Phoenix is in the midst of a condominium building boom.
New high-rise developments are going up from downtown Phoenix northeast to Kierland near the Loop 101. New urban-style attached homes can be found from midtown and uptown to the Biltmore area and east to the Arcadia neighborhood.
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.
“Condos are gaining market share in the Phoenix area, selling in larger numbers and seeing higher prices,” said Mike Orr, real estate analyst with the Cromford Report.
Location, location, location
Millennial Sean Coleman has always been keen on the urban lifestyle and bought a condo in Tempe when he went to Arizona State University. He still owns that home and is buying another condo at Contour on Campbell near the Biltmore area in Phoenix, where prices start in the $300,000s.
“I’ve always lived in condos or apartments and prefer urban living,” said Coleman, director of technology at Drawbackwards. “I never had a desire to live in a big house and accumulate stuff. I am more interested in collecting experiences than physical possessions.”
Condo prices in Phoenix vary greatly. Prices in the Optima Kierland towers under construction top $1 million, while new condos in downtown Phoenix’s en Hance condos next to Margaret T. Hance Park start at $235,000.
Downtown Phoenix, which went without any new housing for decades, now has new high-rise condo projects planned on several prime corners.
At Portland on the Park, a 149-unit project on Portland Street and Central Avenue, 75 percent of the condos have sold. Prices start in the $400,000s and top out at $1.3 million.
“Our first residents are a part of a movement writing the next chapter in a more connected, more robust downtown Phoenix,” said Portland on the Park developer Tim Sprague, principal of Habitat Metro.
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.
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 are helping people sell homes farther out and move closer in.
The right location
But not every Valley condo project is drawing buyers at the rate developers had hoped. Experts attribute the slack sales in those cases to location and pricing.
“Attached projects dominate the landscape in many parts of the Valley, but the reality is that about one in five infill projects is selling really well and others are struggling,” said real estate analyst Jim Belfiore of Phoenix-based Belfiore Real Estate Consulting,
Condo projects close to shopping, restaurants, jobs, freeway and light rail are drawing the most buyers.
“Behind the Valley’s infill growth is a trend toward people wanting to live near places they can interact with their neighbors more,” said Arizona real estate analyst Mark Stapp, director of the Master of Real Estate Development program at ASU.
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.
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