Despite COVID-19, new home sales and prices in metro Phoenix soared during the past few months.
To find more affordable new houses, more buyers are heading west to communities such as Buckeye, Goodyear, Avondale, west Phoenix and Surprise.
The Valley’s two most popular neighborhoods for new homebuyers are now in the West Valley.
The shift in growth from the East Valley to the West Valley isn’t new, but it’s growing. About 42% of all new metro Phoenix homes were built in the West Valley during the past year. That compares with 24% in the East Valley.
Ten years ago, the East Valley drew 34% of all new metro Phoenix homes, and the West Valley drew 28%.
More than 10 new subdivisions have opened for sales in the West Valley this year. Several new big communities from Mystic at Lake Pleasant Heights in Peoria to Alamar in Avondale are opening later this year.
It’s not just home building. Land sales for new apartment complexes and business parks on metro Phoenix's west side are climbing rapidly, too.
Developers are following the area’s new residents. More than 40% of metro Phoenix’s population is expected to live in the West Valley by 2030, according to the economic development group Westmarc.
Homebuyers signed contracts to buy 2,650 new Phoenix-area homes in August, according to Belfiore Real Estate Consulting.
That’s near the highest monthly level in more than a decade, which housing analysts partly attribute to pent up demand from buyers who sat out of the market during the early months of the novel coronavirus pandemic.
The median price of a new Valley house hit $325,000 in early September, up about $44,000 from last year, reports Belfiore.
South Buckeye posted the biggest increase in new home prices in metro Phoenix with a 12% jump during the past year. West Phoenix was second with an 11% increase.
Despite rising prices in the West Valley, 63% of new homes in the area sell below $350,000, according to the brokerage and research firm Land Advisors Organization. That compares with 55% Valleywide.
About 80% of existing homes in metro Phoenix’s West Valley sell below $350,000, compared with 69% for the entire Valley.
The top selling new home subdivision in metro Phoenix now is in Tartesso in north Buckeye, west of the White Tank Mountains. No. 2 for new home sales is west Phoenix’s Tuscano, according to Belfiore.
Sintra Hoffman, CEO of Westmarc, said though the West Valley has long been known for affordable homes, the area is now drawing more move up and second-home buyers.
The West Valley’s more diverse housing developments and growth in jobs are part of the shift, she said.
The West Valley’s growth is spurring demand for more rentals. The area has trailed Phoenix, Scottsdale and the East Valley for new apartment development.
But the apartments are coming. Land zoned to house about 34,000 apartments has sold in the West Valley since 2016, according to Land Advisors.
Employers want to be near new homes and apartments, particularly more affordable ones.
Microsoft, Amazon, Sub-Zero and Anderson Corp. are some of the big companies to expand in the West Valley during the past years. The area is also drawing more start ups, health care firms and retailers.
Overall, a record $1.24 billion in West Valley land has sold during the past 12 months, according to Land Advisors. That compares to $620 million in land sales in the area five years ago.
Greg Vogel, CEO of Land Advisors, said development of new business and industrial parks in the West Valley is at a peak, and the Loop 303 is a hot spot for those projects.
Investors and developers spent about $525 million on land zoned for industrial and commercial projects along the 303 during the past three years, according to Land Advisors.
In July, Nike pulled out of a deal to open a manufacturing facility in Goodyear that was supposed to employ 500 and bring a $500 million economic impact on the West Valley.
It’s one growing pain for the West Valley, and there could be more.
Water, sewer and infrastructure issues including not enough freeways face the West Valley as well as other growing parts of metro Phoenix, say growth experts.
Hoffman said the West Valley needs to attract more higher-paying employers and office tenants so less of its growing population need to commute east for jobs.
The West Valley’s median income is about $58,000, compared with $62,000 for all of Metro Phoenix, according to Westmarc.
Metro Phoenix’s west side needs to move quickly to address these issues because more growth is heading its way.
By 2030, more than 40% of Metro Phoenix's population is expected to live in the West Valley, and about 57% of all new homes are projected to go up in the area.
Reach our housing and real estate reporter at [email protected] or 602-444-8040. Follow her on Twitter @Catherinereagor.
