By Mike Sunnucks | Rose Law Group Reporter
Continued strong demand and record low new home supplies are poised to continue to drive up home prices.
Real estate expert Jim Belfiore said that is poised to continue to drive up home prices in metro Phoenix.
Belfiore originally projected home prices to increase 7% to 9% regionally this year. Those price projections now stand at 12% to 15% increases. Belfiore said continued trend lines and market dynamics could take those price increases even higher.
“I’d say there is potential for it to be 20%,” Belfiore said.
That will challenge the Phoenix housing market which saw strong 2020 sales despite the COVID-19 pandemic fueled by low mortgage interest rates and demand for entry level homes in markets such as Pinal County, the Queen Creek area and West Valley submarkets such as Buckeye.
Belfiore said first-time and other buyers could be increasingly priced out of the market.
“This year is going to be a tough year for entry-level buyers,” said Belfiore, a principal with real estate research firm Zonda.
New homes sales were up 20% from mid-January to mid-February compared to a year ago.
They were also up 14% compared to the previous 30-day period, according to Belfiore.
Belfiore continues to cite concerns about limited supplies of new homes and new subdivisions driving up homes prices in the Phoenix market.
Belfiore said there are currently 457 active new home developments in the Phoenix region. “We haven’t seen a number that low since 2014,” Belfiore said.
He said there were just 276 new homes for sale and currently ready to move in, according to Zonda’s most recent research.
That is an all-time low since Belfiore started tracking the regional housing market in 2006.