2016 has bright outlook for real estate market, industry professionals discuss

real estate market

by Melissa Johnson | Rose Law Group Reporter

real estate market
Rose Law Group President and Founder Jordan Rose moderating “The Challenges Builders Face” panel at the AZDealmaker event. L-R: Hammons, IlesCremieux, Flaherty, Porter, Rose

Optimism for this year’s real estate market is abundantly expressed by those in the industry, with labor being the main constraint. To meet the expectations as the market continues to gain strength, being strategic and the ability to move quickly are key.

At Tuesday’s AZDealmakers event held by Belfiore Real Estate Consulting, Division President of CalAtlentic Homes Reed Porter told attendees “Phoenix has all the metrics to continue growth, so 2016 will be strong.”

First time homebuyers, retirees and millennials are coming back to the market. While first time buyers might not be the main target and profit driver for homebuilders said Michael “Frenchy” IlesCremieux, Division President of Richmond American Homes, they will play a key part in building demand. Porter said, “It’s becoming more challenging to deliver affordable housing.” IlesCremieux said, “[Richmond] is working on some exciting first time homebuyer products that will be a great option for lower price points.”

Heather Davenport, Vice President Land Acquisitions and Development of Woodside Homes, said, “Over 200 new build communities could sell out this year.” Jim Belfiore, President of Belfiore Real Estate Consulting, said “44% of active communities in this market have less than 1% of supply left.” The Internet and technology will be a big sales factor this year as most homebuyers will start their search online, something the speakers agreed on and have plans to meet Internet shopper expectations.

As far as land for the new communities, Bob Flaherty, Arizona Division President of Toll Brothers, said the land deals happen when there are terms involved. “Some sellers will do that and it allows more deals to happen.” On the other side of a land transaction deal, Mark Hammons, Principal of Land Resources, Inc., said land prices are realistic but, “It’s a balance that has to be maintained in real estate.” Flaherty mentioned, “There will be some great pieces of State Land that many people will be charging after.” Some pieces may be so large homebuilders will have an opportunity to work together on them and could bring the market’s next master planned community.

Speakers at the event all agreed that Maricopa, in Pinal County, will be the next city on their lists as you can still see the lights of Phoenix from there. Jeff Gunderson, Sr. Vice President Land Acquisitions and Development of Lennar, added he believes Buckeye and Surprise will host the next housing boom while IlesCremieux says the outlying cities just don’t have the economic development opportunities yet.

Belfiore said that Tucson’s population and employment growth just aren’t there yet but will come eventually, along with Prescott, Prescott Valley, Chino and Chino Hills. Belfiore said, “If you haven’t been to Prescott or Chino lately you should make it up there. Housing growth is wonderful.”

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