According to a report released last week, new home sales in the Phoenix-area were 28 percent higher in March than in February.* That in itself is great news, but even better, reported the Arizona Republic, is that “many of the recently sold new homes were built last year or the year before, either speculatively or for buyers who pulled out of deals. Depleting the inventory of built-but-unsold homes will help the area market rebound.”

Some factors to consider:

·         The Phoenix-area housing market won’t rebound until supply is once again in line with demand.  That means the excess housing inventory will have to be depleted.

·         Builders have slowed construction of new homes dramatically this year; which is a good thing because that means sales have to largely come from existing inventory.

·         Foreclosures add homes to the existing inventory; slowing foreclosure rates – which we’ve seen recently – will help the market move toward stabilization.

Local real estate experts are optimistic that the Phoenix-area real estate market is stabilizing, even beginning an ever-so-slight uptrend.  According to the Republic, “both pending and active listings are showing prices have climbed in the past two weeks. Pending and active listings are key indicators of future home sales and prices.”

*Note: These numbers are a bit different than the ones I blogged about on April 21 in this month’s “Greater Phoenix Area March Real Estate Market Update.”  That’s because these numbers cover new home sales and the numbers I blogged about on April 21 cover resales (also called existing home sales).

What do you think? Click on the “Comments” link to join the discussion!