Steady new-home sales a good sign for market

Oct. 5, 2007 06:56 PM

Resales across metropolitan Phoenix were down again in August, but new-home sales held steady. It could be a sign that the thousands of speculatively built homes across the Valley are selling while builders are pulling back on putting up more new ones. Both moves will help the resale market because fewer listings mean less supply.The Phoenix Housing Market Letter tracked 3,110 new-home closings in August. It was the fifth straight month the figure didn't lose any ground.

New-home prices have dropped since last year, which also is helping sales. The typical new Valley home price shot up to $285,000 during the frenzy of 2005, but this year slipped back to the $255,000 range. But the report's publisher, housing analyst RL Brown, said based on home-price increases during normal years like 2002 and 2003, the median price of a new home likely should be even lower, in the $220,000 range now.

Another good sign for metro Phoenix's housing market is that listings seem to be flattening. According to the weekly tally of David Blank of the Freedom Team at National Realty Brokers, the number of homes for sale in the Valley stabilized at just under 57,000. Part of that was due to the expiration of some listings at the end of the month, so next week will be telling.The uptick in new-home closings and leveling off of listings hasn't helped the Valley's resale market yet. Early counts by real-estate agents show existing-home sales fell again last month. And Brown is still giving the housing market a "code red" rating, but he can see it turning the corner in early 2008.

Read the entire article http://www.azcentral.com/business/columns/articles/1005biz-catherine1007-ON.html

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Erika Madsen
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Re/Max Power Realty
"Your Advisory Team" Founder/Manager
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