Solutions in sight for metro Phoenix housing crunch, experts say
This story is part of KTAR News’ “Arizona’s Rising Real Estate” weeklong special series on 92.3 FM, online and our app.
PHOENIX — All week long, KTAR News 92.3 FM has brought you stories of buyers, builders and leaders who have described the agony of trying to find homes in an increasingly expensive market.
Experts offer no easy fixes, but fear not as they still offer solutions.
The real estate market will correct itself eventually, but not by much.
“When that time comes, I don’t know if it’s a year out, or six quarters out,” said Chris Camacho, president and CEO of the Greater Phoenix Economic Council.
It will be no easy feat. As of mid-May, only about 5,000 homes were listed in the Phoenix metro area with a median list price of $345,900.
The supply of homes available is down to eight days when it’s usually a six-month supply.
Additionally, metro Phoenix has a rush in population growth and housing demand — with fewer places to build.
“More affordable developments can be completed in a timely manner if we have the dirt to be able to build it,” said Katie Gentry, a research analyst with ASU’s Morrison Institute of Public Policy.
Gentry says solutions start with governments freeing up more public lands and speeding up zoning processes. She then called for more public pressure to build affordable, or low-income, housing.
“It’s not any less expensive to build a luxury apartment as it is to build an affordable development,” Gentry contended, but builders profit more from “luxury” digs.
So, Gentry wants the legislature to match the state’s low-income tax credits to the federal ones.
“It would build approximately 6,000 new affordable units each year, but still not nearly enough — we’re still short 135,000 units,” she said.
Camacho calls for more homebuyers’ credits and access to equity.
Meanwhile, Arizona desperately needs builders and skilled workers — and schools to train more of them — as we emerge from the COVID-19 pandemic.
“As the stimulus burns off, I hope that we head back to under 6% unemployment,” Camacho said.
He also puts forth an unpopular solution — raising mortgage interest rates to reduce buyer demand and increase housing supplies.
“The Fed is trying to help balance this, help people recover from this pandemic, and at the same time, create the right type of monetary policy to ensure that we see the right type of balanced growth going forward,” Camacho said.
An average 30-year home loan is now at 3%, a slight increase from mid-April, pointing to continued recovery of the economy from the pandemic recession. The rate for a 15-year home loan rose slightly to 2.29%.
Camacho foresees the supply chain and construction material prices stabilizing as the pandemic wraps up, slowing the surge in home prices.