Phoenix: Infill trend reflected in rising home prices

Home prices are rising fastest in most of Phoenix's central neighborhoods as the area draws Millennials, families and empty nesters who want to be near jobs, schools, light rail and newer entertainment and restaurant hubs.

Vacant infill sites and older homes and buildings have been transformed into new houses, condominiums and popular entertainment and shopping venues in a trend that escalated during 2014. Buyers also snapped up older homes in desirable areas, driving up median prices.

Charlotte and John Shaff bought a house last month near Seventh Street and Glendale Avenue. The couple have two young sons and had been renting in the area so their children could attend school in the highly rated Madison Elementary School District, which spans several north-central Phoenix ZIP codes.

"It's not cheap to buy in central Phoenix now, but everyone raves about the Madison school district," said Charlotte Shaff, whose house is in ZIP code 85020. "We really love the area because the houses are less cookie cutter."

More than 19,000 houses sold across Phoenix last year. Phoenix, the nation's sixth-largest city, recorded by far the most sales of any Valley community and more than doubled Mesa's sales of almost 8,300.

Because of its size, Phoenix also is a city of many housing markets. Its diverse neighborhoods include many of the Valley's most affordable areas, family-friendly mid-range areas and several of the region's most expensive neighborhoods.

"Phoenix as a city has recovered and matured, and so has it's housing market," said Tom Simplot, CEO of the Arizona Multihousing Association and a former Phoenix City Council member. "There's been a reversal of all growth happening on the edges, and now even Phoenix suburbs farther out are seeing more high-density housing developments."

High-end prices rise

Phoenix's north-central ZIP code 85012 has the city's most expensive neighborhoods, plus many new restaurants featuring local chefs that draw people from all over the Valley.

Most of the area's houses stretching up Central Avenue are big, older single-family homes on larger lots. About 15 years ago, buyers wanting to live along the neighborhood's tree-lined streets began tearing down older houses and rebuilding or renovating houses they purchased from original owners. The trend paused with the crash but is back on.

The ZIP code includes many million-dollar properties, including the former estate of Sen. John McCain. The neighborhood's median price is $459,000, the highest for Phoenix and the eighth-priciest in metro Phoenix.

Home prices climbed almost 17 percent last year in ZIP code 85012, more than three times the Valley's overall median price increase.

Some of Phoenix's other high-end ZIP codes include 85018, home to the Arcadia neighborhood that straddles the Phoenix-Scottsdale border; 85016 around the Arizona Biltmore; and 85020, which borders the Phoenix Mountains Preserve.

"I am seeing an incredible interest in the central Phoenix and Biltmore areas," said Bobby Lieb, associate broker with HomeSmart Elite Group. "A lot of sellers in these areas are feeling much better that they have equity in their homes again, and I am seeing multiple offers on homes, which wasn't happening a few years ago."

Anita and Philip Calihan recently listed their longtime home in ZIP code 85020, located on more than an acre near Third Street and Glendale Avenue, for $1.35 million.

"My husband's uncle built the house on a former grapefruit orchard in 1948, but it's time to sell," Anita Calihan said. "Younger people and families are moving to the area again now, and we are ready to move on."

The median price of a house in 85020 shot up 36 percent in both 2013 and 2014.

The Calihans are buying another home in Phoenix's 85016 ZIP code, so they still will be close to friends, family and their favorite restaurants.

Move-up areas thrive

Phoenix has several neighborhoods that attract families and second-home buyers who pay a little more to be close to the desert, good schools, jobs and freeways.

Several of the city's most popular neighborhoods, from Anthem and Desert Ridge in the north to south Phoenix, posted higher-than-average median price increases in 2014.

Anthem, on the far north end of Phoenix off Interstate 17, has grown to become a community of its own. Many big employers are located just south of Anthem in the Deer Valley area, which has made it more popular with homebuyers who want to be near jobs but also the open desert. Located in ZIP code 85086, Anthem's median home price climbed 7 percent to reach $279,000.

Desert Ridge, in ZIP code 85050, is one of the last areas in Phoenix to be developed, and several new-home communities are going up. The area's new-home median price jumped 27 percent to $613,212 in 2014.

Two freeways — Loop 101 and State Route 51 — bisect near Desert Ridge to make the area and its large job hub, shopping and the signature JW Marriott Phoenix Desert Ridge Resort & Spa easily accessible.

Schools are a big draw for move-up buyers in Phoenix.

Ahwatukee, next to South Mountain and the southeast Valley, is part of the Kyrene Elementary School District, which is considered one of the best in the Valley. The area has three ZIP codes: 85044, 85045 and 85048.

Median sales prices in all three ZIPs grew less than 5 percent last year, and the number of sales was down in all three compared with 2013. Still, home values across Ahwatukee have recovered from the crash.

Affordable spots

Many prospective buyers are searching central Phoenix, particularly historic neighborhoods, for houses they can afford.

Prices in ZIP code 85003, home to the Willo historic district, and in ZIP code 85007, where Encanto-Palmcroft and other historic neighborhoods are located, have soared. But more-affordable historic houses can be found in 85006, where the median price is $130,000, and in 85009, where the median is $65,000.

Built by developer John F. Long in the 1960s, the Maryvale area spans ZIP codes 85031, 85033 and 85035. Prices climbed by more than 10 percent across Maryvale last year, as buyers searched for houses costing less than $150,000.

South Phoenix has attracted a lot of new-home developments, and amenities including shopping and golf courses have followed over the past two decades. But the infill area is still affordable, with median home prices below $130,000.