Colliers International
Sales activity for land parcels in Greater Phoenix slowed during the first half of this year. This is expected to be a short-term disruption in activity however, as housing starts and commercial construction are both slowly gaining momentum. The strength of the housing market will be the primary driver of land sales activity, as parcels intended for residential uses generally account for at least half of the transaction volume in a given year. After several years of extreme volatility, the local housing market has stabilized and the outlook is strengthening. In addition, local population growth and employment expansion are both outpacing the national rate of growth, stimulating demand for housing in Greater Phoenix. One drag on land sales and new development could be the construction workforce, which contracted severely during the recession and has been slow to bounce back. Developers looking to meet anticipated demand for commercial and/or residential spaces may encounter challenges hiring a sufficient number of qualified contractors and laborers.
