#1 Answer to the Housing Shortage: New Construction

The biggest challenge to today’s housing market is the shortage of housing inventory for sale. A normal market would see a six-month supply of homes for sale. Currently, that number is below four months. This is the major reason home prices have continued to appreciate at higher levels than historic averages.

The good news is that builders are now starting to build more homes in lower price ranges.

Builder Confidence is Up

The Housing Market Index from the National Association of Home Builders (NAHB) reveals that builder confidence increased last month. HousingWire quoted NAHB Chief Economist Robert Dietz about the reason for the increase in confidence amongst builders.

“The HMI measure of future sales conditions reached its highest level since June 2005, a sign of growing consumer confidence in the new home market. Especially as existing home inventory remains tight, we can expect increased demand for new construction moving forward.”

Builders are Meeting the Needs of Today’s Purchaser

Builders are not only jumping into the market – they are doing a better job of matching current demand. The Wall Street Journal recently reported:

“In a shift, new households are overwhelmingly choosing to buy rather than rent. Some 854,000 new-owner households were formed during the first three months of the year, more than double the 365,000 new-renter households formed during the period, according to Census Bureau data.”

The WSJ article went on to say:

“Home builders are beginning to shift their focus away from luxury homes and toward homes at lower price points to cater to this burgeoning millennial clientele.”

The graph below compares 2016 to 2017 new construction sales by price point. As we can see, builders are slowly beginning to shift to prices more favorable to the first-time and non-luxury buyer.

Bottom Line

There is a drastic need for a larger supply of home inventory to meet the skyrocketing demand. Builders are finally doing their part to help rectify this situation.  If you are exploring the real estate market for a new build or a resale home, give me a call for more information – J.P. Cook – 602-320-4253.

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19620 W Cambridge Avenue Buckeye, AZ 85396

$464,146

4 Beds

3 Baths

2,070 SqFt

Status Active

MLS # 6676071

Property Type Single Family Residence

Price Type --

Explore this must-see Slate home, ready for quick move-in on a homesite boasting front yard landscaping and driveway pavers. Included features: an inviting covered entry; an impressive kitchen layout offering 42'' cabinets, stainless-steel appliances, quartz countertops, a center island and a roomy pantry; an open dining area; a spacious great room; a lavish primary suite showcasing a generous walk-in closet and a private bath with cultured marble countertops; a convenient laundry; a covered patio and a 2-car garage. This home also offers stone tile flooring, additional windows and ceiling fan prewiring in select rooms.

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12528 W Marguerite Avenue Avondale, AZ 85323

$464,114

5 Beds

2 Baths

2,407 SqFt

Status Active

MLS # 6683503

Property Type Single Family Residence

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Discover the difference in this home and buying experience! Under construction Laredo design at Highland Ridge by Brookfield. 5 bedrooms! 7000 SQ FT Homesite, single story includes an open-concept floorplan boasting an inviting kitchen and bright great room that opens to the private, covered outdoor room, the two-car garage leads you into the drop zone. This home offers a fourth bedroom option in lieu of the flex space. $41,000 in upgrades. Special financing is offered. Alamar is a new kind of master-planned community in the West Valley spread over 1,150 acres in Avondale, just 18 miles from Downtown Phoenix.

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2720 W Cholla Street Apache Junction, AZ 85120

$464,000

4 Beds

2 Baths

1,548 SqFt

Status Active

MLS # 6669619

Property Type Single Family Residence

Price Type --

Brand New Construction! 4 bedrooms with 2 full baths. Modern kitchen with island open to great room. Master walk in shower. Late May 2024 anticipated completion date. Still time to customize some finishes. Tile to be installed throughout entire home. Spray foam insulation in walls and ceiling adding to great energy efficiency in home. Great sized backyard and no HOA! Great location near freeways and shopping.

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20066 N Golden Barrel Drive Surprise, AZ 85374

$464,000

2 Beds

2 Baths

1,936 SqFt

Status Active

MLS # 6612237

Property Type Single Family Residence

Price Type --

''Welcome to this meticulously maintained single-owner residence, boasting an expansive layout that exudes an airy ambiance. Featuring two generously sized bedrooms, this home offers an entertainer's delight with its seamless open concept design. The kitchen is adorned with stainless steel appliances, ample countertop space, and abundant cabinet storage, complemented by a formal dining area. Additionally, the generously proportioned office/den presents versatility, potentially serving as a third bedroom. Step outside to the inviting back patio, perfect for unwinding and savoring the serene beauty of Arizona winters. Completing this exceptional property is a spacious two-car garage, providing ample storage and convenience.''

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