Phoenix housing market sees 13.1% rise in new home starts
Metrostudy has released the results of their 1Q18 survey of the Phoenix housing market, and it shows the best start to a new year for housing since the banner years of the early 2000’s.
Some of the key findings include:
• Through 1Q18, Annual New Home Starts are up 13.1% YoY while Annual Closings are up 18.3% over 1Q17
• Vacant Developed Lots (VDL) supply is in its 12th consecutive quarter of decline in the Phoenix market and is now about 56% of what it was at its peak in 2Q08.
• Developers are simply not able to deliver enough lots and builders not able to deliver the number of homes needed to satisfy demand, especially at the most affordable price points or highest demand locations.
• Metrostudy is predicting 19,500 to 20,000 starts in 2018, constrained only by labor shortages and the diminishing supply of finished lots
“The slight drop in the number of closings compared to the previous quarter is not necessarily surprising given the very strong second quarter of 2017 that saw the highest amount of new home starts in a decade, with the resultant lag causing many of those homes to close in 4Q17,” said Ryan Brault, Regional Director of Metrostudy’s Arizona market. “Last year at this time, I had predicted around 17,500 annual starts for 2017 (single family and townhome) and the Phoenix market ended up within 75 of that number. I’m predicting about 19,500 to 20,000 single-family homes and townhomes to be started this year, only because the limiting factor will be labor constraints affecting cycle times and a still diminishing supply of finished lots in the market which will make it increasingly tough to fulfill the continuing strong demand.”
The chart below shows YoY starts by price range.