New homes are being built in the Phoenix area at the fastest pace in 10 years, and prices are climbing faster than they have in five years.

All signs indicate that the Phoenix metro homebuilding market is in recovery.

More than 1,950 new homes were sold valley wide in May, and the pace of sales for the year is 18 percent ahead of last year as reported by Belfore Real Estate Consulting and R.L. Brown's Phoenix Housing Market Letter reports that May was the best month for new home sales since March, 2008.

Brown also reports that the median new home price is up almost 3 percent from last year to $330,000. That's about $70,000 more than the median price of existing home sales.

Forecasts call for homebuilding to steadily climb valley wide to more than 26,000 annually by 2020.

However,, homebuilders and analysts see a few big obstacles in the way of this recovery: rising labor, land and construction material costs.  All three will add to the cost of a new Valley home.


Source: Arizona Republic.