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Home construction still gaining in the Valley — but it may not be enough to meet demand

Wednesday, November 13, 2019   /   by Juan Grimaldo

Home construction still gaining in the Valley — but it may not be enough to meet demand

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Construction workers continue to stay busy in metro Phoenix as new homes are built.


Homebuilders are doing everything they can to meet strong demand for new homes in metro Phoenix, but it just may not be enough.

Ryan Brault, regional director of the Arizona and Las Vegas markets for Metrostudy in Mesa, expects homebuilders to finish the year with around 20,800 single-family and townhome construction starts and about 18,750 closings.

In his Phoenix Frame Briefing on Nov. 6 to homebuilder clients, Brault said there have been 20,697 starts and 19,070 closings through the third quarter of 2019.

Ryan Brault, regional director for Metrostudy's Arizona and Las Vegas markets.

Ryan Brault, regional director for Metrostudy's Arizona and Las Vegas markets.

EMILY BRAULT

While his year-end forecast is a modest increase from the third-quarter results, it's still positive growth of 6% for the year despite continued rising prices.

"I expect there to be a minimal seasonal drop-off to end the year compared to previous years, thanks to interest rates that are still roughly a full percentage point lower than this time a year ago," he said. "The challenge going forward into next year and beyond is going to be if and how we are able to maintain the needed delivery of new homes to meet the anticipated demand and keeping them affordable enough for people to buy them."

His research shows that vacant developed lot inventory for homes priced between $200,000 and $249,000 have the lowest months of supply of all price ranges — at 11.8 months of supply. Meanwhile, vacant developed lot inventory for homes priced between $250,000 and $299,000 is 13.1 months of supply. Lots for homes priced between $300,000 and $349,000 is 14.4 months of supply.

As a whole, across all price ranges, the market has about 21.6 months of supply, Brault said.
By   – Senior Reporter, Phoenix Business Journal
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