Almost 7.2 million people are lucky enough to call Arizona home and 200 people are moving to Arizona every day for that same opportunity. After all, it’s one of the fastest-growing and most beautiful areas in the country.
The COVID-19 pandemic only increased this trend further. Arizona became a hotspot for those looking for their forever home. When many struggled to find that forever home, a new trend sparked: if you can’t find it, build it.
New construction homes became a solution to the decreased inventory of houses.
But, what exactly is the current state of the market for new construction homes in Arizona? As an influx of new prospective homeowners floods the area, we need to know what kind of market 2022 will bring.
Don’t fear — new construction housing is on the rebound in Arizona. Keep reading to learn about the updates on this great state’s housing market so that you can get in on the action at the perfect time.
Welcome to the Seller’s Market
The year 2021 displayed one of the most competitive housing markets of all time, with everyone trying to buy housing. This trend was nationwide, and Arizona was no exception.
Due to the COVID-19 pandemic in 2020, the housing business was all but halted completely. This led to a huge increase in demand for housing in the following years.
The issue? Lack of supply.
The number of hopeful homeowners far outweighed the number of homes on the market. This gave sellers the power to price their homes way above market value.
In recent years, we’ve seen homes go for tens of thousands of dollars above the asking price after a hefty bidding war.
Where’s All the Inventory?
Another impact of the pandemic that we are all aware of by this point is the lack of inventory and major supply chain issues.
There were not enough goods to go around. Housing was no exception here.
A new solution came to the forefront: build more homes.
The idea was to build more new construction homes to meet the unprecedented demand for housing. This was a good idea in theory, but like the past few years have proved, life gets in the way.
Supply chain issues put a major delay on new housing construction, meaning that new construction homes took much longer to build than anticipated. A 5.2 million dollar supply gap in new construction homes meant that new construction didn’t save the housing crisis as we might’ve expected.
Good News: Builders Aren’t Worried
In 2022, home builders stepped up the challenge and ramped up their production to meet climbing needs. Want more good news? Production rates are especially high in the West and South, which made up about 75% of home starts in 2021.
Sounds like Arizona is a good place to be!
The number of housing permits granted in cities like Phoenix means that the increase in new construction housing shows no sign of faltering and that 2022 could be the year of the new build.
Builder confidence levels in the South and West of America are at record highs. This can also be attributed to the number of housing permits that were issued in these areas in recent months.
A Changing Workforce
Another factor to take into account is how life, in general, will be changing in 2022. Yes, housing prices may be on the rise, but so is employment. We’ve seen an increase in salaries for jobs and more and more employers are looking to hire.
An increase in remote work opportunities also allows homebuyers to shop with a little more flexibility than before.
Homeowners are ready to make a move and the market is waiting for them.
Rents are also on the rise and are predicted to grow 5% faster than home prices are. Home buying will likely be the more affordable path to take for those who can swing it.
Get Ready for Sales
For 2022, data shows that home sales will hit their highest numbers in the past 10 years. If you’re in the market to buy, you won’t be the only one.
Homeownership rates are set to grow.
Prepare yourself to out-bid other buyers and face higher prices, bidding wars, and quick turnarounds.
Phoenix Is the Place to Be
As we marvel at how Arizona’s housing market is skyrocketing, we have to give credit where credit is due. Phoenix is a major contributor to Arizona’s housing rates. Rates in Phoenix will continue to appreciate and $469,500 is the projected median price for the area in the upcoming months.
Phoenix may show more housing options than the surrounding suburbs, but prices may be higher. Consider all the areas that you’re interested in living in and then ask yourself how close to the action you need to be or if you’re willing to make a bit of a drive to buy sooner.
Luxury Housing May Need to Wait
If you’re looking to buy a luxury home in Arizona, you may find even less for sale.
Luxury housing has shown a tight lack of inventory, so if you’re in the market for a lux house, you may need to be patient.
Looking to Buy in Arizona? Consider New Constructions
Mortgage rates are climbing without any sign of stopping. Don’t make the mistake of waiting around in hopes that prices will drop. There aren’t signs that the market will cool anytime soon, let alone in 2022.
So, if you’re looking to buy, get in on the action before prices climb again.
Looking toward new construction homes could be the way to go, as already built homes will continue to be few and far between.
Keeping in mind an increase in production rates, a lack of other housing availability, and a strong seller’s market, new construction housing is where many are turning.
If you’re searching for your dream house and coming up short, don’t despair, it may not be built yet. It’s like they say, if you want something done right, you have to do it yourself. Do your research and start to compare builders in your area today!