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New-home sales, construction lagging in Valley
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New-home sales and construction permits plummeted more than 40 percent, while existing-home sales provided some encouraging news last month compared to July 2007.
That's according to the latest Phoenix Housing Market Letter by analyst RL Brown.
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"The key thing that we need to understand is that this housing market is not going to change dramatically in the near term and be much different than it is now," he said. "In other words, this isn't going to be an overnight thing and two weeks from today, or two months or maybe even two years from now, it's not going to be a problem that has totally gone away."
New-home sales fell from 3,128 in July 2007 to 1,764, while construction permits fell from 2,560 to 1,493. The average price of a new home was $274,773.
"If you're a homebuilder or a developer, what you need to recognize is this is the market of today and probably the market of tomorrow," Brown said.
Existing-home sales were up nearly 17 percent, from 5,072 to 5,928. The average resale price was $243,735.
"This is a good time to go shopping and to find something you really want and make a deal on it," Brown said. "If you're a seller, this is not the time to sell. If you have to sell ... then be realistic about the price of your property and your property will sell. The value of your property is going to be just exactly what the value of the other properties in your neighborhood is."
Foreclosure properties are selling, but it's unlikely that the market has peaked in terms of foreclosures, he said. Homebuilder and speculative inventory has diminished, but mostly from cancellations, Brown said.
"If you think about the marketplace, it's a long way from where we were in 1989-1991 in the savings-and-loan crisis," Brown said. "If we compare it to overall historical activity in Phoenix, this is still not a bad housing market."
Matt Cody, owner and president of Cachet Homes, also has a positive view of the market.
"Like most builders, our standing inventory is dwindling," he said. "Buyers in the market are purchasing at amazing prices in premier locations. We're looking forward to getting back to doing what we do best, and that's building homes."
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