By Angela Gonzales | Phoenix Business Journal
Land prices are through the roof in some of the Valley’s luxury residential markets, according to research conducted exclusively for Phoenix Business Journal.
Looking at land prices over the past three years, J. Andrew Turley, president of Phoenix Valuations, found land prices doubled in Paradise Valley and the Arcadia area of Phoenix for parcels that were 2.5-acres and smaller.
“It all comes down to the same tried and true fundamentals; inbound migration of the wealthy and local job economy,” Turley said. “Paradise Valley and the surrounding market area of Scottsdale and Arcadia is the No. 2 destination for the ultra wealthy migration patterns, second only to South Florida and Miami.”
The Paradise Valley market has become a national and international magnet for homebuyers, Turley said.
In 2023, vacant lots in Paradise Valley sized smaller than 2.5 acres sold for an average of $3.18 million, compared with $1.52 million in 2020, Turley said.
The number of days on the market in 2023 for those lots was 113, compared with 167 days in 2020.
With an increase in land prices comes an increase in home prices.
“When you are paying $3 million-plus for a good lot in Paradise Valley, it changes who can buy,” said Rod Cullum, president of Scottsdale-based Cullum Homes custom home builder. “The starting price of a new home in Paradise Valley on an acre has jumped to $10 million-plus. It was just a few years ago that $5 million would buy a new home on an acre in Paradise Valley.”
Paradise Valley plot sells for $42 million
Scott Grigg, owner of Grigg’s Group Powered By the Altman Brothers luxury brokerage, has a front-row seat in seeing how rising land prices drive up home prices.
“Our cost to build remains relatively the same,” he said. “However, the land costs have doubled over the last year, which is increasing the overall pricing. As a buyer, you’re looking at a minimum of $3.5 million for a flat 1-acre lot with a view in Paradise Valley.”
In December 2023, Grigg sold a 2.98-acre vacant parcel in Paradise Valley for $3.399 million, representing the fourth time he has sold that vacant lot.
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