Raising Arizona
Scottsdale and Tucson lead the way for the state’s high-end resort developments.
August 1, 2007
For anyone watching closely, Arizona’s enduring popularity among vacation home owners should come as no surprise. First there was the banner-waving that accompanied Phoenix’s ranking as the country’s sixth-largest city. Then there were two surreal years, starting in 2004, when real estate prices skyrocketed and sales closed before you could say "inspection." And finally, in 2006, Arizona’s growth rate of 3.6 percent spelled the end of Nevada’s 18-year reign as the fastest- growing state in the U.S."We used to lose people to Vegas because of the tax base," explains Sandra Wilken, designated broker and owner of Sandra Wilken Luxury Properties in Scottsdale. But the migratory shift, she contends, is a tribute to Arizona’s better quality of life—and high-end real estate is responding in kind.
Scottsdale
"When you talk to a person back East about Arizona, he
automatically thinks of Scottsdale," says Realtor Martha Briggs of Long Realty
Company. "The city has really carved out a brand." That brand, it seems, is an
evolving hybrid of city smarts and desert languor. Having prided itself on its
western culture for so long, Scottsdale is gradually trading in its Stetson for
sophistication. Downtown Scottsdale is routinely labeled "urban," thanks to its
luxury condos, shopping, restaurants and museums. Up north, sprawling high-end
developments offer spacious lots, city-light views and residential architecture
that runs the gamut from old world to contemporary. All this, of course, is
sprinkled with more than its fair share of golf courses and hemmed in by a
spectacular panorama of desert mountains.
A leveling off of real estate prices in Scottsdale
and Tucson has given buyers more options for ownership. Top: Tucson’s Campbell
Cliffs is listed at $22 million through Martha Briggs. Thomas Bliss/Long Realty Company. Bottom: Prices for homes
at Silverleaf, one of Scottsdale’s most successful communities, average $3
million. Salcito Custom
Home, Casa Girasol. Photography by Dino Tonn. (Click images to enlarge); function voidFunc() { } voidFunc();)
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And as sales have slowed in the past year, a surplus of
inventory has turned it into a buyer’s market. "As far as showing activity, I
think that there are a lot of people looking, but they are just not making any
commitments," observes associate broker Dawn Dickinson of Exclusive Properties
of Arizona. Perhaps that is because there is so much to choose from.
In Desert
Mountain, the 8,000-acre residential golf
community that Dickinson specializes in, there are currently about 200
properties on the market (not including pending sales). Since Desert Mountain
presides over Scottsdale’s luxury communities from its northern perch, and since
this Lyle Anderson development features an unheard-of 108 holes of Nicklaus
Signature golf, it has earned an elite status among Scottsdale developments.; function voidFunc() { } voidFunc();)
Casa di Pietra in Scottsdale, which recently
sold through George
Filippi of Christie’s Great Estates affiliate Equitable, was
listed at
$7.79 million. Photograph by Chad Deslatte, Joe Cottita (Epic Media, Scottsdale, AZ).
(Click image to enlarge)
Currently, there are 283 luxury custom homes under construction
or in design review, and the community is still working hard to sell its
remaining 15 lots and 42 developer homes. Buyer incentives like a furniture
credit or a $15,000 club credit were being offered in conjunction with the
developer’s recently completed courtyard homes, the Haciendas at Desert
Mountain. "Pretty much every day there are price reductions in homes and lots,"
says Dickinson.
Silverleaf is located on the
fringe of DC Ranch, its sibling community (both were developed by DMB
Associates). Scottsdale’s golden child of luxury communities, Silverleaf
commands reverent incredulity from Realtors and developers alike for its broad
appeal and lucrative success. DMB communities in general pride themselves on
diverse lifestyles—everyone from young professionals to families to retirees
calls Silverleaf and DC Ranch home—as well as an unusually generous allotment of
open space within each neighborhood. However, while homes have stayed on the
market approximately 25 percent longer than they did a year ago, prices in
Silverleaf and DC Ranch, which average $3 million and $1.4 million respectively, have
not dropped.; function voidFunc() { } voidFunc();)
Located in North Scottsdale, residences at the
private golf community of DC Ranch average $1.4 million. Photograph courtesy DMB Realty. (Click image to enlarge)
"DC Ranch as a total community actually had as much sold in
2006 as had been sold in 2005 from a dollar standpoint," explains Donald D.
Kent, president and COO of DMB Realty, the real estate arm of the DMB group. "It
dropped about 20 percent in total units, but its dollar point was higher. That
meant that the higher-end buyers were still buying at a favorable clip." It also
suggests homes in the luxury market will appreciate steadily, Graham predicts,
at a rate of some 10 to 12 percent this year.Yet, for all its appreciation, Scottsdale and Paradise Valley
remain affordable
—and therefore desirable—when compared to other luxury
markets. "The luxury, single-family-home market is doing extremely well," says
Wilken. "And it’s due to a couple of factors: We’re building some magnificent
homes, and we are really getting the out-of-state, out-of-country buyer who
is used to paying more for a piece of comparable property." Prices for the 56
homes now on the market in Paradise Valley start at $5 million, which is enough
to get a 6,000-square-foot home on one acre within a private gated
community. Currently, the most expensive home on the market is a
15,000-square-foot estate on five acres with a price tag of $20 million.
Developer Peter Magee of Magee Custom Homes, who has been
building dramatic, contemporary houses in Desert Mountain since 2000,
contends that the market is strong enough to support current—and
future—prices. After all, California buyers do not blink an eye when paying sums
that make Scottsdale residents blush. "It’s hard to imagine that prices will
continue to increase, but historically they have," Magee says. "Will it go at
the rate it has over the past five years? Probably not. But given construction
and land costs, the pricing that people have on homes out here is not
unrealistic."
Top and Bottom: Architect David Hovey, whose
firm Optima has offices in both Scottsdale and Chicago, designed this
eco-conscious home at Desert Mountain. The glass and steel house contains 13,000
watts of solar cells sandwiched between two layers of glass. Photography by Bill Timmerman/ Courtesy Optima,
Inc. (Click images to enlarge); function voidFunc() { } voidFunc();)
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Magee raises an important point: Land in Scottsdale is growing
scarce, and buyers should expect to pay accordingly. (In Paradise Valley, Wilken
notes, an average lot commands around $1.35 million.) Such dwindling opportunity
is exactly what developers behind Scottsdale’s two latest communities, Sereno
Canyon and Privada, are capitalizing on. Sereno Canyon, located on the north base
of the McDowell Mountains, is a custom-home community of 122 estate-size lots
that range from one-and-a-half to just under five acres. The community’s iconic
rolling hills, 360-degree views and rock outcroppings and formations are both
striking and increasingly hard to come by in new developments. Accordingly,
prospective homeowners can expect to pay between the mid-$700,000s and $2
million for a homesite. Of its 39 lots, 35 are currently reserved, and the next
phase is scheduled for release this winter.; function voidFunc() { } voidFunc();)
Sereno
Canyon’s homesites start in the mid-$700,000s. (Click image to enlarge)
Privada, adjacent to the Four
Seasons Resort Scottsdale at Troon North, offers 11 homesites for custom homes
and 40 semicustom spec homes. Homesites range from $800,000 to around $1.4
million; predesigned residences are priced from $1.5 million to $2 million. And
though Privada is next door to the Four Seasons, it has abstained from
cobbling together a concierge package in conjunction with the resort. Instead,
residents can choose if or how they would like to use the resort and then make
arrangements on their own for a spa treatment or dinner rather than having
24-hour access to all the hotel’s amenities.; function voidFunc() { } voidFunc();)
Prices at Scottsdale’s Privada start at
$800,000 for a homesite and $1.5 million for a spec home. Rendering by Tim Reader. (Click image to enlarge)
For people who do want a full hotel-style package, there are
still fractional ownership opportunities with Four Seasons Residence Club Scottsdale at Troon North. Prices for the remaining 10 percent of shares range from
$16,000 for one week during the "Silver" season of mid-July to mid-September, to
$100,000 for two "Platinum" weeks of prime Scottsdale time—the holiday period
through late May.
Located north of the Four Seasons development, Whisper Rock Estates is something of an anomaly in the golf-crazy world of Scottsdale communities: It is a completely separate entity from Whisper Rock Golf Club, which is nearby and requires a sponsor for every golfer who wants to be invited to join. Golf legend Gregg Tryhus developed the club, and it is home to Phil Mickelson’s first golf course design. The 850-acre, 200-homesite community has 47 lots on the market priced from $600,000 to $1.9 million.
Since every Scottsdale community is sitting on a disappearing commodity, developers are not too concerned when a property stays on the market longer than expected. Such has been the case at Mirabel, a Discovery Land Company development that sits on 713 acres just south of Desert Mountain and includes a Tom Fazio–designed course as part of its private, member-owned Mirabel Golf Club. Only three of Mirabel’s original 315 developer lots remain, and lot prices there have doubled or, in some cases, tripled since sales began in 2001. Currently, there are about 25 lots on the resale market priced between $500,000 and $1 million.The other two results of Scottsdale’s decreasing land supply are decidedly urban for a city that prides itself on its rural character: infill and vertical development. Just south of Desert Mountain, for example, well-known developers like Toll Brothers and Baron are creating residential enclaves on diminutive parcels. Baron’s Baraca Estates, for example, consists of just 16 lots with no custom home opportunities. Esperanza at Pinnacle Peak is a separate infill project nestled between a mountain preserve and the well-known Estancia development. A custom-home community, it offers just 17 estate-size lots at five acres apiece. Land prices start at $4 million.
Condominiums, meanwhile, are more abundant than cacti in south Scottsdale, but they have never quite made it north. That is about to change, however, with DMB’s One Scottsdale, which will include more than 1,000 residential lofts, condos and townhomes within its mixed-use environs. "You’ve seen it in Las Vegas, you’ve seen it in San Diego, you’ve seen it in markets in Los Angeles," explains Kent. "So there is definitely a movement in that, and you will see that same movement going into Scottsdale." Sales are anticipated to start by the beginning of 2009.
Tucson
Two hours southeast and perhaps 20 years back in real estate
time is Tucson, a city with a slower lifestyle pace, slower growth and slower
traffic. To the northwest especially, where the bulk of luxury communities are
taking root, the desert seems to integrate more fully with development than in
Scottsdale. Like their neighbors to the north, Tucson’s homes have mountain
views and city lights, but homeowners are more apt to admire the stars and
saguaros than the handful of tall buildings downtown. A golf course may brush up
against Native American petroglyphs; hiking is something Tucsonans do more for
nature than for caloric burn; and sights to see include observatories, desert
museums and Biosphere II. The city is also home to the University of Arizona,
which, though situated a considerable distance south of this northwestern luxury
corridor, exudes a palpable intellectual influence and cultural appeal.; function voidFunc() { } voidFunc();)
Stone Canyon in Tucson offers buyers a private Jay
Morrish golf course, clubhouse and eight new designer homes priced around $3
million each. (Click image to enlarge)
"Until recently, the top range for luxury homes in Tucson was
considered to be about $800,000 and up," says Briggs. Now, however, the average
luxury price hovers around $2 million. As an example, Briggs cites Street of
Dreams, a national home show event where homes on one street in a high-end
development are decorated and open to the public. It came to the Estates at Honeybee Ridge in Oro Valley, just north of Tucson, in 1998, and the show’s homes were
then priced between $650,000 and $750,000. "At the time, there was a real
question of whether or not Tucson could support those kinds of homes," Briggs
recalls. This spring, Street of Dreams returned, this time to Oro Valley’s
high-end golf community Stone
Canyon, where its eight homes are valued at a
total of $24 million.
Right now, the luxury market in Tucson faces conditions similar
to those in Scottsdale. Houses are selling, but the swollen inventory means they
are not selling fast, not even at the super high end. Tucson’s most expensive
listing—which Briggs represents—is a staggering $22 million. The house is dubbed
Campbell Cliffs, and when it was completed in early 2004 (it went on the market in March
2003), Briggs invited real estate agents from Scottsdale and Beverly Hills to
view it. "The broker from Beverly Hills didn’t think that there could be a home
here worth that kind of money," says Briggs. "But after she was in it, she
completely changed her tune and said, ‘If there were a comparable piece of land
and a home like this in Beverly Hills, it would cost
$100 million.’"
Campbell Cliffs encompasses 31,000 square feet (25,000 of which is air-conditioned) and straddles two of its six 3.3-acre lots. The list price includes the custom furnishings by designer Elizabeth A. Rosensteel of Phoenix as well as the owners’ collection of more than 100 paintings, sculptures and bronzes.
Campbell Cliffs, however, is definitely the exception rather
than the rule of Tucson’s luxury market. At Stone Canyon, for example, lot
prices have increased from $400,000 to $700,000 on average, most likely due to
the extensive golf market that the community taps into. Its 18-hole, Jay
Morrish–designed course has won numerous accolades. Additionally, plans for its
Marsh & Associates–designed, 44,000-square-foot clubhouse have re-cently
been unveiled. Build-out for this 1,300-acre property is not scheduled for
another eight to 10 years, and with a total inventory of just 700 lots, that
means the developers are taking their time and
banking on appreciation.In response to market demand, Stone Canyon now offers
predesigned homes in two neighborhoods: Tuscan Estates (prices start at $1.6
million) and Stonegate (prices start at just under $1 million). Both
neighborhoods are already 20 to 25 percent sold out.
Pima Canyon Estates is another luxury development in Tucson’s Catalina Foothills, and its 298 one-acre homesites occupy 450 acres. Just north are more than 255,000 acres of protected desert highlands, and within the actual community itself are a botanical garden, hummingbird center, cactus garden and waterfall. Six lots, priced between $1.25 million and $2.25 million, remain. Its sibling project, Stone House, has 48 lots of 230 remaining, with prices ranging from $140,000 to $335,000.
While Tucson is the land of bargains, it is also a city of
extremes. Joining Campbell Cliffs in the city’s top-tier real estate offerings
is Saguaro Ranch. The 1,035-acre development blends old-fashioned elements (a
general store, an organic farm, a horse ranch built and operated on 100-year-old
principles) with ultramodern considerations (a solar farm, a gray-water system,
a network of paths to accommodate Neighborhood Electric Vehicles). Of the 180
residences planned for the community—each parcel encompasses four to five acres,
with 80 percent of the community’s land remaining undeveloped—the first two
phases have mostly sold out and the third phase of 28 parcels will be released
this fall.; function voidFunc() { } voidFunc();)
Tucson’s Saguaro Ranch will leave 80 percent of its
1,035 acres undeveloped. The remaining acreage will include 180 residences, a
116-seat theater, a horse ranch, a 10,000-square-foot spa, three swimming pools,
an art barn, a post office and 25 miles of hiking and biking paths. (Click image to enlarge)
Right now, prices at Saguaro Ranch range between $1.25 million and $3
million, but they may not stay that way for long. "I see our prices doubling
again," predicts CEO Stephen Phinny. "I see our floor being somewhere around
$2.5 million, and we have some parcels that I think we’ll get $5 million for."
In fact, Phinny foresees a time in the not-so-distant future when prices at
Saguaro Ranch will be the highest in the state. "I can’t say that with absolute
certainty," he demurs, "but in terms of a consistent amount of high-priced
properties available, Silverleaf might have one property for $6 million, but
we’ll have 10."
Phoenix
While Scottsdale and Tucson are embracing high-end,
single-family communities, Phoenix has taken the urban road with mid- and
high-rise condominium towers. When it comes to new single-family resort
communities, the city’s three most notable ones—Verrado, Vistancia and
Quintero—are not even within city limits. Verrado is the brainchild of the highly regarded DMB Realty, and it is located a
relatively short distance away in Buckeye. With prices ranging from $300,000 to
roughly $2 million, Verrado looks a lot like its Scottsdale cousin DC Ranch did
in its infancy.
Vistancia’s Blackstone Country Club, meanwhile, calls North Peoria home and includes custom homesites alongside predesigned models. Its first release of 39 lots (priced from $300,000 to $1 million) happened in 2006, and its next release of some 50 parcels is scheduled for late this fall.
Finally, Quintero Golf and Country Club features courses designed by Rees Jones and Greg Norman amid its 828 acres near Lake Pleasant in Peoria. At completion, Quintero will have about 283 custom, semicustom, condominium and predesigned homes, the last of which are designed by architect Bing Hu. Custom homesites range from $475,000 to $1.75 million, although resale lots are available for less.Resources
Baraca Estates
480.315.3440, www.thebarongroup.us
Blackstone Country Club (at Vistancia)
800.617.5301, www.blackstonecountryclub.com
Esperanza at Pinnacle Peak
480.600.9449, www.esperanzaatpinnaclepeak.com
Martha Briggs
520.240.8006, www.marthabriggs.com
Campbell Cliffs, www.campbellcliffs.com
DC Ranch, 480.515.0148, www.dmbrealty.com
Desert Mountain
800.322.0044, www.desertmountain.com
Exclusive Properties of Arizona
480.363.0175, www.dawndickinson.com
Four Seasons Residence Club Scottsdale at
Troon
North, 480.513.5224,
www.fourseasons.com
Long Realty Company
520.888.8844, www.longrealty.com
Magee Custom Homes
480.488.0090, www.mageecustomhomes.com
Mirabel, 480.595.2545, www.mirabel.com
One Scottsdale, 480.515.0148, www.dmbrealty.com
Pima Canyon Estates
520.577.0200, www.pimacanyon.com
Privada, 480.473.7711 (Coldwell Banker Residential Brokerage), www.privadapinnaclepeak.com
Quintero, 888.417.8468, www.quinterogolf.com
Saguaro Ranch, 520.498.2300, www.saguaroranch.net
Sandra Wilken Luxury Properties
888.596.0001, www.sandrawilken.com
Sereno Canyon
480.348.1118, www.serenocanyon.com
Silverleaf, 480.515.0148, www.dmbrealty.com
Stone Canyon, 520.219.9000, www.stonecanyon.com
Stone House
520.625.6366, www.stonehouseaz.com
Verrado, 480.515.0148, www.dmbrealty.com
Whisper Rock Estates
480.575.8600, www.whisperrock.com