State of the Arizona Home Market Reported By Brian Richards

State of the Market Reported By Brian Richards Manager, Coldwell Banker Residential Brokerage – Builder Services

The new Market Letter with results through September has been issued from RL Brown.

Another phenomenal month in regards to permit activity. There should be no complaints whatsoever about the performance of the Phoenix housing market in September 2015! Newhome permits were up 52% over the same month last year, with 1391 Newhome permits issued in the region. Year to date RL Brown counted 12,293 permits for new homes versus 8,541 for the same period last year. That’s an increase of almost 44% over just the last nine months. Brown counted 1489 new home permits issued in the Metro area during the month compared with 838 permits issued during the same month last year.

Newhome closings for the month were up 24% from last September and are up 12.2% year to date so far in 2015. In spite of the increases in Newhome sales, resale home activity in the region is also up. September saw 7,878 resale closings (including for sale by owner transactions). That’s an increase over the 6,663 resale closings from the same month last year and calculates to an 18.24% improvement over last September, suggesting that no one should be complaining about the state of the resale housing market here in Phoenix. Year-to-date resale transactions have been almost 9,000 more than for the same nine-month period in 2014.

RL Brown explains, ‘In many respects, this is a remarkable market performance, especially factoring in the gyrations of the financial markets, the relatively modest performance of the overall USA and global economies, the bubbling strife in the Middle East, the political uncertainties in the nation overall, and the growing violence in our streets.” An examination of a new home versus a resale home average and median prices allows a comparison of the trends in median and average pricing market wide over the last 13 months. It appears that both median and average prices have tended to level out over the data period. It is pretty obvious from the market data that RL Brown examined, that the Metro Phoenix housing market continues to perform well and that a recovery from the “great recession” continues.

As is always the case in any housing market, all geographic areas, all price ranges, and all product types (and all builders) don’t recover at the same pace or at the same time. This suggests that the key to optimizing a builder, contractor, or supplier’s results remains the careful positioning of the builders particular strengths against the market conditions that really do exist. It isn’t just a matter of buying the right land, discovering exactly what housing consumers are looking for planwise, or pricing products below that of the competition, but some kind of an intelligent combination of all of the above.

RL Brown says, “As we look to the future of this housing market we see little in the way of probable disruptions of activity generally consistent with the levels that we currently are seeing. As we have noted before, based upon current levels of economic activity, job growth, and population growth, we can expect the current market to continue to moderately improve over time.” Brown does not expect this marketplace to soar to the heights of 2005 until and unless global and regional economic conditions result in local job and population growth comparable to what occurred in the 20042005 timeframe.

Phoenix will continue to grow, and this housing market will continue to be profitable, as long as new populations are attracted to the region through economic development and through traditional retirement and preretirement migration. The challenges of effective private and public economic development activities, preservation of a desirable quality of life, and preserving and developing natural resources appropriate to sustaining growth, and the development of competent civic leadership will remain dominant and potentially limiting in the future, becoming more important as the community continues to grow. We should expect that California should continue to mitigate its resource and home price problems and will remain attractive to those moving from other places, suggesting that Phoenix ensure that it also competes favorably for both jobs and housing.