New report says housing prices, supply on the rise in Phoenix area

A new report from ASU’s W.P. Carey School of Business finds that home prices in the Phoenix metro area are climbing. The median price of a single-family home in October was about $7,000 higher than the previous four months, and 34 percent higher than the same month last year. Sales of new homes are 85 percent higher year-over-year, and supply is up too -- but the report’s author expects that supply to decline as winter begins.

ASU’s Mike Orr said while new housing construction is on the rise, the demand for homes right now is greater than the supply.

“Overall demand for housing is strong, but of course, it’s easier to build a house way out a long way from the center of Phoenix because the land is cheaper there," Orr said. "You can get so far out that there aren’t that many people interested in living.”

Orr also said housing construction is not meeting current demand, and that builders are short of some critical elements: “Probably the most important being the tradespeople who actually specialize in the skills you need to put a house together. We’re very short of plumbers, roofers, painters, framers, concrete layers: all those disciplines, we’ve really lost a lot of jobs over the last four years.”

Orr said while an increase in housing construction can cause worry, some of us are overly inclined to expect a real estate bubble.