Premium Properties Carry Pricing Premiums
Posted on April 6th, 2008 by Jonathan Dalton
While everyone’s needs are somewhat different, there’s a definite pattern in the type of real estate property most Canadian buyers are trying to find here in the Phoenix area:
A home in a gated community. A property with a view of some type - a golf course or water or the mountains and quite possibly on the golf course itself. Something in a “good” area (which legally I can’t determine - Fair Housing Laws have been covered in the past here). At least 2 bedrooms and 2 bathrooms. No less than 1,400 square feet.
And all of this usually priced for $200,000 or less.
There are townhouses and condos available below the $200,000 mark but let’s take a closer look at the requested property …
- Gated community - these properties, rightly or wrongly, sell at a premium because of the perceived safety of the area. Anyone sufficiently determined to do so can overcome the gates, but that’s a different topic for a different day.
- A property with a view - again, a home with a view is going to be inherently more valuable than a home without.
- Golf course or lakefront property - once again, these are premium properties whose prices will be higher than equivalent homes not located on a golf course or along one of our many man-made lakes.
Location is the final factor. Scottsdale seems to be the location of choice but Scottsdale is among the highest price real estate markets in the Phoenix metro area. Premium type properties simply don’t exist in Scottsdale for $200,000 or less.
This shouldn’t be a foreign concept (pun only slightly intended); real estate is not that different between Canada and Arizona. For those readers in Calgary, do you not expect prices in Lake Bonavista or McKenzie Lake to be different than other parts of the city? Do homes on the water not carry a significant premium compared those that are not?
There’s one underlying concept that may seem crass but needs to be said. I only get paid if I find the property you’re looking for and you successfully purchase that property. There’s nothing in it for me to hold back and not provide information on listings that meet your criteria.
Some Canadian buyers become frustrated when the listings they request don’t match the homes they envision. Nine times out of ten this happens because of the price. Yes, the real estate market here is slower than it has been in the past. But the myths of homes selling for 50 cents on the dollar are just that - myths.
Premium properties hold their value because the uniqueness of the property remains in both good markets and bad. If you’re going to look for these type of homes, it helps to come into the search with the proper expectations.
Do that and I’ll take things from there.
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I think the price of selling house depend on location attractiveness. Houses in bigger cities cost more than houses in country side. Or cottages near by lakes cost more than cottages in forest. As we know people like more to buy property in nice surrounding areas. It influences demand for houses in these areas. That is why houses in big Canadian cities increased that much. And after that the demand for those houses descended.
It’s not just Canadians with high expectations for low dollars. I get this all the time from out of state buyers looking for bargains around Tempe. And they want a “good” area :). We both end up frustrated.
Hi Jonathan,
These types of properties are available, if one is willing to buy in Pinal County/Queen Creek/Coolidge area. This is not an issue for those who are buying a second home and are not concerned with being closer to ‘town’. For those who want to be close to or in town, well, you’ve already covered it.
Excellent post and well said, friend! I get buyer frustration on these points all the time too. Although, if the Canadian buyers in question are OK with 10 year old cabs & counters, send ‘em to me and I’ll place them happily in the Pointe Tapatio at the $150k mark. Referral fee to you of course. I wouldn’t slight my favorite west side guy.
I won’t tell Chris Butterworth you said that. …