A large bump in housing permit requests in both Phoenix and nationwide is a good indicator the new home market is making a comeback.
Though not quite hitting the numbers they were 20 years ago, permits are on the rise, indicating recovery in the housing market and more options for buyers looking to start or add to their real estate portfolio.
Permits for multifamily homes — such as duplexes, townhomes, condominiums or apartments — have seen a larger uptick than those for single-family builds.
In the Phoenix area, the cities of Gilbert, Peoria, Mesa and Goodyear, along with parts of north Phoenix, are currently favorite areas for permit-acquiring builders, according to Michael Orr of The Cromford Report.
Orr, who is also the director of the Real Estate Center at Arizona State University’s W.P. Carey School of Business, told KTAR’s That Real Estate Show that a lot of multifamily homes are being constructed in the Phoenix area to meet the demand for rentals.
“We’re somewhere in the 7,000 to 8,000 a year, in terms of new units for multifamily,” he said. “And it looks like we could be in the 14,500 mark for single-family permits.”
Orr said most of these housing permits are on land that builders acquired some time ago. While there has not been a lot of acquisition on new land, Orr said builders will eventually have to find new lots if they continue to build at the current rate.
Nationally, permits for future home construction are seeing some of the highest numbers since August 2007, according to the U.S. Department of Commerce.
Citing construction statistics for May 2015, the Commerce Department said permits for multifamily housing soared 24.9 percent from May 2014. Single-family building permits saw a 2.6 percent increase.
Michael Orr can be heard weekly with Realtor and radio host Diane Brennan on That Real Estate Show, which airs Sundays at 8 a.m. on KTAR News 92.3 FM.