The percentage of new home permits for Phoenix-area construction shows robust growth with a staggering 77 percent increase from October 2014 to October 2015. In October 2014, builders took 710 permits, while this year it was reported in Scottsdale real estate research firm’s RL Brown Housing Reports that more than 1,250 permits were taken for new construction. However, price gains are much more modest, which is not necessarily a bad thing (remember the subprime collapse of 2009). The average price for a newly built home in metro-Phoenix is $309,792, up 3.9 percent from 2014, while the average price for an existing home is $200,000, just a 0.7 percent increase from last year. It is worthy to note that existing home sales have seen an increase of 6.5 percent from the previous October to this year, while new home sales are up 9.7 percent.
While the price gains remain modest, it is very much a buyers and sellers’ market. With the number of new home permits it is possible that we could see a more significant price increase by October 2016. The steady pace builds confidence for those looking to climb the property ladder and sell their existing home. Mike Orr, director of the Center for Real Estate Theory and Practice at W.P. Carey School of Business notes that most of the price increases will be determined by the growing number of buyers trying to purchase homes in the shrinking bracket of $300,000 and below. So this will likely affect the first time buyer.
That being said, if you are considering purchasing your first home, now is a good time to do your homework, before prices increase again.
Our Residential Real Estate Escrow Officer, Jonie Alden is happy to answer any questions. Jonie is a knowledgeable escrow officer with more than 40 years in the industry. Her extensive experience handling residential transactions allow her to see the roadblocks and prevent them before they even happen.
To learn more about Landmark Title and our residential title and escrow services contact our office today.