New Vs. Resale Home Sales in Greater Phoenix

October 24, 2008

New home sales drop dramatically while resale home sales surge.

Sales, permits and demand is down for new homes: and that is a good thing. We don't need more inventory in the market and there are plenty of resale homes which are virtually new: with some being less then a year old. Many of these are REO properties or lender owned properties which represent a very large part of that sales market in many parts of the Phoenix valley.

The chart below represents 4 points for each year since 2003 for new and re-sale home sales. The numbers are a combination of both single family home and condo sales in Maricopa County not just the ARMLS.

Note that the sales of new homes was pretty steady over the years. Sales increased from 2,116 in January 2003 to a peak of 4,378 in December 2004 then holding steady until the first big drop 2,402 in February 2007 and a second huge drop to 1,314 in January 2008.

Resale homes had a greater change then new homes. While there was only a slight change in new home sales during the boom, resale homes jumped up dramatically. There are many reasons for this an anomalies.

One thing that was common during the boom was to sell a home as soon as it was finished. Once the new owner took over and sold it right away it was a resale home even though it was new. Some homes changed hands multiple times in a short period.

Sales of new homes also held steady 2007 while resale home sales went down dramatically to a dip in January 2008. It was also in January 2008 when sales of new homes dropped a lot and have held steady at the new lower pace since then while resale homes have increased rapidly as the flood of affordable homes hit the market.

SFR & Condos	New Homes	Re-sale Homes
February 2003	2,322	5,863
May 2003	2,614	8,439
August 2003	3,015	8,603
November 2003	2,959	6,276
February 2004	2,943	6,686
May 2004	3,267	9,943
August 2004	3,928	9,862
November 2004	4,378	9,035
February 2005	3,329	8,588
May 2005	3,770	12,807
August 2005	3,855	13,004
November 2005	3,443	9,127
February 2006	2,611	6,991
May 2006	3,591	8,730
August 2006	3,313	7,390
November 2006	3,333	5,938
February 2007	2,402	5,346
May 2007	2,473	6,416
August 2007	2,422	3,430
November 2007	2,296	3,315
February 2008	1,309	3,265
May 2008	1,306	5,182
August 2008	1,115	5,024