savvy few who brave the heat are rewarded with great deals.”
Mom’s trusted advice to keep your budget in check holds true whether your spending limit is $225,000 or $2.25M. If there’s some flexibility in your budget, great. But think extra hard before committing to a purchase that’s well above the price range you originally set for your search.
Looking at sales graphs, it seems clear that last summer was a great time to buy a luxury home – by the numbers, at least. The reality of buying a luxury home isn’t that simple. While purchasing during a buyer’s market makes financial sense on the surface, lower inventory could mean settling for a home that’s less than ideal. That’s why it’s so essential to find a knowledgeable agent such as Walt Danley to help match you with the perfect property in Scottsdale, Paradise Valley, Fountain Hills or Phoenix at the right cost and time.