Sr. Real Estate Reporter Catherine Reagor says the market has come bouncing back in Phoenix, but price is still influenced by buyers who are looking for a bargian whether they’re buying new or used.
When a dozen people camped out to buy a new house in Mesa four months ago, it appeared to be a sign metro Phoenix’s new-home market might soon rebound.
The numbers are in, and it was.
Homebuilding in the Valley has steadily been climbing this year. In June, building jumped to its highest level since 2007.
The long-awaited recovery of the region’s homebuilding industry could finally be underway.
Veteran Arizona housing analysts RL Brown and Greg Burger tracked the recent jump in the new home market. The publishers of the Phoenix Housing Market Letter believe the trend will continue and are working on upping their forecast for homebuilding in metro Phoenix this year.
New-home permits climbed to 1,679 in June, up 47 percent from a year ago. For the first half of this year, new-home construction is 36 percent ahead of 2014’s pace.
Burger told me there has been a definite shift among buyers toward new homes in the Valley, and homebuilders are seeing it with more visitors to model homes and rising sales.
The Mesa development called Mulberry, where the buyers camped out in the spring, was the most popular Valley community for home construction and sales in June.
Blandford Homes sold 13 houses in Mulberry, near Signal Butte and Guadalupe roads, and started construction on another 29.
Metro Phoenix’s homebuilding industry had long been one of the region’s biggest economic drivers until the crash. More than 50 years ago, Arizona developers Del E. Webb and John F. Long launched the Valley as an affordable housing hotspot with the communities Sun City and Maryvale, where homes sold for less than $15,000.
Homebuilding in the Valley peaked in 2006 with 64,000 new homes. The forecast had been for 11,000 houses to go up across the Valley this year, a slight increase from the 10,840 constructed in the area during 2014.
But that forecast was made in January before buyers began lining up again for new homes. A new one will likely be at least 20 percent higher.
In early 2013, it looked like the Valley’s homebuilding market was headed for a much-anticipated rebound when new-home sales and construction started to climb, particularly in Chandler, Mesa and Gilbert. But by August, new-home prices in those cities jumped almost 25 percent, and the market slowed again.
The median price of a new Valley house reached almost $310,000 a few years ago during the started and stalled attempt at a recovery. The median price of an existing house in the region was about $185,000.
Now, the median price of a new metro Phoenix home is about $290,000, according to Brown and Burger. The median price for an existing home in the region is almost $220,000.
Affordability appears to still be the big draw for new-home buyers in the Valley