Real Estate Reality: Building is backPosted: Updated:
PHOENIX -- The once stormy real estate market is making a turnaround, particularly when it comes to new homes in the Valley. Builders are back to leveling lots. Framework is becoming a more common site. And construction workers are once again making noise. And, it's all because the real estate market is on its way up.
"It has come up and we are out of the bottom. Everyone is excited about it," R.L. Brown told 3 On Your Side when we asked him to assess new home construction in the Valley.
Brown is a recognized authority in real estate and is a housing economist and analyst. He has spent decades monitoring new home construction.
He said permits to build new homes have increased steadily over the past year and continues to increase.
"Traffic at new model homes and subdivisions are up," he said. "New contracts and new orders are up. We are definitely in a recovery when it comes to new housing here in Phoenix."
But, what is kick starting all of this new home construction in the Valley? According to Brown, there is significantly more consumer confidence. That means consumers are loosening up their wallets now and are not afraid to make a move in real estate by putting down money on new home construction.
John and Mary Ann Bost certainly fall into that category. After recently selling their house, they started touring new Pulte homes in a subdivision called Lone Mountain in Cave Creek. Before they knew it, they signed on the dotted line and are currently waiting for their new Pulte home to be finished.
"We see the price of homes going up and the price of these homes where we bought went up just 24 hours after we signed the contract," John Bost said. "So, we are glad we got in and bought when we did."
And real estate analysts say that's the kind of consumer confidence that's fueling new home construction.
"Consumers sit on the side line and say, 'Golly gee, if we wait a little longer is that house I am interested in going to cost me more?'" The answer is probably yes," Brown said.
He has a point. For example, the median cost of a new home has increased a whopping $40,000 just over the past 12 months.
Data collected by 3 On Your Side shows new homes are being constructed in all parts of the Valley. However, there are some areas hotter than others. Gilbert is leading the charge with the most home permits issued in the past year. The town received 2,418 new home permits. Phoenix was second with 1,651 permits granted. Goodyear issued 976 permits. Mesa was granted 860. New home permits for Peoria totaled 768. And Buckeye, which was once one of the fastest-growing areas in Arizona, is back in new home construction by getting 691 construction permits.
Brown said those numbers are extremely encouraging and proves that real estate is back.
"It's a slow and steady kind of recovery and we expect that to continue for the next few years," Brown said.
As for Jon and Mary Ann Bost, they can't wait to move into their new home when it's finished and realize their timing was perfect because prices are inching up.
Brown agrees and said consumers should expect a nice, steady increase in home prices to continue here in the Valley.
"If you can do it and build, then the key is to do it now," Brown said.