Metro Phoenix New Home Sales Jump, Despite Soaring Summer Temps

Article originally posted on AZ Central on August 7, 2019

For more than 25 years, Maracay has providing homebuyers with smarter choices that serve both their lifestyle and the environment, while constructing more than 10,000 homes for families in Arizona.

More than 3,000 people showed up in May for the grand opening of the south Phoenix community Avance. Maracay Homes sold 65 houses there in 60 days.

Demand like that for new homes in the Valley was common during the boom of 2005 and 2006, and has been rare since then.

But new home sales in metro Phoenix soared during the past few months to levels not seen by builders since 2007.

Lower interest rates and higher resale home prices are giving the home building market a boost.

“Homebuyers, uncharacteristically ignoring Phoenix’s undesirable summer climate, continued braving the heat and humidity in July, to push sales well above July sales levels of years past,” Arizona housing analyst Jim Belfiore said.

New home sales were up 20% from mid-June to mid-July, compared to last year, he said.

Sales, sales, sales

More construction workers will be out braving the Valley’s heat this summer because of the recent jump in new home sales.

  • Contracts for 2,108 new homes were signed in metro Phoenix between mid-June and July. That compares with 1,760 for the same period in 2018.
  • The median price of a new Valley home is $318,000, compared with $279,000 for an existing home. That’s one of the smallest spreads between new and resale home prices in metro Phoenix history.
  • About 19% of Phoenix-area home sales were for new homes. That’s up from 16% a year ago.

Where new buyers are flocking

More affordable communities in the West Valley are drawing the most new home buyers.

Metro Phoenix’s top selling developments, according to Belfiore, are:

  • Express at Tartesso in Buckeye.
  • Grand Village in El Mirage.
  • Homestead at Marley Park in Surprise.
  • La Ventilla Villas in Goodyear.
  • Cactus at Festival Foothills in Buckeye.

New home sales by city

The recent jump in new home sales will give many metro Phoenix communities a boost after a slow start to the year.

The Valley’s home building market is still far from recovering from the crash.

New home sale closings by city for the first quarter show how the market started the year slow. It’s the latest data available from CoreLogic. Second quarter data for cities available later this summer will show more increases.

  • Apache Junction: 241, up 7% during this year’s first quarter.
  • Ahwatukee: 411, down 12%.
  • Avondale: 349, down almost 12% from last year.
  • Buckeye: 949, down 12%.
  • Cave Creek/Carefree: 261, down 17%.
  • Chandler: 1,437, down 15%.
  • El Mirage: 149, up 5%.
  • Glendale: 1,161, down 9%.
  • Gilbert: 1,610, down 8%.
  • Goodyear: 667, down 4%.
  • Mesa: 2,193, down 8%.
  • Paradise Valley: 164, down 12%.
  • Peoria: 1,223, down 14%.
  • Phoenix: 5,898, down 5%.
  • Scottsdale: 2,365, down 13%.
  • Sun City: 623, down 9%.
  • Tempe: 607, down 12%.

Far from boom levels

During the Valley’s peak of home sales in 2006, more than 60,000 new houses were built and sold.

Belfiore is forecasting about 19,000 new homes will be built in metro Phoenix this year.

Speculators wanting to flip houses on the Valley’s fringes for fast profits drove too many sales during the boom and foreclosures during the crash.

Now, buyers are looking for more affordable new houses, and more want them closer in. Homebuyer turnout at Avance shows that. Prices for homes in the community about 15 minutes from downtown Phoenix and Tempe start in the $300,000s.