Existing home prices up 28%, new home prices up 26% in Phoenix region

By Mike Sunnucks | Rose Law Group Reporter

The Phoenix real estate market ended 2021 with a familiar refrain —higher prices and lower supplies of homes for sale.

New home prices were up 26% in December compared to a year ago, according to real estate research firm Zonda.

The median sales price for a new home in the Phoenix metropolitan area was $459,900 in December. That compares to $365,531 at the end of 2020, according to Zonda.

The media sales prices for an existing / resale home was $425,000 in December — up from $331,000 to end 2020. That is a 28% increase.

On the flip side, supplies of homes for sales continue to be constrained.

“Supply (active community count, finished lot count, and speculative inventory) remains near modern day lows with no real end in sight. Builders are producing to capacity,” according to Zonda’s December 2021 research report.

There were 424 active new home communities in Maricopa and Pinal counties to end 2021. That is down 480 active new home developments selling homes in 2020. That is a 12% drop from 2021 and down 25% from two years ago when there were 130 more active communities in the Phoenix region.

High demand for homes during COVID pandemic, low interest rates and continued economic and population growth in metro Phoenix continue to drive home sales.

According to Zonda, “Moody’s Analytics is projecting just over 90,000 jobs to be created in 2021 and over 120,000 jobs in 2022. This forecast is encouraging for the Phoenix economy as a whole and the home building industry. The anticipated employment growth will likely sustain further demand for new homes.”

Still, price gains have eased some and interest rates could move higher in 2022.

Zonda reports there have been 30,013 permits for single-family homes issued in the Phoenix region, according to its December data.

The research firm projects 34,000 to 35,000 single-family building permits issued in 2021 and 32,000 in 2022 as the housing market also faces challenges with materials, supply chains and labor.

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January 2022