The Arizona residential real estate market is on a resurgence signaling a significant uptick in raw land purchasing within the next year. There are certain indicators that signal peaks and valleys in the land and real estate markets. Along with permits and inventory, median home prices give a large sign as to where the market is headed.
The S&P/Case-Shiller national home price index, which covers more than 80 percent of the housing market in the United States, climbed 6.9 percent in the three months ending June 30 in comparison to the first three months of 2012. In July, new home sales were 25 percent better than a year earlier, existing home sales gained 10 percent year-over-year and developers applied for 30 percent more residential building permits.
Each of the 20 cities covered in the report recorded a gain in June, compared with the month earlier. In Phoenix, home prices were 13.9 percent higher in June than one year earlier, the highest gain of any of the 20 cities covered.
Raw land sales follow a similar, methodical pick-up within a year after the residential real estate sector records significant growth. Currently, finished residential lots are seeing double their value in comparison to 2011, with most foreclosures being flushed out. Raw land activity has started, but is not aggressive at this point with a limited inventory. Raw land is currently selling for approx $.10 to the dollar, which is a much higher drop than even the residential sector. This is a contrast to purchases made by solar developers over 2009-2012. During this time, solar developers have paid similar prices to what land was selling for during the peak of the market.
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