The Valley’s new home market appears headed for recovery at a much faster pace than the existing home market, according to the latest Phoenix Housing Market Letter by analyst RL Brown.
The median new home price was $210,000 last month, up from $208,045 in January. The median price was $225,206 in February 2008.
“What we’re seeing is a pretty clear trend now that new home prices have stabilized pretty much in the range from $200,000 to $210,000-$211,000, so that’s a very good sign,” Brown said. “If new home prices have stabilized, then that suggests the inventory challenges are diminishing and we can expect to see housing (construction) starts again sooner than later.”
Also last month, some 713 new home sales were recorded Valleywide, down slightly from 733 in January and 1,813 in February 2008.
New home construction permits totaled 248 last month, down from 301 in January and 1,297 in February 2008.
The new home market is no longer plagued by oversupply unlike the existing home market, which continues to feel the onslaught of foreclosures, Brown said.
“It’s going to take some more time before we see what anybody’s going to call a recovery in the resale market as far as getting back to some semblance of a balanced supply-demand market condition,” he said. “I really think we’re there in new homes.”
Monthly construction permits should reach between 1,500 and 1,600 within three to four months, Brown said.
“I think we’re real close to that because when these builders finish up selling off their inventory, then everybody who walks in who wants to buy a new home instead of a foreclosed house, they’re going to have to build one for them,” he said.
In the meantime, national builder confidence in the market for newly built single-family homes remains unchanged this month as economic woes continued to take their toll on potential buyers, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index, released Monday.
“Homebuilders are hopeful that the recent economic stimulus package, and particularly the first-time home buyer tax credit that it included, will have a positive impact on consumer behavior and home sales as the prime home buying season gets under way,” Joe Robson, association chairman, said in a statement.