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By: Al Macias on 09/03/2012
Low interest rates and a shrinking supply of foreclosed homes are driving buyers back into the new home market.
As KJZZ’s Al Macias reports, the Valley’s homebuilding industry is showing signs of life after one of the biggest slowdowns in history.
The sound of concrete being poured and rapid fire nail guns hammering away can be heard at construction sites across the Valley. Here in Gilbert, workers are finishing off the last 32 homes in a development that was started six years ago. Back then, homebuilders couldn’t build fast enough.
"Money really was too available," Buddy Satterfield of Shea Homes said. "That’s much different today. People can qualify, they’ve got to have a job. They’ve got to have good credit."
Satterfield has been in the business for more than 30 years and has seen the up and down cycles. He says more than 10,000 new homes may be built across the Valley this year.
Satterfield says that is a big difference from the middle of the last decade. "We would buy thousands of lots at a time because we were delivering as a division a couple of thousand homes a year; as an industry 65,000 homes just in the Phoenix metropolitan area. So the difference today is that we are delivering fewer homes, and going forward we won’t take down those large parcels of land," Satterfield said.
Interest rates as low as 3.5 percent, existing home prices up more than 20 percent over the last year and fewer available foreclosed homes on the market mean many first time homebuyers are turning to new homes. Ironically, homebuilders are facing some of the labor issues they had during the boom times: Not enough workers.
Industry experts say many left the state due to lack of work and Arizona’s tough illegal immigration laws.
Kevin Paschke is a construction supervisor who says he’s worked with many of the trade and craftsmen on his crews for years. He says it hasn’t been easy for many who lost jobs and saw their wages cut.
"They’re starting to see some positive movement in the market, which means wages are going to start to go up," Paschke said. "So I think the guys that’s (sic) hung in there for this long are committed to keep on going."
Several other homebuilders have developments in this south Gilbert area.
They believe the new Intel plant under construction nearby will attract buyers. Developers hope that as the rest of the Valley’s economy begins to pick up, this scene will be repeated.