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Arizona housing market growing

Our state's housing market, homebuilding industry and residential real estate market grew in 2017, according to a residential market research firm. Home sales, prices and agents competing deals also rose last year. This real estate growth can provide opportunity, but also the need for continued legal scrutiny.

Demand for new and resale homes grew from 2016. Supply, however, was equalized by limited resale inventory. Projections also show that housing inventory will increase as builders try to meet demands and more agents will seek state licensure to engage in real estate transactions. Higher prices will also lead to higher sales commissions.

Homes sales by homebuilders also grew by 11 percent in 2017 from one year earlier. Builders sold an average of 32 homes for every active community during 2017. This caused 18,000 new production and semi-custom contracts.

The supply of new homes rose by 6 percent because of the growth of condominiums in the Metro Phoenix area. Apartments also rose over the last five years and vacancies were at the lowest level in the last 36 to 48 months.

Metro Phoenix also continued as one of the affordable metropolitan areas in the western part of the country. Last year, the median home price was $245,000.

New home and resale homes were the highest since 2006 as the cost of renting is considered less favorable than owning a similarly-sized home. Foreclosures also declined to practically normal levels by dropping 22 percent in 2017 and 28 percent by the third quarter of 2017.

This trend is expected for 2018. During the first 10 months of 2017, there was a 12 percent increase in construction permits with a projected total of 21,200 for the year. This is anticipated to grow to 23,500 in 2018 and 25,400 in 2019.

New home sales should also increase in 2018, according to predictions. Builders are buying more land, developing new subdivisions, working on a growing number of urban infill projects and there is vertical growth with condominium and town homes.

This growing residential market, however, does not alleviate the need for legal scrutiny of transactions and even provides opportunities for problems and taking shortcuts. An attorney can help assure that transactions comply with the law and protect the parties.

Source: Arizona Big Media, "Just how hot is Arizona's housing market?," Sage Schneider, March 20, 2017

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