2017 was a robust year for Arizona’s home building industry as well as its residential real estate market, with record-setting home sales, prices, and investor enthusiasm is through the roof. And despite a shortage of property inventory, demand for both new and resale housing spiked—as did home sales. In fact, resale home sales in Arizona increased 7 percent in December 2017 over December 2016.

Metro Phoenix residential housing inventory

215 East McKinley Downtown Phoenix residential condo building (Photo: Delmastro + Eells, Inc.)

And 2018 is looking to be another healthy year for Phoenix’s real estate market.

New data from Arizona residential market research firm Belfiore Real Estate Consulting shows that increased home prices did little to deter home sales in the Metro Phoenix area and statewide, as high demand countered the confines of limited inventory, making 2017 one of Arizona’s best for home sales in years.

In 2017, homebuilders sold 11 percent more houses than they sold in 2016, and despite the fact that home sales typically decrease from November to December when people are focused on the holidays, Arizona home buyers were signing new purchase contracts in December 2017 at a 10 percent higher rate than in December 2016.

From January 1 through December 31, 2017, Arizona builders sold nearly 18,000 new production and semi-custom home contracts, which averages 32 homes per active community.

Thanks in part to an increase in available condominium units in the Metro Phoenix area, new home supply in 2018 is up 6 percent, providing the Metro Phoenix area—driven mainly by the Downtown, North Central, and Biltmore East markets—with the region’s most abundant new home inventory. Additionally, demand for apartments in Phoenix has been escalating consistently since 2013, while all-time low vacancy rates have been recorded during the last 36-48 months.

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Metro Phoenix residential housing inventory