Chicago and Florida residents Gabriela and Dragos Sprinceana are currently building a $ 35 million mansion in Phoenix, Arizona. Courtesy of Dragos Sprinceana Young, wealthy people are increasingly choosing to take root in Phoenix. Transplants get more house for their money and enjoy summery weather all year round. “Why go on vacation here when you can live here?” Said a real estate agent. Check out Insider’s business page for more stories. In a golf community in the canyons north of Phoenix, Dragos Sprinceana is building a 20,000 square meter mansion on a mountain top. The 42-year-old CEO of Shipping Logistics, who already lives in Boca Raton, Florida and Chicago, initially saw the sun belt as a professional opportunity. He has big plans to grow his company, GoldCoast Logistics, into a low-cost, warm-weather state teeming with new businesses, executives, and new remote workers. Then, Sprinceana said, he saw hedge funds buy real estate in the nearby Phoenix suburb of Glendale and had a revelation: the state is not only good for its bottom line, but also for families. “Pictures don’t do it justice,” Sprinceana said of his $ 35 million home under construction during a phone call with Insider about a yachting vacation in the Bahamas. The home – on 7 acres in Silverleaf, a prestigious new money gated community with a golf course that has an entry fee of $ 200,000 – won’t be ready for another year. But Sprinceana, wife Gabriela, and baby daughter are already making a big bet on Arizona, as are the 129,558 new residents who moved to the state between July 1, 2019 and July 1, 2020 (the latest period for which population data was recorded available). GoldCoast is also just one of the dozen of companies and startups from Amazon to DoorDash that have recently gained a foothold there. Young, affluent people are increasingly choosing to take root in Arizona, a sign of demographic change that is challenging the state’s longstanding reputation as a haven for retirees. The capital, Phoenix, in particular, the fifth largest city in America with a population of 2 million, has attracted repatriates from coastal and Midwestern cities looking for a cheaper, more relaxed life. There are quite a few lures out there: you can get more house for your money, benefit from working anywhere, and enjoy summery weather year round. Average July temperatures of 106 ° F make Phoenix physically hot, but its trendiness is a decade in the making. In fact, data from the US Census Bureau showed that Phoenix experienced greater population growth than any other American city between 2010 and 2019. The capital, as well as its cactus and palm-filled suburbs of Scottsdale (where Silverleaf is located) and Paradise Valley, was already booming as a hotspot for poolside bachelorette parties and outdoor holidays in national parks. And that was before the coronavirus pandemic opened the gates for many to reassess their life situation. Why live in a dense, cold metropolis when you can feel like you’re on vacation all the time? This Scottsdale house is on the market for $ 3.5 million. Century 21 Toma Partners Listing This shift in mindset about the best places to live has fueled homebuyers like Sprinceana, who have been trying to break into the Phoenix area. The competition for the scarce number of available apartments has caused property prices to skyrocket. Buyers fight each other in bidding wars and pay over the asking price, and houses, even at luxury prices, are blown off the market in record time. Here’s a look at who exactly is turning the desert into its post-pandemic paradise, and the ramifications of this insane attack on Grand Canyon State. Who’s Coming and Why “My clients aren’t retirees,” Stacy Dragos, a realtor at Century 21 in Peoria, a town 25 minutes northwest of Phoenix, told Insider. She added that her buyers included tech entrepreneurs and doctors, and that they came from major cities across the country, from New York to Miami and Chicago. Resettled Californians in particular make up a large portion of the new locals, according to Frank Aazami, a Sotheby’s broker who has been in the Scottsdale market for over two decades. Chandler, Ariz., Mortgage advisor Kirk Brewer, who is helping new Phoenix residents finance their purchases, started a California to Arizona Facebook group last year. The online community has since attracted 2,700 and growing members who show their compassion and offer tips on how to best settle in Arizona. “We have people who come here in droves,” said Brewer, a native Californian who left for Arizona 20 years ago. Another look at the $ 3.5 million offering in Scottsdale Century 21 Toma Partners lists newcomers in three main industries: finance, oil and technology, Aazami said. The proliferation of teleworking has also encouraged entrepreneurs and executives to move away from traditional centers and companies are starting to follow the talent. Home buyers are drawn to Arizona’s lower taxes, bigger homes, and bigger lots, Dragos said. Newcomers are buying second homes and land, and building both residential and commercial properties in the Phoenix area, she added. Demand is so strong – and the number of homes for sale so few – that buyers are buying property unseen, Dragos said. Sometimes she doesn’t have time to visit the houses in person before bidding on behalf of clients. “I can sell houses without seeing them,” she said. Phoenix is the “Silicon Desert” Brewer is an East Valley resident of Phoenix who has earned the nickname “Silicon Desert,” he said. This is thanks to the growing presence of technology companies and manufacturers who have built and expanded locally over the past two decades – and even more so in the past 15 months. Microchip giant Intel is the hub of Arizona’s technology hub, Brewer said, with PayPal, Honeywell and eBay under the brand names with a significant local workforce. Other major employers are device manufacturers and online security companies. A view of downtown Phoenix, which has towers taller than its sprawling surroundings. 4kodiak / Getty Images “We have a lot to offer out here,” he said, highlighting Apple’s huge investments in local manufacturing and Amazon’s new plans for a huge distribution center. Corporations want to move to Arizona for the same reasons they want to move to Texas, Brewer said: It’s cheaper and there’s a lot of work. Meanwhile, new residents are mostly people looking to work remotely, find new jobs, or move within their company, he added. The hippest neighborhoods and the most luxurious homes, Aazami said, newcomers settled in places from downtown Phoenix to more distant oases like Scottsdale, an affluent desert enclave northeast of Phoenix known for its golf courses and resorts, and Paradise Valley, a town in the north of Scottsdale known as Arizona’s most affluent community. Paradise Valley is the “Beverly Hills of Arizona,” he added, with no commercial buildings, 3-acre lots and roads that offer even larger 5-acre lots for deep pocket buyers who crave space and privacy. Also popular is Arcadia, a sought-after, affluent community near Scottsdale that attracts many blue-chip residents. Sprinceana’s new home, Silverleaf, is a new money neighborhood, Aazami added, ideal for young families with children and full of natural regalia like hiking trails and signs of wealth like private jets. A map of the Phoenix area. (Scottsdale, where Silverleaf is located, is in the upper right of the pink stripe.) JonGorr / Getty Images Many shoppers are looking for a resort-like lifestyle, Aazami said, “Why vacation here when you can live here?” or zero-edge pools, space for six deck chairs, swim-up bars, outdoor kitchens and “disappearing” sliding doors for indoor and outdoor living. When the humidity is low and there are no mosquitoes or flies, people are more outside, except in midsummer, he said. There is an active country club scene with plenty of golf courses, horse riding, and polo games. All of this is leading to a frenzied, expensive real estate scene. Newcomers and investors are counting on the house price increases that Phoenix has seen in recent years – especially in the past nine months. Dragos said homes that would have sold for $ 400,000 to $ 500,000 in 2019 would cost at least $ 600,000 this year. In the Phoenix-Scottsdale metropolitan area, the average price of homes sold was $ 376,500 in June – a 10.6% increase from $ 295,000 in June 2020, according to Realtor.com. Silverleaf, Arizona is a posh golf club neighborhood that attracts young, wealthy newcomers. Frank Aazami and Provisuals Media In April, Phoenix inventory declined 28.6% year over year, homes only stayed in the market for an average of seven days before being signed, and the average rent was $ 1,559, up of 13.4% or $ 184 per year over year. In February, 33% of homes in the metropolitan area were sold above list price, compared to 12% sold above list price in February 2020. “It no longer says, ‘Can I make a comparison for you?'” Said Aazami. “They say, ‘What do you want to sell this for?’” Investors are calling for homes to people and institutions trying to join the boom in Arizona, increasing home competition, buying properties for rent or resale. There has been a “significant difference in the past year,” Dragos said, with a larger percentage of her clients looking to buy investment property. Homeowners are looking for more square feet, privacy, and outdoor space, and as a result, the single-family market has been hot. Investors from private individuals to companies like Tricon and Invitation Homes are shifting their money to single-family homes. Triple-net real estate (whose tenants also pay expenses such as property taxes, insurance and maintenance costs in addition to the typical rental and utility payments) also attract investors to housing, along with other income-generating real estate types such as units that are to be listed on Airbnb and Senior. A property in Paradise Valley at the base of Camelback Mountain. David C. Tomlinson / Getty Images Case in point: A Scottsdale home that typically cost between $ 2.8 million and $ 3 million recently sold for $ 500,000, Aazami said. Six bidders fought for the house and tried to sweeten the deal for the seller by foregoing contracts such as appraisals or inspections. The award-winning property – which had no neighbors, a pristine backyard, and views of brick-red Camelback Mountain, a local landmark – is “a pretty special place,” said Aazami. It is indicative of the next generation of Arizonans that trophy houses are “becoming a ‘want to buy'”, he added, “like a Chanel bag.”
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