Real Estate

Empty Nesters, Millennials Shelling Out To Live In New Phoenix-Area Condos

(Source: AZCentral) By Catherine Reagor

When plans to turn the Borgata, a once-posh Scottsdale shopping center, into luxury condominiums were launched five years ago, the response was tepid.

The housing market’s recovery from a devastating crash had just begun, and the allure of condos hadn’t yet caught on in metro Phoenix as it had in other big cities like New York, San Francisco and Chicago.

But when the Enclave at Borgata’s first residents moved into their million-dollar condos early this year, they found plenty of neighbors had already settled in. More than 60 percent of the homes had sold.

Condominium developers are building highrises near downtowns, luxury loft-style homes next to shopping centers and smaller infill-connected homes in popular neighborhoods of Phoenix, Scottsdale and Tempe at a record pace.

MORE: Metro Phoenix starting to grow up instead of out

Since last year, condo sales throughout the Valley have almost tripled, while prices are up 17 percent, outpacing gains for the housing market as a whole.

Valley luxury homes by the numbers

A year ago, some housing market watchers were concerned too many new condos were going up too fast in metro Phoenix. So far, sales and prices are beating expectations.

  • More than 4,000 new condos were started or completed in the past two years.
  • The median price for new condos has climbed to $384,000 from $301,000 a year ago.
  • The median price for a new single-family home is about $302,000.
  • During the first quarter of 2017, 50 new condos sold, compared to 11 during the first three months of 2016.
  • The average price of new condo is $547 per square foot.
  • Luxury condo sales have quadrupled from last year.

“Condos are gaining market share in the Phoenix area, selling in larger numbers and seeing higher prices,” said real estate analyst Mike Orr with the Cromford Report.”The new attached luxury jewel-boxes (condos) are where prices are really climbing.”

Housing shift underway

A shift toward denser infill housing for metro Phoenix is occurring mainly because of changing lifestyles of baby boomers and millennials, who want luxury residences with the amenities of an urban setting.  Also, rising home values, in general, are helping people sell homes farther out and move closer in.

Downtown Tempe launched the post-crash condo trend in 2012, with highrise projects on Mill Avenue and Tempe Town Lake.

Downtown Phoenix, which went without any new housing for decades, now has new highrise condo projects planned on several prime corners.

MORE: 5 new Phoenix apartment, condo, home projects under construction

At Portland on the Park, a 149-unit condo project on Portland Street and Central Avenue, 75 percent of the condos have sold. Prices start at $235,000 and climb above $1.2 million.

“Our first residents are a part of a movement writing the next chapter in a more connected, more robust downtown Phoenix,” said developer Tim Sprague, principal of Habitat Metro.

And a 31-story residential tower was recently announced for downtown Phoenix’s Arizona Center by North American Development Group.

“It’s clear people want to live in connected areas like downtown Phoenix now,” said Chris Chamberlain, a partner with North American Development Group, which is also developing the El Dorado on 1st condos in central Scottsdale.

Other areas attracting infill development include Downtown and Central Phoenix, Midtown, the Camelback Corridor and Biltmore areas, and Central Scottsdale from Borgata to Old Town Scottsdale.

Continue reading at AZCentral …