By Mike Sunnucks | Rose Law Group Reporter
Real estate expert Jim Belfiore expects to see a surge in new home building and housing starts in the Phoenix market, as builders see high demand and try to get ahead of potential impact fee changes Arizona cities could look at next year.
“I think we are going to see a surge prior to the end of the year,” said Belfiore, who is president of Belfiore Real Estate Consulting.
Belfiore talked about market conditions, affordable housing and the economy during a quarterly briefing with home builders at the Arizona Biltmore Resort and Spa Thursday.
He expects the builders to be issued 25,200 permits this year followed by 27,400 in 2020.
Belfiore recently revised his new home permits projects upwards with demand from buyers rising thanks to low mortgage interest rates.
New home sales saw a 34 percent gain in mid-September to mid-October compared to same period last year, according to Belfiore’s latest research.
“Demand is very, very healthy,” Belfiore said who expects to see year-over-year new homes sales to be 40 percent to 55 percent higher than a year ago.
He expects the high demand continue the rest of the year and compare favorably to last year when mortgage interest rates were higher.
The lower rates help potential buyers qualify for mortgages. A limited supply of existing homes for resale also encourage buyers to look at new homes, especially in entry level subdivisions and markets such as the West Valley and Pinal County.
Belfiore said builders could also pull more new permits if they anticipate cities and towns in Maricopa and Pinal counties are going to increase development impact and other fees on new construction.
Builders are continuing to grapple with labor shortages which are stalling current construction and could impact how fast can they rollout new subdivisions going forward, Belfiore said.