By Holly Henbest, Realtor
With so much talk about our supply and demand imbalance, a lot of people are left wondering if new construction will solve the problem. In the short term, unfortunately there is not enough new construction in process to make a significant impact to our supply.
To help you stay informed, here are some key facts to be aware of regarding new construction.
• Nationwide, the data shows that about 50% of new construction is for single family homes. The rest is for multi-family housing – apartments, condos, and townhomes.
• There were more homes under construction in 2003, 2004, 2005 and 2006 than there were in 2021 and today.
• New construction has been building at under average quantities for 12 years. So, we have 12 years to catch up on.
• Nationwide, 2021 saw 1,337,800 completed homes of all types. This is below the long-term average, which is 1,396,000.
• In the U.S., 2021 saw 966,900 completed single-family homes. This is below the long-term average, which is 1,002,100.
• In the West region of the country, 2021 saw 319,500 completed homes of all types. This is below the long-term average, which is 341,100.
• Single family home new construction in Maricopa County has declined over the last 12 months and new permit counts are in a downward trend.
Another impact to new construction has been a labor and supply challenge because of the pandemic. Construction supplies went up in price and suppliers experienced shutdowns and difficulty producing and delivering products in a timely manner. We’ve all heard stories about people waiting months for appliances and flooring—and that’s just a slice of the delays. We’ve also encountered pandemic-related labor challenges.
For those expecting that 2022 would start off with a bit of a post-holiday lull, the robust buyer demand resulted in continued competition for homes. We had a further reduction in inventory and saw a spike in sales prices.
January 2022 versus December 2021:
• 17% fewer listings.
• 19% increase in listings under contract.
• Almost $20,000 increase in average sales price.
Although this is a competitive market and getting buyers into homes remains challenging, there is good news. This year, The Henbest Team has secured many contracts for buyers and none of them were cash buyers. Each offer has been a part a bidding war, but none of them were the highest offer. So, there are still ways to get your offer accepted and get you into your new dream home.
If you’re thinking about buying, then consider acting sooner than later. Interest rates are currently rising, so the sooner you secure a home, the better the rate. We should see a nice increase in inventory this spring, so there will hopefully be more homes to chose from. If you are thinking of buying or selling real estate, email me at
email@example.com to connect.
Holly has been a Desert Ridge resident since 2000 and has been a Realtor since 2006. She is the leader of The Henbest Team with Realty One Group. Holly is ranked in the top ½ of 1 percent of Realtors in Arizona and is a certified luxury marketing expert. She was also ranked #24 in 2019 by the Phoenix Business Journal and recognized by So Scottsdale! magazine as a Real Estate Superstar for 2019.