Hammers were pounding on new metro Phoenix homes in June at the headiest pace since the end of housing boom.
Builders started 1,939 homes across the Valley during the first month of summer, according to the latest data from RL Brown Reports.
That pace of building is up 15 percent from June 2015. And it was the strongest month for new home permits since August 2007, when Phoenix’s homebuilding boom had just begun to sink with the economy.
Housing analysts and publishers of the report, RL Brown and Greg Burger, say new-home sales and construction are climbing in the Valley even as builders are dealing with labor and material shortages.
Metro Phoenix’s new-home market has other things going for it, including:
STREET SCOUT INTERACTIVE MAP: See Valley home values, compare ZIP codes
But Brown said that even though metro Phoenix’s housing market is well into a recovery, it may not feel that way for some homebuilders.
About 17,000 houses likely will be built Valleywide this year, a significant increase from 12,000 last year and 10,000 in 2014.
But Phoenix’s new-home market is still way off its typical pace. Comparisons with the boom year of 2006, when a record 64,000 houses were started, is a bad analogy. That pace wasn’t real and was based on speculator demand fueled by bad loans that failed.
Before the boom and bust, metro Phoenix was one of the top new-home markets in the country. Between 1999 and 2003, an average of 25,000 to 35,000 new homes went up here each year.
Reaching that pace again will feel more like a real recovery for homebuilders.
Brown and Burger are forecasting new-home sales and building will steadily climb during the next four years with permits reaching almost 25,000 in 2020.
But why the slower-than-expected recovery of an industry that drove Arizona’s economy before the crash?
The state’s population growth has been slower than expected and lagged pre-housing boom years. And income growth for Arizona’s residents isn’t faring much better yet. Increases in either or both of those key indicators will drive up demand for all types of housing in metro Phoenix. Higher wages for construction workers and more homebuyers will also drive up prices.
Now might be a good time to buy.
