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Wealthy part-time residents, deep-pocketed golfers and affluent families have quietly transformed north Scottsdale into a luxury-home hub in less than a decade.

Home prices in the 85260 ZIP code, still a relatively affordable part of the sprawling north Scottsdale market, shot up almost 18 percent in 2003 after single-digit gains in the previous four years, according to The Arizona Republic's Valley Home Values report.

The typical house in the area that is split by the Loop 101 and home to the booming Scottsdale Airport commercial hub now costs about $324,000, more than double the median home price for the Valley.

In the city overall, prices increased 10 percent between 2002 and 2003, triple the increase in Mesa.

The increase is even more dramatic considering that a new Scottsdale home sold for $162,000 in 1993, according to the Arizona Real Estate Center. That's a 237 percent jump. Part of that is because a wider variety of houses was being built in the former bedroom community.

Now most of the city's new homes are going up in north Scottsdale, which starts at Bell Road and spans north and east to the McDowell Mountains.

Carol Greenidge moved from Colorado to Arizona in November and closed on a 2,100-square-foot house in DC Ranch in January.

She likes being close to her daughter, who lives in Cave Creek, as well as the freeway and the convenience of nearby shopping, art galleries and restaurants. In Colorado, she drove 20 minutes to Safeway. Here, it's a minute away.

Greenidge, 58, also looked for houses in Grayhawk, Troon and McDowell Mountain Ranch before she bought in DC Ranch.

A psychotherapist in Colorado, she wanted a change of scenery and is looking for a new occupation, maybe something involving art, that doesn't involve clients calling at night.

"The 7-foot blizzard last March 19 had something to do with it," she added. "I was housebound for six days."

Greenidge bought in a Scottsdale area where overall values have been on a roll. The average house overall, new and resale, in the 85255 ZIP that is home to DC Ranch cost $249,100 in 1998. That number jumped to $426,000 last year. The gains came amid a falloff in the number of sales.

There is less land to develop there and in the adjacent ZIP codes, which make up the pricey north Scottsdale market.

And prices are expected to keep climbing as land becomes scarcer. DC Ranch had 1,000 people interested in new neighborhoods before they were publicly announced in February.

Don't expect another wave of large luxury enclaves such as Troon, DC Ranch, Grayhawk or Desert Mountain.

"Supply and demand is driver of the marketplace in Scottsdale," said Ron Coleman of Arizona Land Advisors. "It will continue to be that way for the next 10 years. That equation will continue to drive prices higher."

Coleman noted that Scottsdale is nearly built out and much of the state land in the area is targeted for preservation, pushing prices for remaining land higher.

That means developers who shell out big bucks for land need to build the sort of projects that deliver high returns rather than production subdivisions.

"Scottsdale still has room to grow," he said.

"But we will be more like Tempe and Buckeye. We will continue to grow, but it will be all about quality rather than quantity."

Scottsdale covers 117,000 acres. Developers and investors already tied up most of the vacant land available.

That's one reason why about 1,000 potential buyers are asking for information about some new neighborhoods in DC Ranch months before models open later this year. Brent Herrington, vice president of DMB, said the development company may use a lottery to pick buyers if there's a huge demand.

"We're hoping we don't have to implement that kind of tool," he said. "But it just becomes too much a circus."

Considering the high prices and the Valley's relatively low median income, many wonder who can afford to buy there unless they are selling a high-priced house out of state.

There's a lot of quiet wealth in the Valley. It's not just money from out-of-town buying luxury homes in north Scottsdale.

Valley's million-dollar hot spots spreading out

Paradise Valley and Scottsdale used to be metropolitan Phoenix's million-dollar home hot spots but big-dollar buyers are beginning to spread the wealth.

Buyers are back in the million-dollar market and they're discovering that the house of their dreams might be on a Mesa golf course rather than at the foot of Mummy Mountain.

Five years ago, real estate agents wouldn't have believed a house in Ahwatukee would sell for seven figures. But last year a few did.

Bob and Christine Zamora of Lodi, Calif., paid about $2 million for a 5,300-square-foot house at Superstition Mountain, a golf enclave east of Mesa that takes its names from the nearby mountain range. The couple shopped in such other pricey spots as Desert Mountain, Desert Highlands and Mirabel before settling in the far East Valley near the Superstition Mountains.

They bought the house completely furnished for a quick move-in. Its location will give him a quick drive to the Honda car dealership he's opening with a partner near Superstition Springs Center in Mesa, their 19th dealership in the West.

When the Loop 202 connects to U.S. 60, the Superstition Mountain house will give the Zamoras access to their favorite Scottsdale restaurants. Besides their Lodi house, the couple owns a place in Carmel Valley, Calif., and they have a house and a vacant lot in Oro Valley north of Tucson where they expected to settle before he secured the dealership in Mesa.
 

Median resale price in Paradise Valley Here are the basic rules that may allow you to shelter taxes on home-sale profits: 2003: $897,500 2002: $830,000 2001: $825,000 2000: $815,000 1999: $675,000 1998: $569,000

Bob figures he has bought and sold 15 houses and always looks at their investment potential. He said a similar house in California would cost 20 percent more but the couple still enjoys such amenities as quick access to golf, a dry-cleaning system in the laundry room, fireplaces in nearly every room and a guest house with a minibar and kitchenette.

"I think there's plenty of upside," he said. "Frankly, I'm a businessman. Business people, we tend to look at leisure properties first with a business eye and then with an eye on the amenities."

Sales of houses that cost at least $1 million have climbed steadily in the Valley even as the economy has struggled. There were 570 such sales last year, compared with 433 in 2002 and 380 the previous year.

The million-dollar market tanked after the Sept. 11 terrorist attacks when people such as heads of corporations stopped traveling. Now, the market is rebounding with more sales though prices have stayed somewhat flat with increases of 2 to 4 percent.

What's driving the market? people selling ski properties so they can buy a place on a golf course, lots of second-home buyers but few investors.

It's a strong niche market, million-dollar sales, pointing out that the northeast Valley still dominates but predicting that more big deals will crop up in places such as Mesa.

Realtors. specializes in high-dollar properties, have noticed more big deals outside the northeast Valley luxury nexus. Extended freeways are opening more areas to big houses and big deals.

Some big buyers insist on the prestige address of Paradise Valley and Scottsdale. Others shop the million-dollar market like a couple looking for the best bang for their buck on a starter home in suburbia.

Glen Creno
The Arizona Republic