A NASCAR driver, co-founder of a mortgage lender, interior designers, a former U.S. Senate candidate and Arizona restaurateurs were among the buyers and sellers of metro Phoenix’s priciest home sales in early April.
$10,400,000
Dark Wash LLC paid cash for a 7,375-square-foot home in north Scottsdale’s Silverleaf community. The house with four bedrooms and 6 ½ bathrooms is located on almost five acres. It comes with an office, a game room, an exercise room, a butler’s pantry, a 1,000-bottle wine cellar, a wet bar and multiple fire pits outside. The Stuart Living Trust sold it. Tracey Gray of Russ Lyon Sotheby’s International Realty had the listing.
$6,800,000
Saguaro 65 LLC paid cash for a 7,000-square-foot Paradise Valley home with six bedrooms and 5 ½ bathrooms. The house with views of Mummy Mountain comes with rustic wood-beamed ceilings, two kitchen islands, a bar, a wine room, a state-of-the-art movie theater, an outdoor putting green and a fire pit. The John and Christina Kresevic Trust sold it. He co-founded JFQ Lending.
$6,495,000
The Lynch Family Trust paid cash for a 7,538-square-foot Paradise Valley mansion with four bedrooms and six bathrooms. The house includes a lounge bar, a wine cellar, a library, a huge movie theater, a kitchen with dual dishwashers and quartz countertops, a yoga room, and a primary suite with a fireplace and two bathrooms. James Lamon, founder of DEPCOM Power and former U.S. Senate candidate for Arizona, was the seller.
$5,983,320
Brenda and Christopher White paid cash for a Paradise Valley home near Mummy Mountain. The house wasn’t listed for sale. Baja Rosewood LLC, led by NASCAR racecar driver Casey Mears and his wife Trish, sold it.
$5,000,000
Garrett Loomis and Eric Jimenez, owners of Busted 2 Bangin Home Décor, bought a 6,938-square-foot home in north Scottsdale’s Estancia community. The European countryside-style house with four bedrooms and 5 ½ bathrooms overlooks the ninth hole of a golf course and has views of Pinnacle Peak Mountain, several patios and an outdoor fireplace. The Patricia Taylor Trust sold it.
$4,822,335
Arizona restauranteurs Mark and Lisa Shugrue paid cash for a 4,526-square-foot house in the Phoenix side of the Arcadia neighborhood. The couple owns restaurants in Sedona and Lake Havasu. Their Phoenix home has five bedrooms, 4 ½ bathrooms, views of Camelback Mountain, Italian marble countertops, a secret pantry, a gym, an office and a backyard with a heated pool and space for a sports court. Joseph and Lindsey Dies were the sellers.
Reach the reporter at catherine.reagor@arizonarepublic.com or 602-444-8040. Follow her on X, formerly Twitter: @CatherineReagor.
A new community in Surprise will sprout 795 homes with prices starting in the high $300,000s.
Meritage Homes’ 227-acre development called Paloma Creek will also have the biggest amenity center it has built so far, with a pool, an outdoor kitchen, a playground, a fire pit, a basketball court and fitness and community centers.
Located near West Happy Valley Road and 163rd Avenue, the community’s houses will range in size from about 1,200 square feet to more than 3,000 square feet. Prices range from $380,000 to about $450,000.
Homes are under construction and models are open in Paloma Creek. Sales started last month.
The median home price in Surprise is $445,000, according to Realtor.com. Metro Phoenix’s median price is $430,000.
“Paloma Creek offers homebuyers well-appointed, energy-efficient homes at an affordable price,” said Jamie McAndrew, vice president of sales for Meritage in Phoenix. “We look forward to welcoming buyers to the community and helping them achieve their goal of homeownership.”
The houses will include spray-foam insulation, Low-E windows, air infiltration systems and ENERGY STAR-certified appliances.
New homes are drawing more Valley homebuyer attention because of the short supply of existing houses. Also, many home builders offer mortgage-rate buydowns for buyers.
Reach the reporter at catherine.reagor@arizonarepublic.com or 602-444-8040. Follow her on X, formerly Twitter: @CatherineReagor.
Generations of consumers have embraced homeownership as part of the American dream. Lately, though, it looks more like a pipe dream.
“Housing is becoming a luxury good,” said Christopher Mayer, a Columbia University economist.
The upside? It’s a great time to rent. The spiraling costs of homeownership have turned the perennial rent-vs.-own equation on its head. In most of the nation’s largest cities, renting is now far cheaper.
The median sales price for existing homes rose more than 40% from early 2020 to mid-2022, to a seasonal peak just above $400,000, according to the National Association of Realtors.
Prices are still rising: The median sale price for an existing home was 4.4% higher in December 2023 than in December 2022.
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Mortgage rates, meanwhile, are twice as high now as in early 2022: 6.8%, as of mid-February, compared to just over 3% at the start of 2022.
Taken together, those two trends yield frightening math.
Rising mortgage rates should have pushed home prices down. They didn’t
Imagine you bought a $400,000 home, and you made a 20% down payment.
At 3.2% interest, your monthly principal and interest on a 30-year mortgage would have totaled $1,383, according to a Bankrate mortgage calculator.
At 6.8%, the same mortgage would cost you $2,086.
“It’s the least affordable housing market in recent memory,” said Daryl Fairweather, chief economist at Redfin.
Rising interest rates slowed the upward march of home prices, even leading to small declines in some months. Yet, the seller’s market has endured. Here are some reasons:
- Developers haven’t been building enough new homes to keep up with demand.
- The covid pandemic and remote work boom seeded even more demand, as workers sought larger homes.
- Homeowners with historically low mortgage rates don’t want to sell.
“It’s kind of the perfect storm, if you’re a consumer,” Mayer said. ‘“Perfect storm’ in a bad way.”
Homeownership has long been regarded as a rite of passage
The prohibitive costs of home purchase are reshaping common wisdom about the merits of homeownership.
Americans have long regarded home ownership as a rite of passage. Roughly two-thirds of Americans own homes. Many households count their home as their main asset.
Lately, however, the rent-or-buy calculus has favored the renter.
Many factors go into the equation.
Potential buyers consider how long they’re likely to stay in the home, how much money they can leverage as a down payment, how much interest they’ll pay on the mortgage, and whether the home is likely to increase in value.
Potential renters factor in current rental rates, whether rents are likely to rise, and the costs of rental insurance.
In a typical housing market, a home purchase might make sense for anyone who expects to stay put for, say, five years. That’s enough time to make a dent in your mortgage, building equity in the home, and for its market value to rise. Sell a home after five or 10 years, the theory goes, and you’re likely to profit.
That equation might still work. Yet, housing prices have climbed so high that many potential buyers can’t afford the investment.
“For a lot of people, it’s not an issue of choice,” Mayer said.
In the current housing market, renting looks increasingly attractive.
A 2023 analysis by Realtor.com found that renting was cheaper than buying in 47 of the 50 largest metropolitan areas.
In Austin, Texas, the monthly cost of buying a starter home was $3,946, the analysis found. That’s more than twice the monthly cost of renting, $1,670. The monthly savings: $2,276.
The report found just three metro areas where it remained cheaper to buy: Pittsburgh; Memphis, Tennessee; and Birmingham, Alabama.
A housing expert goes from owner to renter
Elizabeth Renter, a senior writer at NerdWallet who studies home prices, ran the numbers in central Durham, North Carolina, for an upcoming move. She decided to rent.
A Realtor.com rent-or-buy calculator shows home prices averaging $550,000 in central Durham. A home at that price would cost about $2,868 in monthly principal and interest, assuming a 20% downpayment and 6.8% interest. Rents in central Durham average around $1,700 a month. Renting is the cheaper option.
“I’ve never lived in Durham,” she said. “I don’t know if I want to stay in Durham long-term. So, I’m not ready to buy a house in Durham.”
Renter is selling her home, a Victorian fixer-upper in Kansas. She’s tired of fixing things.
“I’m going to love calling the landlord when something breaks,” she joked.
Rents are rising in America, just like home prices, but not at the same pace.
Rents averaged $1,958 nationwide in January, up exactly one dollar from December, according to a NerdWallet analysis.
Rents are 29% higher now than before the pandemic, NerdWallet reports.
But economists don’t expect a big spike in rents in the months to come. One reason: A surge in construction of rental housing.
“We have seen rents slow in recent months,” said Danielle Hale, chief economist at Realtor.com. “So, for people who are renting, you can take advantage of the fact that your rent may possibly go down. More possibly, it will stay fixed.”
Will the housing market ever go down?
Homeownership won’t become more affordable, economists say, without a steep decline in interest rates, home prices, or both.
Economic forecasts suggest mortgage rates might ease later this year, following a series of predicted rate cuts by the Fed.
“There is almost complete consensus that rates will come down,” said Matt Vernon, head of consumer lending at Bank of America.
Home prices are likely to remain high, largely as a matter of simple supply and demand: The pickings are slim. Sales of existing homes bottomed out in 2023, as the nation’s homeowners refused to budge.
Many homeowners refinanced their mortgages at historically low rates, before and during the pandemic. Most mortgage holders now have interest rates of 5% or lower. Home equity stands near historic highs.
“Unless you have to sell, you’ll just stay put,” said Odeta Kushi, deputy chief economist at First American Financial Corporation.
Rent or buy?The gap is narrowing for affordability in the US
Roughly two-fifths of American homes are owned free and clear, Kushi said, unencumbered by a mortgage.
“The nuance there is that a lot of those homes are owned by the baby boomer generation,” she said. “Will they move at this point? Maybe not.”
Daniel de Visé covers personal finance for USA Today.