#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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9555 E Raintree Drive Scottsdale, AZ 85260

New

$460,000

3 Beds

2 Baths

1,509 SqFt

Status Active

MLS # 6692236

Property Type Apartment

Price Type --

Second floor corner unit in an excellent Scottsdale location! The gated community of Ladera Vista is conveniently located near restaurants, shops, and much more! A spacious home with lots of natural light! Updated with newer vinyl floors in the family room and office/third bedroom, newer stainless steel appliances in the kitchen, and not one, but two covered patios to relax on. Primary and second bathroom both have updated vanities and fixtures. When you're not inside, take advantage of the heated community pool and spa all year long!

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7746 E Olla Avenue Mesa, AZ 85212

New

$460,000

3 Beds

2 Baths

1,438 SqFt

Status Active

MLS # 6692471

Property Type Single Family Residence

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Welcome to your dream home! Nestled in a prime location with convenient access to the 202 and 60 freeways, this property offers both accessibility and charm. Two tone paint throughout home. Step into the beautifully updated kitchen, featuring a quartz island, new shaker cabinets, and a stylish backsplash—a chef's delight! The spacious dining area with a fire place is perfect for hosting gatherings. Spacious Master suite and beautiful bath to retreat for relaxation. Outside, the low-maintenance backyard boasts a built-in gazebo, ideal for alfresco dining or unwinding. Experience comfort, convenience, and modern living in this Mesa gem!

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6734 E Rosedale Street Mesa, AZ 85215

New

$460,000

3 Beds

2 Baths

1,500 SqFt

Status Active

MLS # 6693557

Property Type Single Family Residence

Price Type --

This move-in ready gem offers 3 bedrooms and 2 baths, awaiting your personal touch to make it your own! Nestled in a prime location close to schools, shopping, walking trails, entertainment, and with easy freeway access, convenience is at your doorstep. Outside, the backyard oasis beckons with an extended patio adorned with pavers, mature landscaping and garden.

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18475 W Sunrise Drive Goodyear, AZ 85338

$460,000

4 Beds

2 Baths

2,563 SqFt

Status Active

MLS # 6550951

Property Type Single Family Residence

Price Type --

BEAUTIFUL!!!!!! DONT MISS IT!!!!!!!!!!4 Bedrooms + Bonus Room, Kitchen has Granite Counter Tops, Built Microwave ,Dishwasher, Pantry, Fireplace for those cold winters , Dining in Kitchen , Formal Dining Room ,Living Room with Laminated Floor, 3 Bedrooms, Master Bedroom , has separated exit ,Full Bathroom, Double sink, Private Toilet Room , Spacious Wak-in Closet, Shower and Tub , includes additional space that can be used as a nursery room or as an Office, Laundry Room, Double Sink on 2nd Bathroom, Garage with a lot of Cabinets for storage, Back yard ready for your unique and beautiful ideas.

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