Demand Is There For Phoenix Area Homes, but Will Prices Follow?

    home for saleNew July numbers from RL Brown Housing Reports show existing home sales up 22 percent in July from last year. New home sales were up 10 percent in July vs. July 2014, and permits for new home construction were up 55.5 percent.

    Year-to-date, new home construction permits are up 39 percent versus 2014 and existing home sales are up 13 percent. Prices, however, are not showing the same robustness.

    The median sale prices for an existing home in July came in at $200,000, according to Scottsdale-based RL Brown.  The median price of a new home went for $299,990 in July up 3.1 percent from a year earlier.  Arizona State University economist and housing expert Michael Orr’s analysis of June numbers also show demand is up.

    “Demand for homes is back to normal,” said Orr, director of the Center for Real Estate Theory and Practice at ASU’s W.P. Carey School of Business. “March through June are always big months for home sales, but the numbers for June were exceptional.”

    Permits to build new homes are at their highest levels since August 2007 that right before the recession and subprime mortgage debacle decimated Phoenix’s real estate markets.
    Orr said new homes sales were up 21 percent, traditional existing sales up 28 percent, and short sales up 21 percent in June compared with June 2014.
    Bank-owned sales were down 26 percent.

    Orr said his numbers show the median existing home sale prices at $221,000 up $209,000, or 5.7 percent, from the same time in 2014.
    The market challenge for Orr is the supply of homes. He said active listing are 20 percent lower than in 2014. That is creating tough supply issues for first-time and entry level home buyers, Orr said.

    So far this year, home price growth in Phoenix has lagged gains in other Western cities.

    By: Mike Sunnucks 

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