Why Developers Are Buying Older Homes in Scottsdale and What It Could Mean for Homeowners
Scottsdale Is Rebuilding From Within: Why Developers Are Targeting Properties in 85251, 85250, 85254 & 85260.
If you drive through some of Scottsdale’s established neighborhoods, you’ve probably noticed it: an older ranch home disappears, construction fencing goes up, and a year later there’s a completely new home in its place.
I’m seeing more of this conversation around 85251, 85250, 85260 and 85254, where developers and investors are looking at older single-family homes not necessarily for the house that’s there today, but for the potential of the property underneath it.
And if you own an older home in one of these areas, it’s a trend worth understanding.
Why These Scottsdale Neighborhoods?
It really comes down to something we talk about in real estate all the time: location.
These ZIP codes offer proximity to Old Town Scottsdale, the Greenbelt, McCormick Ranch, Kierland, Scottsdale Quarter, Paradise Valley and the Arcadia corridor. They're highly established areas and amenities already surrounding them.
What they don't have is an unlimited supply of vacant residential land.
So when buyers want a brand-new home in an established part of Scottsdale, there are really only so many ways to create one. Increasingly, one of those ways is to buy an existing property and start over.
The House Isn't Always the Most Valuable Part of the Property
This is where things get interesting for homeowners.
Imagine an original 1960s or 1970s home sitting on a great lot in a desirable Scottsdale neighborhood. A traditional buyer might look at the property and immediately start calculating what it would cost to update the kitchen, replace flooring, remodel bathrooms and modernize the floor plan.
A developer may see something completely different. They are looking at lot size and dimensions, zoning, setbacks, location, surrounding home values and what a newly constructed home could potentially sell for.
In other words, they're asking: What could this property become? That can create an entirely different way of looking at value.
One of the Most Visible Examples
85251 is particularly interesting because there is such a wide range of housing within a relatively small area. You have original Scottsdale homes, extensively remodeled properties, condos and townhomes, newer infill projects and multimillion-dollar new construction all within the same ZIP code.
Location is a major driver. Depending on where you are within 85251, you're minutes from Old Town, Scottsdale Fashion Square, the Greenbelt, Paradise Valley or Arcadia. The economics can become compelling when an older home sits on a desirable lot in an area where a finished new-construction property can command a substantially higher price.
It's one reason I wouldn't automatically assume an older or dated home needs to be renovated before bringing it to market. Sometimes the buyer isn't interested in your countertops at all. They're interested in the parcel.
The Lot Can Be the Opportunity
85254 presents a slightly different opportunity. Many properties here offer something increasingly difficult to find in central Scottsdale: larger lots in established neighborhoods. Combine that with proximity to Paradise Valley, Kierland, Scottsdale Quarter and major employment corridors, and you can understand why builders are investing.
A larger homesite can potentially accommodate the type of home today's higher end new construction buyer wants: more square footage, larger garages, pools, expansive indoor/outdoor living and modern floor plans.
That doesn't mean every older home in 85254 is a teardown. But it does mean that lot size, location and redevelopment potential should be part of the conversation when determining what a property may be worth.
A Location That Can Be Hard to Replicate
85250 is another area worth watching. Its central location puts homeowners close to Old Town, Paradise Valley, McCormick Ranch and the Greenbelt, yet much of the housing stock was built decades ago. That creates opportunities for both renovation and new construction.
You can already drive through parts of central Scottsdale and see the evolution happening house by house: an original home next to a beautifully remodeled property, which may be a few doors down from a completely new build. That's what redevelopment looks like. It doesn't transform a neighborhood overnight. It happens one property at a time.
Scottsdale Is Running Out of the One Thing We Can't Create
Land.
Especially well-located residential land in established Scottsdale neighborhoods.
The City of Scottsdale's own housing planning recognizes redevelopment and infill as part of the area's future growth. As vacant parcels become harder to find, existing properties naturally become part of that equation.
And I think that's one of the more interesting real estate trends to watch over the next several years.
We're seeing established Scottsdale rebuild from within.
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