Inventory Single Family Properties Remain Low
Currently, experts agree that Phoenix will continue experience the growth in its metropolitan housing markets, and increases in home values, creation of new home buildings, as well as increase in rents should be expected.
At present, Phoenix also follows the trend in most American municipalities, wherein there a significant influx is expected for multifamily housing. In relation to this, realtors are confident that they will not be seeing new housing bubble in the future.
According to Mark Stapp, Center for Real Estate Theory and Practice Director at Arizona State University, people are more concerned with formation of a multifamily bubble. However, Stapp does not think that that’s what really happens currently.
In fact, Stapp emphasizes that inventory of existing homes seems to be tight marketwide. In particular, at the low end of the market, the tightness of such inventory is very extreme. This specific end covers homes below $250,000. Meanwhile, for homes priced at $550,000 and above, things are looking good for them. And it is at that point where most of the current activities happen.
As Stapp adds, new homes are still built but in what can be considered as controlled manner. According to Stapp, given the labor and cost of land, the number of homes below the $250,000 range that builders can make are quite limited. Thus, there is not much to expect when it comes to volumes of sales in that area.
As an example, in Phoenix’s housing market, the average prices of homes is at $208,000 or $138 per square foot.
Meanwhile, for other communities, such as Town of Paradise Valley and Scottsdale, average sales prices are relatively higher compared with those of Phoenix.
However, in terms of population, the growth remained stable in recent years, and with the Great Recession, prices and housing values are expected to experience an upsurge in the coming years.
On the other hand, Stapp adds that no new housing stocks have been observed as compared to those indicated by historic trends. Looking at statistics, considering the amount of supply increase in 2006 to 2009, it seems that only the population has grown in that particular period.
Stapps says that the main issue with regard to the housing market is not just the demand but the demand at a specific rice. However, even if more units are being added to the marketplace at the moments, a number of people are having difficulty in finding establishments that meet their price standards.
POINT OF VIEW OF HOMEBUILDERS
Shea Homes Arizona has already made a mark in the homebuilding industry in the past. Moreover, according to officials, the greater Phoenix are may continue experience positive growth in the coming years.
Basically, according to Shea Homes Vice President of Land Acquisition and Development, David Garcia, after almost nil activities concerning home building activities, things are more likely to improve. Garcia adds things are also expected to go well with The Valley’s latest activities.
As per Shea Homes data, a 12% increase has been noted in terms of sales compared with that of last year. Moreover, the Homebuilders Association of Central Arizona also reports the same 12% increase for single-family building permits, which have been issued in the Greater Phoenix Area from January to September.
As part of Shea Homes, which specializes on purchasing lands, building roads, and constructing and selling homes, Garcia learned a number of things from the Great Recession. For instance, as a homebuilder, he reflected on the processes that are utilized by the company. He also realized that efficiency should make up for the slowing down with their work. Meanwhile, Shea Homes experienced a decrease in the number of the properties that they make, from 50,000 60,000 to a mere 10,000 to 11,000. Notably, such decrease greatly affected the company.
However, just recently, new communities have been established around the Valley thanks to Shea Homes. These communities include 24 North in Phoenix, Shea3D community of Ambition as Eastmark in Mesa, the condo communities in Vantage in Ahwatukee, and Carino Villas in Chandler.
According to Garcia, offering markets online bring potential benefits to the greater Phoenix area. He believes that the apartments they make serve specific purposes. Though, most people would want to have their own homes, living in apartments can serve as good transition stage for those who are aspiring to buy houses in the future.
Meanwhile, Garcia also realizes that the emergence of new demographics prompted the creation of a new approach to homeownership. In the housing market industry, specific trends, such as that of demographics, changed the manner by which people buy homes. For example, more people now prefer buying their own home first before they decide to get married.
THE MORE LUXURIOUS HOMES
In Town of Paradise Valley, a home may be priced at an average value of $1 million. Accodring to Chris Karas of The Karas Group, based on their stats for the 3rd and 4th quarter, their company had an increase in sales in general.
Based on the information obtained from The Karas Group, a median home sales price in Town of Paradise Valley is at around $1.6 million, which is a 2% decrease compared with that of last year. On the other hand, the average price per square foot is still at $355.26.
As for active listings, the number this year is 319, whereas that of last year was just 258. And with such data, Karas says that though overall their company is experiencing a growth in sales, the per-month trend is basically fluctuating.
The increase in sales can be attributed to the luxury housing markets in both Paradise Valley and Scottsdale.
As Karas confesses, his clients come from various places, and such people are buying with aim of finding a more centralized location. However, for the first time, Arcadia beat Paradise Valley in terms of land value and price per square foot of new constructions.
Meanwhile, in Scottsdale, the average sales price of a home lies around $500,000.
According to Brian Keller of RE/MAX Fine Properties, the metropolitan Phoenix currently has a strong and table housing market industry. He also predicts that the growth will continue in the coming years because of the increase in job opportunities in Phoenix is twice that of the national average.
Based on provided data, Scottsdale currently has 145 active listings.
Meanwhile, Keller proceeds with his business on traditional residential resale that considers both buyers and sellers. He also adds that a large portion of his business devotes to collaborating with developers and luxury home builders. In this part, they acquire land for infill projects and luxury homes. According to him, there will always be a demand for such types of projects in Paradise Valley, Scottsdale, and some parts of Phoenix.
Keller also emphasizes that Scottsdale is popular among clients who are looking for a certain quality of life, that is, living in a place near good schools, have safe neighborhoods, and where people can easily commute.
Thus, as one of his primary goals, Keller aims to increase multifamily housing stock in Scottsdale.