#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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633 S Golden Key Street Gilbert, AZ 85233

$538,900

3 Beds

2 Baths

1,877 SqFt

Status Active

MLS # 6772178

Property Type Single Family Residence

Price Type --

Discover this beautiful CORNER LOT home just a short walk from DOWNTOWN GILBERT, nestled in a SAFE, well-developed community with endless walking paths, LAKES, and parks. Enjoy a spacious backyard featuring a COVERED PATIO and a sparkling, HEATED POOL/SPA—the perfect size for cooling off or heating up! (NEW pool heater/cooler (2023) This DESIRABLE FLOOR PLAN boasts a stunning front-to-back entry, a LARGE OPEN FAMILY ROOM/kitchen and dining area ideal for entertaining or game nights. Modern touches include GRANITE COUNTERS and newer appliances in convenient walk-through kitchen. Recent: NEW WATER HEATER (2024), NEW RO AND WATER TREATMENT SYSTEM/SOFTENER (2021), and a NEW ROOF (installed 10/2024). Located near A+ Gilbert schools, gyms, restaurants, shopping, and MORE! MOVE IN TODAY! and WATER SOFTENER (2021). 2 CAR GARAGE with storage and attice access. NEW ROOF installation 10/2024!! Perfect location NEAR RESTAURANTS, shopping, parks, schools and SO MUCH MORE!!

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13403 W Cabrillo Drive Sun City West, AZ 85375

$538,850

2 Beds

2 Baths

2,335 SqFt

Status Active

MLS # 6665100

Property Type Single Family Residence

Price Type --

Freshly painted interior! Gorgeous home boasting 2 bedrooms, a den, 2 bathrooms in the desirable CORTE BELLA! As you approach the home you will love the gated courtyard and immaculate landscape. The open floor plan is well designed with a dining room, living room, and great room. The kitchen offers beautiful upgrades featuring a peninsula island with a breakfast bar, elegant cabinetry with crown moulding, and wall appliances. The great room is open with plenty of natural light. The primary suite is over sized with a ceiling fan and a lavish ensuite bathroom featuring a seperate shower and soaking tub, dual sink vanity, and a walk-in closet. The backyard is easy to care for! Do not miss out on this home! Corte Bella offers an abundance of amenities to suit every lifestyle. Enjoy the 18-hole Kemper-Sports Owned golf course offering breathtaking views of green fairways, lakes, and mountains. Cool off in the full Olympic-size pool or heat up in a well-equipped gym with saunas for various classes like yoga, dance, and much more. Whether you are seeking a full-time AZ residence or a winter get-away this home is perfect!

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6510 S Hazelton Lane Unit 138 Tempe, AZ 85283

$538,822

3 Beds

3 Baths

2,145 SqFt

Status Active

MLS # 6779036

Property Type Single Family Residence

Price Type --

GREAT TEMPE HOME IN HIGHLY DESIRABLE GATED COMMUNITY! Rarely available, this architecturally unique interior, bright & spacious residence has two primary suites, each w/partially renovated, light-filled bathrooms & solid maple cabinets. High ceilings & large windows thru-out create an uplifting, open feel. Recent updates incl. new carpet & pad, (2) new ACs, dishwasher, fridge & freshly painted kitchen, dining, & hallways all in 2024. Open kitchen offers ample storage, large pantry & solid maple cabinets. Enjoy the community's pool/hot tub steps away. A mature Ash tree provides backyard shade, keeping summer energy bills low. Located near the US 60, Loop 101, and ASU, close to Trader Joe's, Changing Hands Bookstore, parks, etc. This low-maintenance gem won't last long!

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25203 S Kansas Avenue Sun Lakes, AZ 85248

$538,500

4 Beds

3 Baths

2,021 SqFt

Status Active

MLS # 6767478

Property Type Single Family Residence

Price Type --

Beautiful 3bd/2 bath main house(1621sf) with a lovely **GUEST HOUSE**! (400sf) = 2021sf total living space! Guest house has a living room, full kitchen, large bath with shower and safety seat. Bedroom accommodates a twin bed, nightstand and dresser. Large closet. Main house has been extensively renovated. Kitchen has new cabinets and lovely quartzite countertops. Both baths have tiled showers and new vanities and toilets. Tile flooring throughout. Backyard has been landscaped with artificial grass and a large gazebo. Great place for a firepit and outside seating. All in the busy community of Sun Lakes for 55+. Loads of activities ,pools, club house with the Sunset Grill and library. This is a great multi-generational home.

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