5 Things to Know About the New Home Sales Market
February 2, 2022
The Grand Canyon State continues to be a significant hot spot for real estate sales and population growth. As the overall housing market maintains its steady upward trajectory, the new home sales market forges ahead in the same positive direction, with little to no signs of slowing down. This high demand for new homes is a trend we’re seeing nationally, and even more so in Arizona.
Keep these five things in mind when thinking about the new home market this year:
- New Home Permits
In the first half of 2021, we saw some pretty significant year-over-year increases in the number of building permits for new homes, nearly 27% up over the same timeframe in 2020. While the months that followed weren’t nearly as high, there was still positive growth compared to 2020.
- All-time High Demand
It might not come as a shock that the demand for new homes saw all-time highs throughout 2021. But what might shock you is that the uptick in demand continued into October and November, seasonally when demand typically slows down, according to Zonda Market Research. People continue to move to Arizona in droves and they’re willing to pay to fight the demand.
- Possible Home Builders Lottery
As the demand for new home builds continues, buyers should be prepared for the possibility of a lottery system, especially if they’re looking to work with a specific builder. Not only have builders had a hard time keeping up with the growing need, there are supply chain issues and labor shortages causing new home costs to soar. While many builders have been able to stave off the lottery system, it’s something to keep an eye on in 2022.
- Going the Distance for a Better Deal
We’re in the midst of one of the hottest markets we’ve ever seen, and as such, buyers have had to make some concessions on what they’re willing to pay for and what they really want out of the property. In the case of new home builds, recently, more buyers are willing to sacrifice drive time and location in exchange for the prospect of achieving their dream home.
- Your Assistance is Needed.
While some buyers might be under the impression that they don’t need an agent for a new home build, in today’s market, it’s more important than ever. Show them the value of having representation on their side. Help them understand the high demand and reasons why it’s becoming more expensive or taking longer than expected. Consider sharing new communities just out of your buyer’s preferred location to help them fully understand their options to build. Navigating a potential waitlist or lottery situation is another great example of a scenario that buyers may never have experienced on their own.
As the overall real estate market continues to be competitive, it seems as if the new home sales market will follow suit. Keep in mind that some buyers might think building is a less stressful route compared to purchasing an existing home, so make it a best practice to fully prepare your clients for the road ahead when it comes to building a home. Knowing the status of permits, lotteries, and the demand will help you better serve all clients, not just your new home buyers.