By Angela Gonzales | Phoenix Business Journal
The skyrocketing growth in the Valley’s residential real estate market is expected to continue through 2021, as homebuilders furiously buy land to build more homes to keep up with insatiable demand.
The Phoenix Business Journal recently invited some of the Valley’s top real estate experts for a recent panel discussion on the homebuilding sector outlook for 2021 as well as their take on what may happen with home prices.
“We’re growing at a rate year-over-year of about 20%, 25%, 30% every month when we look at snapshots,” said Jim Belfiore, founder of Phoenix-based Belfiore Real Estate Consulting and a panelist for the Feb. 25 homebuilding panel discussion. “And today, we have no issue with demand. Demand is extremely healthy. The issue is with supply. In fact, builders can’t find lots.”
But he also sees what he calls “a housing crisis in the making.”
With a limited supply of existing homes on the market and homebuilders trying to keep up with demand for new home sales, Belfiore said there essentially are no price controls.
“When you have what seems like unlimited demand that we can’t build to and you have extremely limited supply, you create pricing pressure,” he said.
More land auctions
Michael Ingram, founder of Scottsdale-based El Dorado Holdings Inc. and panelist, said homebuilder demand is keeping everyone extremely busy, from engineering firms to municipalities approving the projects.
“The turnaround time has been tough to get through some of the cities and municipalities,” he said. “It’s tough sometimes to bring the things together as quickly as we want to bring them together.”
Fred Hermann, president of the Phoenix division of Scottsdale-based Meritage Homes Corp., said he’s buying land on the outskirts of town to help keep home prices more affordable.
“If the size of the home is more important to them, then they’re going into more of the outskirts, where it’s more affordable,” he said. “but if location is more important, they’re going to be paying more money because of the area. And then there’s always the lifestyle with amenities. It’s a buyer’s choice.”
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