Phoenix housing has strongest quarter in a decade

Residential Real Estate | 23 Aug, 2017 |

Metrostudy has released the results of their 2Q17 survey of the Phoenix housing market, and it shows the strongest quarter for homebuilding in a decade. Some of Regional Director Ryan Brault’s findings include:

  • Builders started 16,663 homes between the end of 2Q16 and 2Q17, of which 4,632 started in the second quarter. That was the highest number of quarterly starts since 3Q07, or almost 10 years – and a jump of 15.7% over the same quarter a year ago, and 17.2% over 1Q17.
  • The $200-250,000 price tranche jumped by 27.5% in YOY starts volume while the sub-$200,000 range dropped by 22.5%. Much of that is due to significantly higher land, materials, and labor costs over a year ago making it nearly impossible to build new detached or townhome product at such low price points in highest demand areas.
  • Lot deliveries have now lagged starts for eight consecutive quarters as builders still find it difficult to deliver enough lots to replace existing sold-out communities.

“The year-over-year change in quarterly starts by price range shows the shift in the entry level range from the sub-$200,000 category upward to the $200-300,000 price ranges which dominate in both starts volume and percentage growth,” said Brault. “The $200-250,000 price tranche jumped by 27.5% in YOY starts volume while the sub-$200,000 range dropped by 22.5%. Much of that is due to significantly higher land, materials, and labor costs over a year ago making it nearly impossible to build new detached or townhome product at such low price points in highest demand areas. A 24.4% increase in starts YOY in the $750,000 and up range shows the continuing resurgence of the high-end market in Phoenix, though it still represents a fairly small share by volume (3%).

The chart below shows YoY starts by price range:

 

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