Good news for Valley homebuilding industry in 2015, report says

Belfiore report

Belfiore reportAfter much delay, good things are on the horizon for the performance of the Valley homebuilding industry, with 2015 predicted to be a big improvement over the last two years if current trends continue, a new report said.

New home sales volumes have increased 25 percent year-over-year over the last 30 days, reaching a level not seen in 18 months, according to the March 2015 edition of its Metro Phoenix Knowledgebase Current & Future Insights Publication, published by Belfiore Real Estate Consulting.

Moreover, new home prices have remained flat while speculative inventory has continued to moderate, contrary to earlier concerns that discounted inventory sales would prompt appraisal issues and new build price drops early in the year, a news release said.

Now, Belfiore Real Estate Consulting optimistically expects prices to remain flat throughout all of 2015; as the report clarifies, “Flat prices are good compared with the 1 percent to 3 percent adjustment previously expected…”

Still, the publication draws attention to a concern: During the last month, the number of active subdivisions has increased much more significantly than expected. Builders now compete for sales from 500 active communities (an 18 percent year-over-year increase) and thus sales gains are not being seen evenly within all Valley communities, the release said.

“Builders offering homes in locations where their competitors are building similar size homes with similar features on similar size lots are not the beneficiaries of the year-over-year (sales) gains,” the release said.

The deleterious effect of demand spread out over many communities is evidenced by the level of sales per subdivision remaining unacceptably low for most production builders.

“Builders now need to focus on the one big, remaining challenge, a challenge that has grown with the community count rising dramatically over the first 2½ months of 2015 − how to increase sales per community,” the release said.

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