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Major Arizona housing boom is leaving buyers stunned by high asking prices

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Posted at 4:15 PM, May 11, 2021
and last updated 2021-05-17 15:14:51-04

PHOENIX — While sellers are thriving, buyers are beyond frustrated as Arizona homes are being sold for tens of thousands over asking price.

“It seems like houses sell immediately as they go on the market,” said Janna Stults. “I know some realtors are selling off-market homes, so they’re even selling before they hit the market, so it’s pretty crazy right now.”

Two years ago, the Stults family sold their Gilbert home to get closer to family in Washington State. She says they immediately missed their former community, friends, and schools.

The mother of two says they now plan to move back but are facing a major obstacle. “For the house that we sold, it’s probably gone up by about $200,000,” said Stults.

A dramatic spike in home prices caused by a lack of supply and extreme demand from a growing population is making it significantly more expensive for them to secure the same quality home they had before.

Bidding wars and extreme offers are forcing them to consider other alternatives. Stults says they’re now on a wait list to purchase a lot in the Eastmark Community in Mesa to build their next home.

“We’ve been on the list for about two months now and since that time, the price of the house has gone up by $75,000,” said Stults.

Folks looking to shelter themselves from the fierce home buying competition through new builds are now realizing it doesn’t offer any relief.

“With COVID-19, when a lot of the big factories were shut down and then materials were stopped, it really was something we didn’t see right away,” said Crystal Holtorf with Holtorf Homes.

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Builders are feeling it now in the cost of business. Prices for lumber are up 375% since this same time last year. Other materials like concrete, drywall and even appliances have shot up as well.

Delivery times for everything has been delayed due to the slowdown of manufacturing that peaked during the pandemic.

Data shows it’s all coupled with a historic decrease in supply across the Phoenix metro area.

Holtorf says builders are now limiting the number homes they're selling to help predict their cost and maintain deadlines.

Those on wait lists are dealing with monthly and evenly bi-weekly price increases until they can finally get under contract.

“There can be waiting lists of up to two hundred people,” said Holtorf.

Stults says they’re still looking at another two-month wait and fully expect another increase in pricing before they get a chance to lock in their purchase. An increase that could actually price them out completely.

“It may be that we just rent for a couple years just to see what happens long term with the housing market,” said Stults.