Metrostudy has released the results of their 3Q18 survey of the Phoenix housing market, and it shows relative affordability, solid economic growth and in-migration continuing to drive housing demand.
Some of the key findings include:
• Annual Single Family & Townhome New Home Starts are up 8.8% from 3Q17 Levels – Quarterly Starts are up 6.3% YoY
• The year-over-year change in quarterly starts by price range shows continued growth in the upper mid-range ($400-499k) and near luxury ($500-749k) price segments.
• Vacant Developed Lot (VDL) supply has now been declining for 13 consecutive quarters in the Phoenix market and is now just 52% of what it was at near its peak 10 years ago in 3Q08 as the crash was hitting full swing.
• Very solid economic growth, relative affordability, and growing in-migration – especially from higher cost of living California – is helping to grow and sustain demand in the Phoenix housing market
“The increase in the number of closings compared to the previous quarter is not necessarily surprising given the very strong first quarter of 2018 that saw the highest amount of new home starts in a decade, with the resultant lag causing many of those homes to close in 3Q,” said Ryan Brault, Regional Director of Metrostudy’s Phoenix market. “Look for 4Q18 to bump even higher in closings due to the very strong second quarter. Early this year at this time I had predicted around 19,500 annual starts for 2018 (single family and townhome). I’m slightly revising down that prediction to about 19,000 single-family homes and townhomes to be started this year, only because starts activity has been limited by a relatively lower number of lot deliveries earlier in the year which has dampened activity, due to a dropping in number of active communities and metering of lot releases in order for builders to manage build times due to high demand.”
The chart below shows YoY starts by price range.