courtesy of Kristena Hansen
Reporter- Phoenix Business Journal
The continued surge in existing home prices and a tight supply of properties on the market throughout metro Phoenix has been causing a ripple effect on the new home market, which saw a 65 percent year-over-year increase in new-home permits in October, according to the latest housing report from RL Brown in Phoenix.
Nearly 900 permits for new home construction were issued in Maricopa and Pinal counties in October, up from nearly 550 issued permits during the same month last year, the report said.
The October permit figure was also the first upswing in the past three months, when permitting steadily declined from about 1,300 in July to just under 800 in September.
Through October, there were more than 10,100 new home permits issued Valleywide this year. That’s us nearly 75 percent from the same time period last year, when only about 5,800 were issued, the report said.
While that’s a significant increase, it’s important to keep context in mind. Residential (and commercial) construction had come almost to a complete halt during the Great Recession, so the industry is still in the early stages of emerging from its rut.
The RL Brown report also stated that new home sales — 1,101 — were up by a whopping 88.5 percent in October year-over-year. That’s right in line with Arizona State University’s report that came out Monday, which declared an 85 percent surge in new home sales in October over a year earlier.
Median prices for newly-built homes, however, have been more stable than those of existing homes.
For example, the median new-home price in the Phoenix area was $235,964 in October — up by only 7.5 percent year-over-year, the report said.
On the other hand, the median price for existing homes in October — $148,000 — surged 34 percent from the same time last year.
Metro Phoenix has seen more than 78,600 sales of existing homes year-to-date in October, which is about a 5 percent decline from last year. RL Brown derives this number from both broker and for-sale-by-owner transactions, so its data may differ from other reports that generate information only from the Arizona Regional Multiple Listing Service, which calculates only broker-assisted sales.