Rising interest rates, and the expectation home prices will rise soon, spurred a lot more people to buy new houses in metro Phoenix during the past month.
It’s a nice boost for the Valley’s homebuilding market that’s still recovering from the housing crash.
New-home sales were up 22 percent in the Phoenix area, reports Belfiore Real Estate Consulting.
“Demand for new homes is healthy,” housing expert Jim Belfiore told me. “Between mid-April and -May, more new homes sold in the Valley than any other period in the past decade.”
All it took was interest rates to climb from 3.5 percent to more than 4 percent, and a forecast that new-home prices would climb as much as 8 percent this year. If you need any help, talk to your real estate agent in Phoenix.
Solid indicators
Definite signs of the homebuilding market’s path to recovery are there.
- Shea Homes Arizona is launching 11 new communities ranging from courtyard neighborhoods to luxury gated developments in metro Phoenix this year. The builder’s vice president, Ken Peterson, said while no one can forecast the future, trends in the Valley’s homebuilding market “have been very positive so far.”
- New-home builders including Christopher Todd Communities are jumping into metro Phoenix’s housing market with different types of houses.
- Projects in communities on the Valley’s edges in Buckeye, Maricopa and Peoria that stalled during the crash have recently been revived.
- And after Arizona lost more than 200,000 construction jobs when new-home permits plummeted from 64,000 in 2006 to less than 10,000 in 2009, contractors are hiring again.
Jobs aplenty but not enough workers
That last indicator for the Valley’s homebuilding market recovery is double edged.
“The strong housing market has also brought some challenges,” David Kitnick, president of Scottsdale-based Rosewood Homes, told me. “There is a severe shortage of construction labor because vast numbers of tradespeople were forced to move into other industries during the housing downturn.”
Many of those skilled construction workers found jobs in Texas and Colorado and haven’t returned to Arizona.
To draw the skilled construction workers to keep up with buyer demand for new houses, Valley contractors’ costs have risen anywhere from 20 to 50 percent, housing analysts estimate.
That means higher wages for construction workers, which is good news. But ultimately, it will also mean high prices for new-home buyers.
Ryan Brault of real-estate research firm Metrostudy said Phoenix-area builders are also facing higher land costs now.
That’s because many of the lots builders have been selling new homes on during the past few years were acquired for bargain prices during the crash.
And Kitnick said lumber costs are up for builders due to tariffs on Canadian wood.
Solid indicators
Definite signs of the homebuilding market’s path to recovery are there.
- Shea Homes Arizona is launching 11 new communities ranging from courtyard neighborhoods to luxury gated developments in metro Phoenix this year. The builder’s vice president, Ken Peterson, said while no one can forecast the future, trends in the Valley’s homebuilding market “have been very positive so far.”
- New-home builders including Christopher Todd Communities are jumping into metro Phoenix’s housing market with different types of houses.
- Projects in communities on the Valley’s edges in Buckeye, Maricopa and Peoria that stalled during the crash have recently been revived.
- And after Arizona lost more than 200,000 construction jobs when new-home permits plummeted from 64,000 in 2006 to less than 10,000 in 2009, contractors are hiring again.
Jobs aplenty but not enough workers
That last indicator for the Valley’s homebuilding market recovery is double edged.
“The strong housing market has also brought some challenges,” David Kitnick, president of Scottsdale-based Rosewood Homes, told me. “There is a severe shortage of construction labor because vast numbers of tradespeople were forced to move into other industries during the housing downturn.”
Many of those skilled construction workers found jobs in Texas and Colorado and haven’t returned to Arizona.
To draw the skilled construction workers to keep up with buyer demand for new houses, Valley contractors’ costs have risen anywhere from 20 to 50 percent, housing analysts estimate.
That means higher wages for construction workers, which is good news. But ultimately, it will also mean high prices for new-home buyers.
Ryan Brault of real-estate research firm Metrostudy said Phoenix-area builders are also facing higher land costs now.
That’s because many of the lots builders have been selling new homes on during the past few years were acquired for bargain prices during the crash.
And Kitnick said lumber costs are up for builders due to tariffs on Canadian wood.
