New-Home Market Stays on Fast Track...

New-home market stays on fast track, from the Arizona Republic, reports that Metro Phoenix's new-home market charged into another record last year with 63,570 new home permits, according to local housing analyst RL Brown who spoke yesterday at the annual Phoenix Housing Forecast at the Desert Ridge Marriott. He expects the market to slow to 60,000 permits this year, and he wouldn't be surprised to see permits hit the 65,000 milestone in the next five years as the population expands. Brown based his expectations on continued growth in jobs and population and house prices that appear affordable compared with other Western cities. Brown said that the median price for a new home rose $98,000 in 2005, sitting at $299,000. He said that type of increase is not sustainable and predicts that new home prices will only rise 4 percent in 2006. Brown cited soaring land and material prices as reasons for the big increase last year. Brown also commented that he believes only 15 to 20 percent of the high rise condo projects will ever be built. His concerns for "deal busters" in the market include terrorism, further erosion in affordability, interest rates rising above 8.5 percent, a dumping of properties by investors and growing transportation snags.

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