SPRING 2023 DESERT MOUNTAIN REAL ESTATE REVIEW

Joanne Klonoski

Desert Mountain real estate once again bucks national trends as home prices continue their upward momentum. The average price of homes sold rose 28% to $684/SF as of year-end 2022 from $536/SF the prior year. The average sales price of a home in 2022 increased to $3,008,644 from $2,592,909 in 2021. However, nationwide, the news was not as positive. Existing home sales throughout the country slumped for 10 months in a row in 2022. Investment gurus such as Goldman Sachs and Barron’s Financial have predicted a fall-off in Phoenix home sales of up to 13%. Mortgage rates have doubled in the last fourteen months, further stressing demand for homes.

To understand the market, we turned to Keith and Kirk Marshall, twenty-year veterans of the Desert Mountain office of Russ Lyon Sotheby’s International Realty, to get their take on our community.

Aptly known as the Marshall Brothers, the two have witnessed good times and more challenging times in Desert Mountain real estate. Over the last few years, we’ve all seen the surge in demand for Desert Mountain properties as people sought to relocate to more secure, less urban areas, with strong infrastructure and a wide range of amenities. Homes went under contract at times with only a Facetime tour, with inspections waived. “The frenzy we saw in the months following the pandemic has definitely calmed down,” said Kirk. “It’s a more balanced market.

That being said, the right property on a good lot can move very quickly.” “An agent in our office recently listed a great house that included furniture and a membership.” continued Keith. “Multiple offers were received within days at well over asking. Offering a home ‘turn-key,’ with furnishings, art, AND a membership is a real game-changer. No one wants to wait seven months for a sofa and ten months for a rug.”

While well-located homes with functional floor plans on good lots command high prices, the market for older homes with little significant renovation and lesser views can be much slower. Sellers of those homes may well experience longer days on market and downward pressure on pricing.

According to the Marshall Brothers, the typical buyer doesn’t have an appetite for renovating an

“HISTORICALLY,

HAS AVERAGED ABOUT 10%, OR 190 HOMES, ON THE MARKET AT ANY ONE TIME. WITH 100 HOMES LISTED CURRENTLY, THAT’S STILL AN EXTREMELY TIGHT MARKET.”KEITH MARSHALL older home with an outdated floor plan. Supply chain issues and labor shortages, combined with rising materials prices, have dampened enthusiasm for extensive remodels. “Buyers don’t want to wait,” explained Kirk. “They want to move in right away and begin enjoying the Desert Mountain lifestyle.”

Homes available for sale have tripled year-overyear, from an all-time low of 37 on February 24th, 2022 to today’s level of 100 homes.

Has this increased inventory moved us to more of a buyer’s market? “Not at all,” said Keith. “There are approximately 1,900 homes in Desert Mountain. Historically, Desert Mountain has averaged about 10%, or 190 homes, on the market at any one time. With 100 homes listed currently, that’s still an extremely tight market.” As constraints on inventory continue, the number of home sales has decreased 45% in 2022, falling to 137 from 249 in 2021. What about mortgage rates? Will rising interest rates impact demand for homes in Desert Mountain? “It really doesn’t affect us,” assert the brothers. “By far the majority of our offers are all cash. Stock market fluctuations have much more impact and can introduce uncertainty into a buyer’s decision to buy a home.”

There were 79 lots sold in 2021, and 77 in 2020 but only 32 in 2022. “Right now, the number of lots offered for sale is well below historic levels,” affirmed Kirk. “And the quality of the inventory varies widely. The best lots definitely demand high prices.” There is only one lot listed in the MLS below $450,000, with the most costly at $5.9 million. The average asking price for a lot stands at $1,361,000. “Costs of construction, including both labor and materials, are quite high,” reported Keith. “Plus interest rates on construction loans have risen dramatically over the last year,” adds Kirk.

According to Don Berg, HOA Architectural Review Manager, 46 homes were completed in 2020 and 40 in 2021. This fell to 29 new homes that came on line in 2022. Two hundred sixty-eight vacant lots remain, including view lots owned by neighboring homeowners.

The Master Association Board projects a slowdown in new construction as the supply of buildable lots dwindles. It is this concern that has led the Board to propose a 0.50 basis point fee on home sales in order to fund increasingly expensive infrastructure upkeep.

How do the Marshall Brothers view this proposal?

“All the other high-end communities in the area charge a similar or higher fee. We’re talking Silverleaf, DC Ranch, Whisper Rock, Mirabel.

What’s the alternative? To raise dues? The quality of the infrastructure, the quality of the homes, and the quality of the Club all work together and support each other to create the Desert Mountain we have today. If one side of that pyramid weakens, the value of all our homes will suffer.”

While they might not enjoy the fame of real estate’s other identical twins, HGTV’s The Property Brothers, Keith and Kirk have been a force in Desert Mountain real estate for over twenty years and have sold over $975 million in real estate. But real estate wasn’t their first vocation. Keith joined the Arizona Cardinals football team as a sales executive after graduating from Arizona State, while Kirk spent seven years in various capacities with the Phoenix Suns.

Keith was the first to join Russ Lyon Sotheby’s International Realty, with the enviable job of traveling the country promoting Desert Mountain. His responsibilities included entertaining clients at a number of prestigious events, including the Pebble Beach Pro-Am. Kirk joined the company a few years later and the Marshall Brothers’ team was born. Their secret to success is simple: “We stick to the basics, show up on time, answer our phones, return emails in a timely manner and treat clients like family.” Sounds like a formula that works!