Tricia Covert
Publisher, Arizona Journal of Real Estate & Business

Throughout this Journal issue, our guest columnists offer their opinions and experiences about luxury: the definition, the demand and the trends. When it comes to luxury homes in Phoenix metro, Robert Joffe can definitely add to the conversation. His 16 plus years of experience in selling and listing homes in the local, luxury market has made him a credible resource for buyers, sellers and the industry. Today, it’s common to drive through neighborhoods where Robert works and see many of his signs on the lawns.

I met with Robert at his new office in Old Town Scottsdale where he so willingly shared his knowledge about luxury with me.

Robert, what is your real estate background and why did you decide to move into the luxury home market?
I’ve had my real estate license since I was a junior in college — about 32 years. When I first started in real estate, I founded a company called Home Concepts. It was the first mall-based real estate concept — we sold homes in the mall. This was before the internet took off. Home Concepts was approximately a 1,200 sq. ft. store in several of the major malls where I kept details about each new subdivision and primarily targeted first-time home buyers. The average home price point was about $180,000.

A consumer could come in to see floor plans and photos from all the different builders. We sold about 1,700 homes a year — just in Phoenix metro. I also had the same concept in Las Vegas and Salt Lake City. After I sold the business in 1999, I bought a home in the Arcadia area, fixed it up, had an open house and sold it. From that point on, my luxury home business began and blossomed.

How did you make the bridge from selling lower-end priced homes to luxury homes? How long did it take you?
It was amazingly, pretty quick — about 2 to 3 years. At the time, no one in my “hood” was doing what I was doing. Just having my signs everywhere was a good thing and the fact I was always working the area, full-time, was positive. Back in 2000, there were certainly full-time agents, but it wasn’t as common 16 years ago as it is now. My attitude was that it was very much a business. Many of my friends are also in commercial real estate and they would use my services and refer me. I worked hard in the area where I lived in and knew it like the back of my hand – I became the expert.

I’m blessed to be as passionate about my job today as I was 32 years ago — it doesn’t feel like work to me. My wife has been my support system — it’s really unbelievable to have a spouse like her. We enjoy being part of the community in different ways: Arizona Country Club, Fresh Start Women’s Foundation and Phoenix Children’s Hospital and of course the local schools to name a few of our top choices. I also love to give back to my fellow Realtors. I get calls from Realtors regularly and I’m glad to answer their questions or give them advice. All of this has made a difference.

Can you tell me about the Joffe Group?
My wife came up with our brand. She has been our marketer for more than 23 years and is very involved in the business. We have 8 licensed agents in the Group who are all independent contractors. I have 3 to 4 agents who are my right-hand people; they help me with my listings and showings. The other 5 agents basically use the Joffe Group brand and cultivate their own business. We focus on the Arcadia, Biltmore and Paradise Valley neighborhoods.

What is your sales production?
In 2015, we produced around $122 million. I just reached $1 billion in personal sales from the year 2000 to now — I’m very proud of that.

What are some of your marketing tactics?
I try to do things that others aren’t doing. For example, I advertise my listings at the Harkins Movie Theater in Fashion Square Mall. We advertise a lot within the neighborhoods and sponsor school activities. Lately, we’re getting more into social media, but continue with the essentials like newsletters and direct mail. I also like the Luxury Home Tours and the Arcadia Home Tours. There are a huge amount of good agents on those tours — in one day you can get everyone to see your listings. Even if you don’t have listings, you have to know your marketplace. These tours are a great way to do that. At the end of the day, my signs give me the visibility and my referrals.

Define the Phoenix metro luxury home market?
I think we’re a very trendy city. The Tuscan style was all the rage in the 2000s and now that style is difficult to sell. French country is selling today and modern is as hot as I’ve ever seen it. Although many of the builders aren’t building modern spec homes yet — a couple of builders are starting. I think the modern trend is going to stay around for a long while.

The $1 million dollar home back in 2000 to 2002 was considered really high-end. Today, that price is the low end. I would say the way our prices have skyrocketed over the years, $1 million is the starting point of the luxury home market.

Do you think buyers agree that $1 million defines a luxury home?
All buyers are different. I do think younger buyers, between ages 30 to 35, agree that $1 million defines a luxury home. Many locals in their early to mid-30s are buying $1 million+ homes — and they’re paying cash. Even with interest rates as low as they are right now, there are a lot of cash deals.

In my focus areas, many young families are trying to buy. These neighborhoods are in high demand, so buyers are willing to pay for it. In Arcadia alone, you can pretty much count on spending a million bucks as the entry point if you want to get in the area.

Where are luxury buyers coming from — local, national and international?
We really don’t get many international buyers. Arizona mainly gets more of the local and national buyers: from New York, Chicago, Minnesota, the Midwest and certainly California. This has changed a bit over the last few years. A big portion of out-of-state buyers used to be from California and Canada. Now with the lower Canadian dollar, I’m seeing Canadians as sellers rather than buyers for the first time.

When your clients ask to see a luxury home, do they have a certain idea in mind such as amount of square footage or amenities?
The desire for new homes is higher than it’s ever been. Just 5 years ago, a buyer would move into a ranch style home with 8ft ceilings and live there — no problem. Now, the trend is brand new with the same features: marble, wide oak planks, etc. If it isn’t new, there isn’t a demand for it. I’m in a group of seasoned luxury agents. We’ve come to the consensus that a house is considered “old” if it was built before 2010 — as defined by the marketplace who is essentially the buyer.

The current hot button is a new home between 5,000 to 6,000 sq. ft. with a 700+ sq. ft. guest house. People aren’t wanting the big boxes anymore: 7,000 to 10,000 sq. ft. homes — they’re just too big. Technology is huge. Luxury buyers want to have access to everything automated. Builders wire the houses for technology knowing buyers want to see that it’s prepped for tech systems. That’s one of the main reasons a home is considered “old” if built before 2010.

What features have faded in luxury that were once popular?
Saunas are gone and the steam room is in. Home theaters have faded and walk-in refrigerators are gaining in popularity. Glass walled wine cellars are big — homeowners want to see their wine collection from the dining room.

Some say the luxury home market is a tough seller’s market right now. What is your opinion?
I’m seeing homes priced between $1 million to $4 million sell fine. But, once you get passed $4 million, it’s tough — $10 million is an even bigger challenge. My advice to sellers in the higher-end market is to be realistic with listing prices. There is so much inventory out there at the moment. Often owners have much more into the house than what they can get for it. I really do believe that once one $10 million house sells, others will follow — no one wants to be that first buyer.

What would you tell an agent in the industry who may want to get into luxury sales?
An agent should first join some sort of a team, if possible. I realize it can be difficult to get on a team right now because the market is pretty full. But, if they can find one, it’s best to learn from a team and be a sponge to absorb the information. We don’t hire often — I’m not sure what other teams are doing.

The bigger real estate companies suggest traditional methods such as working expired listings, getting on the phone, etc. — I think the total opposite. I’m a big believer that in order to be successful, it’s a good idea to work where you live. For a new agent, it’s tough to do that because you’re hunting for business. But, I suggest a newer agent move toward working a neighborhood. I live in Arcadia — I know all the churches, temples, restaurants as well as the ins-and-outs of the area.

Open houses are excellent. An agent should find a broker who has a lot of open houses in a neighborhood where they want to work, and sit those homes every day. Agents want to be where people are and they should basically set up their offices there. That was my original concept when I sold real estate in the malls: to be where the people are. Today, I have several open houses every single day.

In luxury, it helps to be a member of a country club or a gym, but it’s definitely not key. If you’re on the golf course all day, you can’t be working. Charity organizations and clubs can help as well — any place where agents are interacting and getting to know people is the key.

What is your opinion for the future for the Phoenix metro luxury market?
We’re going to see better times — the last few years haven’t been great. This year, has been mediocre at best, but we need to get the election behind us. I also don’t see how we can continue with the price points that we have today. How many people can really buy a $2 million to $4 million home? There are hundreds of them in our marketplace. The cost of land alone is so expensive. Land should only be about a third of the cost of the house, but in several areas it costs more than the home.

I’m encouraged by the activity I’ve seen over the last 30 days — it’s really picked up. If this momentum continues, 2017 is going to be a great year.

Luxury Home Seminar

FRIDAY, OCTOBER 21, 2016  –  9:00 AM TO 12:30 PM

Topics include: Property Value Analysis, Market Trends & Cycles, Determining Value, New Contract Changes, Showcasing the Property, Most Desired Amenities, Financing Options, Sellers Share Expectations and Much More.

Advance Tuition: $40   At The Door Tuition: $50

Credit: 3 hrs. Contract Law