Evidence of Active Adult Pent Up Demand

By: Daniel Benson, Belfiore Real Estate Consulting

With 300 days of sunshine, affordability, and an abundance of recreational activities, it’s no surprise that Arizona is one of the most popular retirement destinations. Although active adult sales rates have fallen with the recession, demand is fairly strong.  Some retirees are simply waiting on economic conditions to make the plunge into the Arizona Active Adult market.

A good indicator of this active adult pent up demand is evident in reviewing BREC’s most recent market survey regarding Pulte’s Sun City Festival Master Planned Community, located in North Buckeye.  In looking back to 2011 for a year-over-year comparison, comparing the same selling periods, Pulte has doubled their 2011 reported sales rate while at the same time reported traffic actually decreased by approximately 20%. Some potential active adult buyers have already made sales office visits and have had the last several years to shop all active adult offerings, yet they have been either reluctant to buy for hopes of finding the bottom or simply waiting to sell their existing home until market conditions improve. Recent improvements in the resale market, and the economy as a whole, may have gotten this ball rolling, and given these buyers a reason to finally make purchase decisions.

Palm Valley Leaders

By: Daniel Benson, Belfiore Real Estate Consulting

After nearly two years of fierce competition amongst Palm Valley builders, two builders stand-out. Ashton Woods and Meritage have outsold their competition by 40% of more. Builders reported an average sales rate of 1.5 home sales per month in 2011. Meritage, who doubled this competition average, reported 3.4 home sales per month and Ashton Woods followed at 2.5 home sales per month. Both builders reported their hot selling point was approximately $73-76/SF (offering base prices). Ashton has also begun 2012 with a bang, selling 9 homes between BREC’s December & February survey!

Signs of Recovery not limited to East Valley…In West Valley Verrado showing Exceptional Year-Over-Year Improvements

By: Daniel Benson, Belfiore Real Estate Consulting.

After analyzing BREC’s most recent surveys of the North Buckeye submarket in the West Valley Region, the data shows Verrado has experienced great YOY improvements. In BREC’s most recent survey (2-3-2012), Verrado builders experienced a 3.1% base price increase in comparison to the same survey period one year ago (This includes all Verrado production builders who have been actively selling for the last year). Verrado also experienced great YOY increases in demand. According to reported builder traffic, traffic increased approximately 50% in a YOY comparison. Sales rates were even more promising; Verrado builders reported nearly doubling their 2-month sales rates in comparison to the same period in 2011. Stay in tune with Phoenix’s residential recovery by joining the BREC team today!

Another bright spot for the East Valley: Monterey one of first to dive back into Luxury Market in East Valley, gamble definitely paid off!

By: Daniel Benson; Belfiore Real Estate Consulting 

In a residential market which has been dominated by first time buyers and cash flow investors, Monterey Homes (Luxury Brand of Meritage Homes) made a gamble to pick up 51– ¾ acre finished lots in Gilbert. This gamble paid off big for Meritage, who has nearly sold out in just one year of opening up shop, not to mention successfully raising base prices on 3 separate occasions. Monterey was able to maintain 6.0 home sales per month at an average offering price of $455,500 since opening for sales (the average sales rate for the Valley as a whole was 1.5 home sales/month in 2011). Of course price point, and even more importantly pricing relative to square footage and lot size, gave Meritage a direct advantage over competing luxury product. Meritage’s offering pricing was nearly identical on a price/SF basis with Taylor Morrison at Trovita Estates but Meritage beat its other rival luxury community K . Hovnanian’s Estates at Annecy by nearly $9/SF. The even more telling story is when you compare offering prices relative to lot sizes. Meritage’s offering pricing relative to lot size blew its competitors away offering at $13/SF versus Taylor Morrison at $26/SF and K. Hovnanian at $20/SF.  Seize opportunities in the market like this by truly understanding your competition… join the Belfiore Real Estate Consulting Team today!

2011 Ends with a Bang for Queen Creek! Sales, Traffic, Base Price Increases!

By: Daniel Benson; Belfiore Real Estate Consulting

Sales and traffic numbers coming in for 2011 year-end are phenomenal! One new home sales agent even went as far as to say Nov/Dec 2011 was the strongest Nov/Dec, in terms of demand, they had ever seen in their 30 year career in new home sales. BREC is still processing and analyzing current East Valley market data but a quick look at Queen Creek data paints a very clear picture. When considering same shop/year-over-year comparisons of Queen Creek Subdivisions (which were open in Nov/Dec 2010), builders should be optimistic for strong recovery in 2012.

Belfiore Real Estate Consulting Queen Creek Submarket Data:

• Nov/Dec 2010 builder reported monthly sales rate: 1.12 Home sales/month
• Nov/Dec 2011 builder reported monthly sales rate: 3.62 Home sales/month
  • This equates to a 223% YOY increase in builder reported average sales rates for Queen Creek.
• Nov/Dec 2010 builder reported weekly traffic average: 9 potential buyers per week
• Nov/Dec 2011 builder reported weekly traffic average: 13.65 potential buyers per week
  • This equates to a 52% YOY increase in builder reported weekly traffic for Queen Creek.
• Of the 20 actively selling subdivisions in Queen Creek 8 communities raised offering base prices between BREC’s November and January surveys.

Recovery is clearly already underway in the Phoenix MSA Homebuilding Industry. Don’t fall behind the doldrums of the national media, trust your local analysts for where we are today not three months ago… join the Belfiore Team today!

Belfiore Real Estate Consulting Annual Client Permit Forecast

By Daniel Benson, Belfiore Real Estate Consulting

For the second consecutive year, BREC conducted its annual client housing permit forecast this last week. As part of BRECs KnowledgeBase product, BREC clients are invited to attend its Market Update Presentation and Roundtable Session. The quarterly presentations continually attract many high-level local real estate players including bankers, developers, brokers, homebuilders and lenders. At the conclusion of the 2012 1Q Market Update attendees cast their 2012 permit forecast predictions…..and the consensus….continued demand improvement….although gradual. In comparison to 2011, attendees predict on average a 20.2% YOY increase in permit pulls (2011 AVG = 8,119 / 2012 AVG = 9,762). When considering only those attendees that cast a forecast prediction in both 2011 & 2012 the YOY increase was just slightly lower at 18.2% (2011 AVG = 8,127 / 2012 AVG = 9,608).

BREC crowned the 2011 Permit Forecasting Gurus at last Thursday’s meeting- Carol Grumley of Standard Pacific Homes and Brian Rosella of Cassidy Turley.  Carol and Brian forecast closest to the projected 2011 single-family permit total, 7,130 permits.

BREC projects 10,400 permits for 2012. Optimism for an improved residential market continues to grow so make sure you are in tune with WHERE the Arizona residential market is going and WHEN with Belfiore Real Estate Consulting!

 

Promising Mesa Gateway Development Shows Bright Signs

By: Daniel Benson, Belfiore Real Estate Consulting

Construction is surging along on First Solar’s solar module fabrication plant at DMB’s Mesa Gateway Master Plan. The first phase, which is envisioned to be the first fabrication building of four, will cover approximately 30 acres at the south west corner of Signal Butte Rd and Elliot Rd in Mesa Arizona. The first phase is expected to generate approximately 600 clean-tech jobs and upon full build out of the plant expansion the fabrication campus is expected to house 4,800 new jobs.

The First Solar campus is a great early success for the Mesa Gateway Master Plan. Recent subdivision sales are also following in the footsteps of this success. Since First Solar’s official announcement in March, homebuilders in the Highland Ridge Master Planned community (directly adjacent to the First Solar Site) have reported selling 100 single family homes which equates to approximately 12.5 homes per month for the Master Plan as a whole (which only has 2 active builders). This is a great sign for demand in the area. Coupled with great up-and-coming schools, affordability, and innovative future employment development, the Williams Gateway submarket appears to be in line with DMB’s future vision for the area.