Builders seeing slowdown as buyers wrestle with sticker shock

By Mike Sunnucks | Rose Law Group Reporter

The red-hot local housing market is slowing down some as summer temperatures — as well as home prices — rise.

Builders are seeing fewer buyers and once lengthy waiting lists are not so lengthy as demand for new homes slows in metro Phoenix.

“Traffic levels are falling and interest lists are getting smaller,” said Steven Hensley, advisory manager for real estate research Zonda. “There was tons of pent up demand earlier this year. Those lists are getting smaller.”

Low mortgage interest rates propelled home sales in the Phoenix and other markets last year and into the start of 2021 even with all the impacts of the coronavirus pandemic.

Hensley said home builders are seeing fewer prospective buyers. He said part of that can be the usual slowdown in buyers during Phoenix’s scorching summer heat.

But Hensley said the rise in home prices could also be at play.

Home prices have increased significantly during the pandemic. The median price for a new home in metro Phoenix is $440,000, Hensley said.

He said the median price for a sales home is $400,000.

The price jumps are discouraging and pricing out some buyers. “People are not used to seeing those numbers,” Hensley said.

Hensley said other prospective buyers are not finalizing sales contracts because of rising prices.

“Some of them are balking and not moving forward with signing a contract,” Hensley said.

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July 2021