(Source: AZCentral): Catherine Reagor – New houses are going up in the Phoenix area at the fastest pace in 10 years, and prices are climbing faster than they have in five years.
Buyers are again heading to Valley suburbs farther out to find houses they can afford.
All are signs that metro Phoenix’s homebuilding market is recovering.
But it still has a way to go to rebound from the housing crash that left many Valley fringe neighborhoods half-built and blocks of new houses empty for years.
By the building numbers
More than 1,950 new houses sold Valleywide in May, and the pace of sales for the year is 18 percent ahead of last year, Belfiore Real Estate Consulting reports.
May was the best month for new house sales in metropolitan Phoenix since March 2008, according to RL Brown’s Phoenix Housing Market Letter.
Brown reports the median new house price in the Valley is up almost 3 percent from last year to $330,000. That’s about $65,000 more than the area’s median existing house sale price.
Jim Belfiore said demand from buyers in the spring gave homebuilders the confidence to push prices upward at the most significant pace in nearly five years.
He forecast 23,500 new houses will go up in the Valley this year. About 20,550 new houses were built in metro Phoenix last year.
Boom and bust
During the housing crash of 2009-11, only about 10,000 houses a year were built in metro Phoenix.
During the boom years of 2005-06, more than 60,000 new houses went up in the Phoenix area. But that pace wasn’t real, fueled by speculators who put almost nothing down, never planned to move into the houses and wanted to flip them.
If metro Phoenix’s new-home market returned to preboom building levels of 30,000 to 35,000 new houses a year, that would be a healthy recovery, housing market experts say.
Buying farther out
Most of the new Valley subdivisions stretching from the San Tan Valley in the southeast to Buckeye in the southwest were left half-built a decade ago. But they are now full of new houses with buyers living in them.
Buyers got deals on those houses when builders returned to the subdivisions five years ago, but most of the deals are gone.
New-house sales are up about 40 percent in Buckeye, and prices are up at least five percent from last year.
Five of the top-selling new communities in metro Phoenix now are on the area’s southeastern edge in the city of Maricopa, Queen Creek along the Hunt Highway and Coolidge.
Prices start at $170,000 in Homestead Meadows in Maricopa, the second-busiest new Valley subdivision for sales. That’s almost half the Valley’s median new home price.
Forecasts call for homebuilding to steadily climb in metro Phoenix over the next few years. Belfiore expects to see more than 26,000 new Valley houses built in 2020.
But homebuilders and analysts see a few big obstacles in the way of the Phoenix’s homebuilding recovery: rising labor, land and construction material costs.
All three will add to the cost of a new Valley house.
How much buyers will pay for shiny new houses in metro Phoenix’s edge suburbs is the big question.