According to Belfiore Real Estate Consulting, a full service market research firm based in Phoenix that provides residential data and analyses, new-home sales rose 22 percent in the Phoenix area over the past month. The significant influx in sales is being attributed to rising interest rates, and the expectation home prices will rise soon in the Valley. President Jim Belfiore, who has more than 15 years experience in market research, said: “Demand for new homes is healthy. Between mid-April and -May, more new homes sold in the Valley than any other period in the past decade.” Belfiore is currently the Chairperson of Urban Land Institute’s Arizona District UrbanPlan program, and serves on the ULI Arizona District Management Committee.
However, it seems the healthy housing market is also exposing some unexpected challenges. There is a serious construction labor shortage around the Valley due to the last housing downturn. A vast number of construction workers left Arizona to seek opportunities in other states and haven’t returned. In an attempt to lure more skilled construction workers back to the Valley, contractors are charging up to 50 percent more to offer them higher wages. This translates to higher prices for new-home buyers. In addition, Phoenix-area builders are also facing higher land and lumber costs now.
Here are some other interesting statistics regarding Phoenix’s housing market:
- $302,000 – The approximate median price of a new metro Phoenix house (2017).
- 2.8% – Ballpark percentage that new-home prices in metro Phoenix climbed (2016).
- 19,000 – Approximate number of new homes that were built across the region last year.