Why are New Home Prices on the Rise?
1) There is a Trade Shortage.
Across the country and not just here in Phoenix, there are not as many skilled construction workers. We are seeing a shortage of available plumbers, electricians, framers, etc. This has been a growing trend the past several years as many left the business after the market recession in 2008 coupled with a younger workforce no longer wanting to take these jobs.
2) Demand exceeds Supply.
We have a larger Buyer pool than available homes for sale… it’s simple economics with Supply & Demand. There is a low inventory on the resale market as well, which adds to this effect.
3) New Developments in desirable areas.
Much of the new construction is occurring in “new” and trendy areas, such as North Peoria’s 85383 Zip Code. With Vistancia, Westwing Mountain and soon to come Lake Pleasant Heights, there are thousands of homes yet to come. Lots of new retail, restaurants and shopping venues highlight the commercial region as well.
4) Building Material Costs.
Lumber especially, but most materials are not going down in price. Hence, supply and demand…
5) Regulations… Health Insurance… Etc
With Health Care costs rising all across the Country, it’s made it more expensive to employ and ultimately that cost gets passed down to the end user. With all the government and environmental regulation, there is more attention needing to be paid in order to remain compliant, which means more cost.