Market Update February 24th, 2025

The real estate market is no longer performing as a single, cohesive entity, as the luxury sector has become increasingly disconnected from the affordable and mid-range markets, which make up the majority of transactions. While the overall market may exhibit trends of stagnation or moderate growth, the high-end sector continues to experience rapid appreciation and increased activity. This divergence is particularly evident in the super-luxury markets, where transaction volumes and sales prices have surged dramatically in comparison to other segments. Understanding these disparities is crucial for accurately assessing market dynamics and investment opportunities.

A prime example of this trend can be seen in three key ZIP codes—85253, 85255, and 85262—where the majority of super-luxury homes are located. Between January 1 and February 23, 2024, there were 220 closed listings for single-family detached homes in these areas, with a median sales price of $1,500,000 and a total dollar volume of $445,615,952. In the same period in 2025, the number of closed listings increased to 247, while the median sales price rose to $2,015,000, and total dollar volume skyrocketed to $673,982,723. These figures indicate an overwhelming influx of capital into the super-luxury segment in just a short span of time.

The year-over-year growth statistics further highlight this market disparity. Unit sales in these ZIP codes increased by 12.3%, while dollar volume surged by 51.2%. The median sales price rose by 34.2%, and the average sales price followed closely with a 34.7% increase. Additionally, the total square footage sold grew by 33.1%, while the average price per square foot climbed by 13.7%. These numbers clearly indicate that the high-end market is thriving, significantly outperforming the broader market, which has not experienced such extreme appreciation. The stark contrast suggests that wealthier buyers are pouring substantial amounts of capital into luxury properties, reinforcing the gap between market segments.

The most striking takeaway is that nearly $674 million has been funneled into the super-luxury market by just 247 buyers in these three ZIP codes within the past seven weeks. And this is only a fraction of the high-end sector, as several other ZIP codes—such as 85018, 85259, and 85377—also contain a significant number of luxury properties. This unprecedented capital influx highlights a growing divide in real estate, where the luxury market operates on an entirely different trajectory than the rest of the housing sector. Future analyses will examine how the mid-range and affordable markets compare, but for now, it is evident that the super-luxury sector is accelerating at a pace far beyond the rest of the market.

"Set your goals high, and don't stop till you get there."
-Bo Jackson

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