Rose Law Group Reporter
At Thursday’s Belfiore Market Update and Roundtable Session, Jim Belfiore, presenting to a select group of housing market leaders, was optimistic, indicating that single family permits for 2015 would exceed even the highest projection made by the market leaders at the beginning of the year. Belfiore has revised their housing permit projection to exceed 16,285 permits this year. Currently, there are 530 active builders in the valley and 2,345 units under construction, including condominiums.
As of the latest Belfiore survey data, Taylor Morrison’s Discovery and Encore at Adora Trails were among the top selling subdivisions followed by Pulte’s Cactus at Desert Oasis. Fulton Homes, Pulte Homes, D.R. Horton, Taylor Morrison and William Lyon Homes were listed as top builders for sales per subdivision. Standard widths of 45 and 55 feet wide are the largest selling product in the market right now. Belfiore talked about Pulte’s Desert Oasis saying that sales were so strong that they would, “release five lots and you will have multiple bids.”
On average (and as is common to the selling season), new home sales per subdivision are slightly down and expected to stay that way until post-superbowl when sales will start to ramp back up. Belfiore suggests that builders start planning for that now as labor shortage will become a factor. He talked about a story relayed to him by the president of smaller (unnamed) builder who, in order to keep their “marble guy” on their job site actually walked up to him and handed him a $100 bill. The sub stayed but that is the kind of competitive market we have now for labor. During the builder discussion segment of the Roundtable, some in attendance suggested that Arizona builders may just need to expect to pay more for labor costs. One homebuilder reflected on the Arizona labor market and how historically we have relied upon various immigrant groups to serve as our construction labor force (Irish, Chinese and most recently Mexican). Because of immigration laws, we may not have that pool of workers to support the industry. Another well regarded homebuilder said that coupled with the fact that 18 year olds grow up playing computer games and not “using their hands”, it is hard to entice young people to go into construction as a career with the pricing that builders are used to paying. With Arizona being an affordable housing market, these issues are important to resolve.
The industry is seeing more untraditional lots and condo projects; a large number of new builds in infill locations are attached product. Belfiore encouraged builders to be innovative, unique and push the envelope.
Belfiore shared data from Moody’s indicating that in 2016 there are 111,000 new people expected to move to the Valley and 46,800 new jobs created.
