Low housing inventory spurring demand for new homes in metro Phoenix
As inventory for existing home sales remains low in metro Phoenix, homebuilders are building as fast as they can to keep up with insatiable demand for new homes.
Article originally posted here.
Municipalities across the Valley issued 28,704 single-family building permits in 2020, up 18% from 24,274 in 2019, according to Home Builders Association of Central Arizona’s year-end analysis.
That compares with an 8% increase in 2019, 13% in 2018, 12% in 2017 and 2016 and 44% in 2015, according to HBAC’s data.
Jim Belfiore, founder of Belfiore Real Estate Consulting, said he hasn’t seen new home sales this high since he started the company 15 years ago.
More than 25,000 new homes sold in 2020, a 22% increase over 2019, he said.
“New home sales flattened during the last 60 days, but they were still 23% higher than they were a year ago,” Belfiore said. “With the spring selling season upon them, builders will now grapple with how to supply expected rising spring demand.”
Resale demand also is high, but limited by supply, he said.
“Over the last 30 days, 28% fewer homes sold than sold from mid-November to mid-December, but 14% more sold than sold during the same time a year ago,” Belfiore said, citing Cromford Report data. “Supply is down 13% from one month ago and an astounding 39% from a year ago. Less than one month supply is presently available via the Arizona Regional Multiple Listing Service.”
Resale supply has hit lows not experienced since late 2005, with 9,829 homes currently listed on MLS, he said.
But nearly half of those homes — 4,269 — already have accepted offers, with sellers simply offering the units in an effort to collect backup offers, he said.
Belfiore is a featured panelist in the Feb. 25 panel discussion, Homebuilding in the Valley: 2021 Outlook. Register here for that virtual event.