By Mike Sunnucks | Rose Law Group Reporter
New homes sales are posting record numbers in the dead of the hottest summer on record in Phoenix and during the COVID-19 pandemic.
Jim Belfiore, president of Belfiore Real Estate Consulting, said the number of sales contracts signed from mid-July to mid-August is the highest level reported in his company’s 15-year history.
New homes sales from mid-July to mid-August were 35 percent higher than the previous 30 days and 37 percent higher than a year ago, according to Belfiore.
Prices are also up with the median price of a new home in metro Phoenix coming in at $339,990. That is up $3,000 from a month ago ($336,900) and $17,952 from a year ago ($322,038).
Belfiore said there is strong price growth in south Phoenix, Pinal County, and the East Valley.
“Appreciation is healthy, and I really cannot see it slowing because there is no supply,” Belfiore said.
The median price of resale homes is also up to $320,000 compared to $311,900 a month ago and $280,000 a year ago.
The wave of sales comes as Arizona continues to navigate the COVID-19 pandemic and the Phoenix area has seen its hottest summer on record with strings of 110-plus days.
The high demand for new homes is driven by historically low mortgage interest rates but also includes investors who are making up between 8 and 10 percent of sales in the Phoenix market, according to Belfiore.
Belfiore said investor purchases of new homes account for approximately 3 percent of total sales last October.
He said investors are buying new homes because there is an extremely limited supply of existing homes for sale in the Phoenix region.
“It does inflate the market some, but I think it is going to be a short-lived phenomenon,” Belfiore said.
Belfiore said record low mortgage interest rates will continue to drive demand from first-time home buyers and other who are currently renting.
“That will cool off the rental market some. The flame will sort of burn itself out,” he said.