With the record home sales of 2005 long past, Valley builders aren’t sitting back, hoping for a return to the glory days.
They’re repricing homes, changing up what’s included in option packages, ramping up marketing and cutting staff.
Some 3,135 new homes were sold across the Valley in May, a slight uptick from the month before, the latest Phoenix Housing Market Letter by analyst RL Brown shows.
But that’s still a 26 percent dip from May of last year.
Year-over-year sales also are down.
The first five months of 2007 had 16,449 new home sales, compared with 20,522 in the same period last year.
Developers are battling the same basic problem they have been for months now: a huge oversupply of homes on the market, Brown said. Many potential new home buyers need to sell their old ones first and can’t, he said.
“We have too many homes on the market, and too many houses are overpriced for the market conditions,” he said.
Valleywide, there are currently more than 50,000 existing homes for sale.
Sellers haven’t gotten realistic and are asking for too much, Brown said. Creeping interest rates and tightening lending standards are affecting affordability.
Rising foreclosure rates also are a danger. Still, the Valley’s housing market is healthy by historical standards, he said.