So what is real right now? Is the waiting over?
What is real is that market conditions truly are beginning to point to a return to new home demand. Here is what we know:
- Cost to rent is up significantly
- Home prices are way down
- Foreclosures are slowing
- New jobs are being created
- New build numbers are at levels not seen in a decade
All of these indicators point to an oncoming demand for renters to move across the street to a new home of their own. The time is coming for families and couples to get back into the game. New homes being built will be a large part of that story.
In non distressed markets, jobs creation is showing some good growth. Rents and home prices are rising at about the same pace as apartments are in short supply. As resale home inventory is becomes thinned out, people will realize how few new home builds are available currently, only 78,000 in 41 cities studies by Metrostudy. That is down from 343,00 units at the peak! And is down from a decade ago as well. Construction is ripe to take off!
Even in distressed foreclosure markets like Phoenix, the outlook is indeed looking better. Investors have been an important part of buying through distressed properties. Families that have been displaced are moving into homes as renters, further reducing the number of homes on the resale market. Most importanly, foreclosures are slowing. We will hit some bumps, but the overarching story is that the health of the resale market is beginning to return. New construction will follow suit!
For several years the fundamental of cost to own vs. cost to rent along with new build levels has given a number that indicates an unhealthy market but for the first time in a long time, it would appear that that number is going in the opposite direction. One where confidence returns, home valuations rise, the American Dream becomes attainable once again.
To read a full article explaining why new home demand is on the near horizon, please read this informative article.
Additional news from Builder Pulse,  Market Watch and Arizona Republic.
