By Callan Smith | Rose Law Group Reporter
The Metro Phoenix housing market is steady and stable said Jim Belfiore of Belfiore Real Estate Consulting at the company’s quarterly Market Update Presentation held Thursday before a large group of industry insiders.
While such descriptors might sound mundane, the numbers are up year-over-year [YOY], and stability is good compared to four to five years ago, he said. Traffic levels, which are preindicators for home sales, were up 11 percent in the East Valley. Central and South Phoenix showed increases of 13 percent as the highest gain of 11 percent over the previous year.
The number of new home sales per subdivision from mid-September through mid-October were at 2.5 sales per month, which was the same rate as the two previous 30-day periods. Last year averaged 2.3 monthly sales per subdivision. Belfiore said he believes the 2016 average is likely to be 2.4 or 2.5 sales per month, with their November and December projections averaged in. Total new home sales for Metro Phoenix are up nine percent YOY and reached a three-year-high over two consecutive months in June and July.
Five-hundred forty-two new home subdivisions are active in the metropolitan area, down three from January 2016. Of those communities, Belfiore said, the expectation is 50 percent could sell out in the next 12 months if sales come in at a similar average rate as they have for the previous 12 months.
Throughout the market, the top-selling subdivisions include Paradise at Ironwood Crossing by Fulton Homes, Villas at Copper Crest by KB Homes and Oasis at Queen Creek Station by Fulton homes. Maracay Homes is also showing strong success with its new community The Meadows in Peoria.
Demand is strong in both South Buckeye and Maricopa, which are attracting home buyers.
Going forward, home prices are a challenge, “with almost no appreciation, while costs in site development and home construction have sky-rocketed over the past twenty-four months, margins have gotten smaller and smaller, with buyers resistant to price increases of more than three-thousand dollars,” said Belfiore. The company’s analysts were projecting a three-to-three-and-a-half percent appreciation in 2016, but that changed as the previous two-months produced only a one-tenth-of-one percent increase.
Existing home supply is at 25 thousand units listed on the MLS throughout Metro Phoenix, per the Cromford Report, with a three-to-four-month supply. Belfiore emphasized opportunities are possible in areas where the resale supply is so small existing home buyers need to look at new homes, such as in Avondale, which presently has a low resupply.
Population growth does look good based on Moody’s Analytics projections, supporting the need for continuing construction. Employment numbers for 2016 are healthy at 61,000 new jobs in the marketplace, Moody’s is bearish, however, on job projections with the prospect of what full-employment could bring to the Valley in the coming years, Belfiore said.
For further information, contact Belfiore Real Estate Consulting.
