Tribune - May 2008
The Valley's new-home market showed more signs of steadying last month with some developments even seeing a slight uptick in prices.
A total of 1,890 new homes were sold in March, according to the latest Phoenix Housing Market Letter by analyst RL Brown. That's a 4.2 percent increase from the previous month but still nearly 50 percent below the same time last year.
The number of sales still isn't what the industry is looking for, but it marks a halt to the market's steep free-fall, Brown said.
Prices are stabilizing in areas where builders have rid themselves of excess speculative houses and are back in production mode, he said.
"Some builders are finding enough business to actually raise prices," Brown said. "It's a good sign."
An analysis of 4,754 floor plans shows a 9 percent increase in price over the past four months, while 60 percent saw prices remain unchanged.
Some builders raising prices are trying to create a sense of urgency for buyers, said John Fioramonti, senior managing director of Meyers Builder Advisors in Scottsdale.
Fioramonti said one developer in north Scottsdale has seen a big jump in foot traffic through the sales office, but people aren't taking the plunge. They're waiting for prices to drop further, he said. "The builders are trying to create a sense of the bottom has been hit," he said.
Fioramonti added that rises in price are being seen in developments closer to the urban core, not in outlying areas.
In places such as Maricopa, builders are facing off against sellers whose houses are only a few years old and are priced at $30,000 or $40,000 less, he said.
Builders are also still burdened by a lack of consumer confidence, a continuing wave of foreclosures and an oversupply of houses on the market, Brown said.
Sellers are "cluttering the marketplace," Brown said. "The smartest buyers are the ones who are shopping now, shopping carefully for real bargains."
