By: Catherine Reagor – Aug. 8, 2010 12:00 AM
The Arizona Republic
Amid the worst home-building slump in more than two decades, location has once again become the most important factor for metropolitan Phoenix’s new-home buyers.
After being pushed to the extreme edges of the region during the housing boom, young buyers are finding that prices have come down far enough to make homes in popular suburbs affordable
The lower prices are driving sales of new homes in the more-desirable areas of the East Valley, and those sales may signal the beginning of the next cycle in the home-building industry, which has traditionally fueled much of Arizona’s economy.
Nearly half of the 6,000 new houses sold in the region so far this year are in the southeast communities of Mesa, Chandler and Gilbert. First-timers, who no longer have to go out to the Valley’s farthest flung developments to afford a new house, are the biggest group of buyers in those areas.
Because fewer homebuyers are heading out to the region’s fringes, homebuilders trying to make money in the downturn and compete with foreclosures have had to find land in closer-in communities and cut costs and prices to be able to sell houses.
The strategy shift has helped several of Phoenix’s homebuilders survive the real-estate collapse and keep the area’s once huge new-housing industry alive. It also has opened the door for younger buyers to afford new houses in southeast Valley neighborhoods near freeways, shopping centers and better schools that only three or four years ago were out of their financial reach.
“People can now buy new homes in Chandler and Gilbert for half of what they cost during the boom or even pre-boom,” said Jay Butler, director of realty studies at Arizona State University. “Most of the homeowners who paid the higher prices years ago aren’t leaving, either.”
Residents who bought in these East Valley suburbs before the downturn are likely upset at the drop in home values. But they still like their neighborhoods, and with fewer foreclosures, their more-established communities remain attractive places to live – another benefit drawing new buyers.
Read more at:
http://www.azcentral.com/business/realestate/articles/2010/08/08/20100808arizona-real-estate-east-valley-housing.html
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