You've heard it about Austin, Puerto Rico and, now, Arizona: the newfound ability to work from anywhere is pushing moves from big cities to previously off-the-radar locations, and setting local real estate markets aflame.
Paradise Valley, an Arizona city of around 14,000 people, has found an influx of ultra wealthy buyers in the process. For those of you who are "Yellowstone" fans, it also shares its name with the hit show's much-tussled over Montana area.
While the Phoenix suburb was always known as a luxury golf and resort destination, the pandemic has brought with it an influx of wealthy out-of-state buyers from New York and California.
"Our mainstream client probably had a net worth of $50 million about three years ago," Rich Brock, the founder of Paradise Valley-based homebuilder BedBrock Developers, said in a recent Wall Street Journal feature on Paradise Valley. "Now, it's definitely over $100 million, and a good handful are over half a billion."
Why Are People Moving To Paradise?
The motivation for moving outside a major city often follows a similar storyline — the pandemic allowed people who were formerly coming into the office to switch to work remotely.
And in doing so, they realized that their money could buy a larger home in a more tranquil (and often, warmer) destination.
"We were looking for something less busy," Samantha Dollard, a mother of three who with her husband recently traded in her 2,700-square-foot home in San Francisco, worth $3.25 million, for a 5,800-square-foot home in Paradise Valley for $2.875 million, told the WSJ. "We were looking for more space. We were looking for more peace."
What's This Doing To Locals?
While this trend is often presented as a "discovery journey" for an upper-middle-class family from San Francisco or New York, the flip side is that it can uproot local real estate markets and price locals out of places they've lived in for generations.
In Paradise Valley, a median-priced home has doubled in price over the last three years and now lists for over $5 million. The median sales price has skyrocketed 41% from 2020 to $2.175 million.
While Paradise Valley has long been established as a luxury destination, the impact in places like Hawaii and Puerto Rico is staggering.
Amid an influx of wealthy buyers from out-of-state making all-cash offers, the cost of a single-family home on the Hawaiian island of Oahu rose from $872,500 to $1,050,000 in one year alone. Meanwhile, the state's median household income is just $74,534.
