HOUSING

Home sales surge as more residents choose to buy instead of rent

Independent Newsmedia
Posted 8/13/20

Despite the COVID-19 pandemic, home sales in the Greater Phoenix area are increasing as families opt to build or buy instead of renting.

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HOUSING

Home sales surge as more residents choose to buy instead of rent

Posted

Despite the COVID-19 pandemic, home sales in the Greater Phoenix area are increasing as families opt to build or buy instead of renting.

Many, like newlyweds Robert and Erica Villalpando of Goodyear, are going with new builds as the inventory of existing homes decreases.

The couple is in the process of having a home built in Estrella Commons near Interstate 10 and Estrella Parkway in Goodyear. They anticipate moving in in September.

The Villalpandos chose the  Fulton Homes community because it offered the floor plan they needed to accommodate their combined families.  Fulton Homes offers 23 customizable floor plans in Estrella Commons, with home prices starting in the $290s, according to its website, fultonhomes.com.

“Everybody needed to have their own space,” Mrs. Villalpando said. “We’re from this area and really like it, so we didn’t want to move out of it.”

Estrella Commons has seen an increase in buyers looking to make the Goodyear area their home, Fulton Homes CEO Doug Fulton said in a release. Many are first-time buyers, while others, like the Villalpandos, need more space for their growing families

The Villalpandos' home will have loft space for their children, and the master bedroom at the opposite side to maximize privacy.

The community’s outdoor spaces, which include park with ramadas, play areas and barbecues; greenbelts and walking paths, also were big draw for the family. 

“We really thought the neighborhood paths were great,” Mrs. Villapando said. “If the kids want to go out bike riding, they don’t even have to leave the community. It’s like living in a park.”

First-quarter 2020 home sales skyrocket

First-quarter 2020 saw more sales than any first quarter since 2006, according to Belfiore Real Estate Consulting’s July housing report. A total of 31,368 closings took place, 15% more than first-quarter 2019, per CoreLogic data. Last year, 5% more closings took place than in 2018 — more than during any year since 2006.

Looking deeper into 2020, 122,501 closings are now projected, according to the report.

Belfiore Real Estate Consulting President Jim Belfiore called the four months following March’s COVID-19 shutdowns “the fastest positive turnound in decades,” in the July report.

“Buyers are signing contracts faster than builders can build, with historically low mortgage interest rates pushing demand so high that resale supply is now at 15-year lows, ready-to-deliver speculative new supply is at 78-month lows, and pricing pressure is on,” he said in the report. “Home shoppers that want a house are now being pushed to hurry up and wait, as construction backlogs are growing.”

Such is the case for Fulton Homes.

“Sales and traffic have been strong across all of our communities this summer as homebuyers look to lock in on the great mortgage rates,” Mr. Fulton said.

According to the Belfiore report, builders sold 28% more homes during July than in the prior 30 days, and while sales were 7% lower recently than during the same period a year ago, the surge in buyer demand was expected to wipe out deficit in August.

Going with a new build was a plus for the Villalpandos. While Mrs. Villalpando said she was concerned the process could become overwhelming, especially visiting the Fulton Homes Design Center to customize their spaces, Mr. Villalpando, who had experience buying a new build, said he appreciated how Fulton Homes has managed the process.

“From the first visit to now, they’re on top of everything in the building process,” he said. “Even at the design center it was pretty simple and there wasn’t any pressure for upgrades. Whatever you want, you can put in your house.”

Resale inventory dropped to new low in July

Resale home demand also has increased. Cromford Report data suggest the number of existing homes that closed escrow in July was 29% higher than the number in the prior 30 days. Demand compared with a year ago also was up by 8%, and pending sales were 21% higher.

The report attributed the demand to “low mortgage rates, optimism despite rising COVID-19 infections, and apparently, people with more disposable income. Builders are offering sub-3% mortgage interest rates, the lowest rates offered on record. Lower rates mean lower payments. With word spreading about the rates, lenders are lending at capacity, and they are making more money than they were making during the booming first quarter.”

Additionally, resale supply fell dramatically — to the lowest levels on record since 2005 — from mid-June to mid-July, as sales surged.

The MLS listed 14,118 resale homes in mid-July, according to Cromford Report.

“Resale supply is so low now in many areas that parties wanting to buy a home are likely being forced to consider a new home even if they desire a resale,” the Belfiore report stated.

Editor’s note: Executive Editor T.F. Thornton and Peoria Independent News Editor Philip Haldiman contributed to this story.

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