From Elliot Pollack’s “The Monday Morning Quarterback.”
R.L. Brown reported March single family housing permits in Greater Phoenix were down a whopping 20.8% from a year ago. Year to date, permits are down 18.9%. This poor showing is confounding most observers of the housing market. The analysis that accompanied the permit data was quite good. It discussed the gap between the median new home price and the median resale home price-now $100,000. According to R.L. Brown, this is pushing home buyers to resale and it is having a chilling effect on new home market share. The spread is so large that the dampening effect is not likely to go away quickly.
Arizona homebuilders got too greedy. They had very large – too large – price increases last year. Now they’re waiting/hoping for the market to come up to their prices.
I imagine there’s a lot of builder specials and backend discounts going on with new homes in Arizona but that’s speculation.
Leave a comment if you’re up to speed on current new home builder discounts.