Arizona Home Group

Source: Atlanta Agent Magazine | John Yellig

Builder confidence fell for the ninth month in a row in September, hitting its lowest level since May 2014, the National Association Home Builders reported, citing a continuing combination of increased interest rates, building-material supply chain disruptions and high home prices.  

The NAHB/Wells Fargo Housing Market Index (HMI) slid three points to 46. Any reading below 50 indicates that more builders view conditions as poor than good.  

“Builder sentiment has declined every month in 2022, and the housing recession shows no signs of abating as builders continue to grapple with elevated construction costs and an aggressive monetary policy from the Federal Reserve that helped pushed mortgage rates above 6% last week, the highest level since 2008,” said NAHB chief economist Robert Dietz said in a news release. “In this soft market, more than half of the builders in our survey reported using incentives to bolster sales, including mortgage rate buydowns, free amenities and price reductions.” 

The component measuring buyer traffic fell one point to 31. 

“Buyer traffic is weak in many markets as more consumers remain on the sidelines due to high mortgage rates and home prices that are putting a new home purchase out of financial reach for many households,” NAHB Chairman Jerry Konter said. “In another indicator of a weakening market, 24% of builders reported reducing home prices, up from 19% last month.” 

Current sales conditions dropped three points to 54, and sales expectations for the next six months dipped one point to 46.  

Regionally, the three-month moving average of the index fell in all geographic regions, led by the West, with a 10-point decline to 41 and followed by the South with a seven-point drop to 56, and the Northeast and Midwest, with five-point declines to 52 and 44, respectively.  

The NAHB/Wells Fargo survey measures builder perceptions of current single-family home sales, as well as sales expectations for the next six months, as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” The results are then used to calculate the seasonally adjusted index.  

Source: Phoenix Business Journal | Jeff Gifford

The Phoenix metro housing market is seeing some of the nation’s highest number of homebuyers backing out of deals, along with one of the biggest declines in bidding wars, according to research from real estate platform Redfin (Nasdaq: RDFN).

The findings come in two different reports from Redfin revealing more evidence of the cooling housing market amid rising interest rates and high inflation.

In one analysis of MLS data released Sept. 26, Redfin found that 21.6% of buyers in the Phoenix-area market called off deals in August, which was the sixth-highest rate out of the top 50 U.S. markets.

Phoenix wasn’t alone among Sun Belt cities, which claimed the top 15 spots on the list, with the top 10 all seeing rates higher than 20%. The national average of buyers backing out of contracts was 15.5%, which is roughly the rate seen over the past three months, Redfin said. A year ago, the rate was at 12.1% nationally.

“House hunters today are taking their time and exploring their options, whereas six months ago, they had to act quickly and pull out every stop to compete because homes were selling almost immediately,” said Tzahi Arbeli, a Redfin real estate agent in Las Vegas, in Redfin’s report. “Homebuyers now will agree to buy a house and be doing the inspection, and then back out because they found another home they love more.”

The analysis said buyers these days may have more flexibility to back out because as the market slows they don’t have to waive contract contingencies in order to compete with other buyers, as they did last year.

That hearkens to the findings in Redfin’s other recent report, which showed a slowdown in competition among buyers in Phoenix and across the nation.

In the Valley, 26.4% of homebuyer offers written by Redfin agents faced competition, which was just a slight dip from July’s 26.9% rate but was less than half the 57.9% rate from a year earlier.

Bidding wars have been declining nationwide for seven straight months, Redfin said, following general trends of the cooling market. Nationwide in August, 44.6% of home offers written by Redfin agents faced competition, which was down from 63.5% a year earlier.

Looking at reasons

In both reports, Redfin pointed to surging mortgage rates, finding that the average 30-year-fixed mortgage rate was at 6.29% a week ago, the highest level since 2008. That means buyers are facing monthly mortgage payments that are 45% higher than a year ago, Redfin said.

In the bidding war report, Redfin also pointed to persistent inflation and a slumping stock market affecting buyers’ choices.

“And some prospective buyers have decided not to purchase a home because they’re worried home values will fall,” that report said.

When it comes to the rate of buyers quitting deals, Phoenix was surpassed only by Las Vegas (23%), Atlanta (22.6%), Orlando (21.9%) and Fort Lauderdale (21.7%).

As for diminished bidding wars, only San Antonio, at 21.7%, Tampa (23.8%) and Olympia, Wash. (24.2%) had lower rates of competition than Phoenix in Redfin’s August survey.

Source: Phoenix Business Journal | Jeff Gifford

Work on the first phase of a major $446 million improvement project along Interstate 17 north of Phoenix is now underway, and drivers will soon start to see changes along the freeway — the primary link between the Valley and northern Arizona communities.

The Arizona Department of Transportation said this week that the work zone is being established along the 23-mile corridor between Anthem way and Sunset Point to the north. The project, which will continue for about three years, includes 15 miles of widening from Anthem Way to Black Canyon City and the addition of about eight miles of flex lanes from Black Canyon City to Sunset Point.

The thoroughfare has been subject to increasing congestion over the years as more drivers travel between central Arizona and northern communities such as Prescott, Sedona and Flagstaff. The stretch of highway being improved can sometimes see more than 50,000 drivers a day, ADOT has said.

“I want all drivers to be aware that ADOT is adding lanes to improve safety and reduce driver frustration by relieving the congestion the current configuration causes,” said ADOT Director John Halikowski in a statement. “Although there will be additional lanes, it is up to drivers to behave responsibly, operate their vehicles according to the law and, above all, be patient and courteous with each other. Let's get everyone safely home.”

Most construction on weeknights

Some construction will happen during daytime hours, officials said, but lane closures will only happen during off-peak travel times, either northbound or southbound, depending on the day of the week, ADOT said. Also, most of the lane closures will be on weeknights from 7 p.m. to 6 a.m., with none scheduled on weekends and holidays, when the freeway is most heavily traveled.

Existing travel lanes will be shifted to accommodate the construction zone.

The initial work includes guardrail repairs, equipment mobilization and work zone preparations inside and outside existing lanes. Preparations are expected to take about six weeks and will also include such things as wildlife surveys, spraying for noxious and invasive weeks, clearing vegetation and salvaging viable native plants, cacti and trees, ADOT said.

Contract negotiations on the project started in September 2021, and in October of that year ADOT signed a $446 million deal with a joint venture — made up of Phoenix-based Kiewit Infrastructure West Co. and Prescott-based Fann Contracting Inc. — to do the work on the I-17 project.

Gov. Doug Ducey earlier in 2021 had set aside $40 million in funding for the project, citing surplus revenue as a result of the state’s strong economic recovery and federal Covid-19 relief funds.

Federal, state money in the mix

Additional funding sources for the project include $130 million of state highway funds appropriated by the Legislature in 2019, $90 million from an Infrastructure for Rebuilding America grant, $50 million from the Maricopa Association of Governments for the Maricopa County portion of the project, and $52.3 million from federal aid with matching state highway funds.

In the end, the work is expected to reduce slowdowns and backups that can occur when traffic is heavy or when accidents can block the road and there are no alternative routes nearby.

The flex lane system, which will be built next to the southbound lanes through a steep and winding section of freeway, will be separated from regular lanes by a barrier and will be controlled by gates that allow use for one direction of traffic at a time depending on greatest need. On Fridays, for instance, northbound lanes tend to be heaviest, and on Sundays the pattern reverses with southbound traffic tending to dominate.

The flex lanes will also be open for blocked traffic when regular lanes are blocked by accidents or other incidents, ADOT said. Flex lanes will be in use seven days a week, and overhead message signs will alert drivers about which direction is in use at a given time, ADOT said.

“The I-17 Improvement Project is an important investment in Arizona’s transportation infrastructure," Ducey said in a statement. “All who travel I-17 regularly for weekend trips and daily commutes will benefit, including commercial truckers who use this Key Commerce Corridor to haul goods and services throughout our state. This project is critical for Arizona drivers and our state’s economy.”

Source: Phoenix Business Journal | Dale Brown

Surveyed list assembled with the help of residential real estate brokerages. Information points include 2021 total dollar volume ($50M minimum), number of transaction sides, most expensive home sold, team leader, team website and email.

RANK	TEAM / 2021 RANK WEBSITE	ADDRESS PHONE		# OF TRANSACTION SIDES	MOST EXPENSIVE HOME SOLD IN 2021	# OF LICENSED AGENTS ON TEAM	TEAM LEADER(S) TEAM E-MAIL
								1	JASON MITCHELL GROUP – JASON MITCHELL REAL ESTATE1 mitchellgroupaz.com	3080 Civic Center Plaza, #100 Scottsdale, AZ 85251 480-522-1030		4,981	$6.2 million	405	Jason Mitchell missioncontrol@jasonmitchellgroup.com
2	TERESA HAGUE TEAM – 72SOLD/HAGUE PARTNERS3 72sold.com	7333 E. Doubletree Ranch Rd., #100 Scottsdale, AZ 85258 480-998-9900		4,034	$5.6 million	355	Teresa Hague teresa@haguepartners.com
3	SILVERLEAF GROUP – SILVERLEAF REALTY5 silverleaf.com/silverleaf	18801 N. Thompson Peak Rd., #100 Scottsdale, AZ 85255 480-571-3977		289	$21 million	23	Mike Sweeney info@silverleafrealty.com
4	THE LAUGHTON TEAM – MY HOME GROUP2 laughtonteam.com	8631 W. Union Hills Dr., #201 Peoria, AZ 85382 623-256-6510		2,149	$10 million	153	George Laughton george@laughtonteam.com
5	SIBBACH TEAM - EXP REALTY6 sibbach.com	14301 N. 87th St., #215 Scottsdale, AZ 85260 480-500-1738		747	$3.54 million	75	Jeff Sibbach info@sibbach.com
6	THE KYPREOS TEAM – HOMESMART29 homesmart.com	10601 N. Hayden Rd., #I-100 Scottsdale, AZ 85260 702-234-7736		902	$615,000	2	Cheryl Kypreos ckypreos@hsmove.com
7	KP ELITE REAL ESTATE TEAM - EXP REALTY thekpelite.com	2301 S. Stearman Dr. Chandler, AZ 85286 480-487-4878		748	$1.45 million	75	Peter Kamboukos; Keith Anderson offers@kpeliteaz.com
8	PRIVATE CLIENT GROUP - RUSS LYON SOTHEBY'S INTERNATIONAL REALTY11 privateclientgroupagents.com	6900 E. Camelback Rd., #110 Scottsdale, AZ 85251 844-724-8080		227	$9.5 million	13	Frank Aazami frank@pcgagents.com
9	LUXURY PROPERTY GROUP - RUSS LYON SOTHEBY'S INTERNATIONAL REALTY14 lpg-3.com	7669 E. Pinnacle Peak Rd., #110 Scottsdale, AZ 85255 480-585-7070		130	$7.14 million	4	Will Foote; Deborah Negrin; Jay Pennypacker lpg@russlyon.com
10	THE JOFFE GROUP – LAUNCH REAL ESTATE9 thejoffegroup.com	4167 N. Marshall Way Scottsdale, AZ 85251 602-989-8300		135	$14 million	5	Robert Joffe robert@thejoffegroup.com
11	POWER OF 4 - RUSS LYON SOTHEBY'S INTERNATIONAL REALTY13 desertmountainhomeexperts.com	37700 N. Desert Mountain Pkwy. Scottsdale, AZ 85262 602-708-7300		123	$10.5 million	4	Anne Morrissey; Kathleen Benoit; Karen Baldwin; Bee Francis powerof4@russlyon.com
12	THE SIXTO GROUP – REALTY ONE GROUP46 sixtosellshomes.com	7975 N. Hayden Rd., #A101 Scottsdale, AZ 85258 480-440-9409		558	$510,000	7	Sixto Aspeitia sixtosells@gmail.com
13	THE VALLEY SOLUTIONS REAL ESTATE TEAM – HOMESMART23 notyourtypicalteam.com	1839 S. Alma School Rd., #141 Mesa, AZ 85210 480-415-5930		476	$2.9 million	85	David Dion; Julie Tate dave@valleysolutionsteam.com
14	KLAUS TEAM - KELLER WILLIAMS INTEGRITY FIRST REALTY16 klausteam.com	2919 S. Ellsworth Rd., #133 Mesa, AZ 85212 480-354-7344		478	$2.5 million	14	Kenny Klaus kenny@klausteam.com
15	WGO GROUP – RUSS LYON SOTHEBY'S INTERNATIONAL REALTY theokeefegroup.com	37700 N. Desert Mountain Pkwy. Scottsdale, AZ 85262 480-488-5718		110	$9.5 million	4	Dan Wolski; Troy Gillenwater; John "Jack" O'Keefe info@theokeefegroup.com
16	THE CARIN NGUYEN REAL ESTATE NETWORK - REAL BROKER LLC21 azhomesold.com	4840 N. Litchfield Rd., #101 Litchfield Park, AZ 85340 602-832-7005		487	$2.2 million	22	Carin Nguyen; Son Nguyen sales@azhomesold.com
17	REVISTO REAL ESTATE GROUP - MY HOME GROUP18 soldbyrevisto.com	15282 W. Brookside Ln., #119 Surprise, AZ 85374 602-626-8050		542	n/a	n/a	Joshua Smith Joshua@revistorealestate.com
18	THE WALT DANLEY GROUP - WALT DANLEY CHRISTIE'S INTERNATIONAL REAL ESTATE7 waltdanley.com	6720 N. Scottsdale Rd., #140 Paradise Valley, AZ 85253 480-991-2050		76	$10 million	8	Walt Danley; Dub Dellis info@waltdanley.com
19	KEITH MISHKIN - CAMBRIDGE PROPERTIES15 cambridgeproperties.com	14602 N. Tatum Blvd. Phoenix, AZ 85032 602-493-5100		181	$5.35 million	9	Keith Mishkin keith@cambridgeproperties.com
20	RTT HOME GROUP - RE/MAX FINE PROPERTIES8 agentabove.com	21020 N. Pima Rd. Scottsdale, AZ 85255 602-762-7653		266	$2.73 million	n/a	David Tucker david@agentabove.com
21	LEGACY REAL ESTATE TEAM – MY HOME GROUP27 legacyrealestateteam.com	2425 S. Stearman Dr., #114 Chandler, AZ 85286 480-291-4478		444	n/a	n/a	Tyler Blair office@legacyrealestateteam.com
22	THE WILLIAMS TEAM - REALTY EXECUTIVES PHOENIX17 realtyexecutives.com	1929 N. Woodruff Mesa, AZ 85207 480-641-1800		230	$1.93 million	12	Eric Williams ericwilliams58@gmail.com
23	BTG REAL ESTATE – MY HOME GROUP22 btgrealestate.com	55 N. Arizona Pl., #104 Chandler, AZ 85225 480-788-1245		407	n/a	46	Brandon Tracy clientservices@btgrealestate.com
24	THE ENVISION TEAM - MY HOME GROUP26 greaterphoenixhomelistings.com	1343 E. University Dr. Tempe, AZ 85281 480-485-3555		372	n/a	54	Ben Arredondo ben@theenvisionteam.com
25	THE MATHESON TEAM - RE/MAX FINE PROPERTIES25 scottsdalerealestate.com	21020 N. Pima Rd. Scottsdale, AZ 85255 602-899-5583		140	$5.45 million	9	Don Matheson don@scottsdalerealestate.com
26	ACQUIRE SFR – MY HOME GROUP acquiresfr.com			338	$3.4 million	n/a	Tom Storey info@acquiresfr.com
27	PR PARTNERS - LAUNCH REAL ESTATE63 prpscottsdaleluxuryrealestate.com	8711 E. Pinnacle Peak Rd., #D-110 Scottsdale, AZ 85255 480-535-6648		112	$14.5 million	3	Julie Pelle info@prpartnersaz.com
28	PELLEGRINI & DEGEORGE PARTNERS – RUSS LYON SOTHEBY'S INTERNATIONAL REALTY28 85268.com	16872 E. Avenue of the Fountains, #103 Fountain Hills, AZ 85268 480-315-1575		127	$3.4 million	3	Susan Pellegrini; Karen DeGeorge info@85268.com
29	THE LUCKYS – RUSS LYON SOTHEBY'S INTERNATIONAL REALTY32 lisalucky.com	7669 E. Pinnacle Peak Rd., #110 Scottsdale, AZ 85255 480-585-7070		95	$4.1 million	5	Lisa Lucky lucky@russlyon.com
30	THE MOJO TEAM – REALTY ONE GROUP47 mojoscottsdale.com	7975 N. Hayden Rd., #A101 Scottsdale, AZ 85258 480-356-5657		124	$12 million	40	Morgan Hodges; Josh Hintzen team@mojoscottsdale.com
31	THE SERTICH GROUP - RUSS LYON SOTHEBY'S INTERNATIONAL REALTY53 scottsdaleluxurygroup.com	7669 E. Pinnacle Peak Rd., #110 Scottsdale, AZ 85255 480-447-7877		76	$3.25 million	5	Nancy Sertich nancy.sertich@russlyon.com
32	THE PANOZZO TEAM – HOMESMART36 thepanozzoteam.com	8388 E. Hartford Dr., #100 Scottsdale, AZ 85255 480-307-8326		213	$4.5 million	16	Kim Panozzo kim@thepanozzoteam.com
33	THE HAMBLEN TEAM - REALTY ONE GROUP35 hamblenteam.com	8514 W. Deer Valley Rd., #110 Peoria, AZ 85382 602-536-7718		304	$939,000	19	Adam Hamblen hamblenteam@gmail.com
34	THE MORRISON TEAM – RETSY39 morrisonteam.com	7316 E. 6th Ave. Scottsdale, AZ 85251 602-456-0065		148	$4.5 million	7	Chris Morrison chris@retsy.com
35	ROCO LUXURY HOMES – RETSY rocoluxuryhomes.com	7316 E. 6th Ave. Scottsdale, AZ 85251 602-652-2625		43	$10.1 million	3	Libby Cohen; Julie Rohr; Polly Wintergalen roco@retsy.com
36	BUDWIG TEAM – REALTY ONE GROUP42 budwigteam.com	7975 N. Hayden Rd., #A-101 Scottsdale, AZ 85258 480-256-8322		163	$4.65 million	13	Herb Budwig; Jonathan Budwig marketing@budwig.com
37	THE TEAM – RETSY19 theteam4resultsaz.com	7316 E. 6th Ave. Scottsdale, AZ 85251 602-598-1779		70	$6.65 million	6	Lara Broadrick; Rebecca Clayton; Shawna Warner theteam@retsy.com
38	GABEL PHILLIPS GROUP – RETSY37 gabelphillipsgroup.com	7316 E. 6th Ave. Scottsdale, AZ 85251 602-708-4050		98	$7.32 million	6	Babbi Gabel; Angela Phillips; Mary Grassl contact@gabelphillipsgroup.com
39	K&M MARKET INVESTMENTS – MY HOME GROUP homesalesdoneright.com	8360 E. Raintree Dr., #120 Scottsdale, AZ 85260 623-703-8001		268	n/a	n/a	Kristy Martinez kristymartinezaz@gmail.com
40	THE KAY-GRANT GROUP – MY HOME GROUP77 kay-grant.com	8111 E. Thomas Rd., #124 Scottsdale, AZ 85251 480-387-3990		205	n/a	18	Andrea Lilienfeld andrea@kay-grant.com
41	DARWIN WALL TEAM - REALTY ONE GROUP51 darwinwallteam.com	287 E. Frye Rd. Chandler, AZ 85225 480-726-2100		153	$5.96 million	14	Darwin Wall dwall@darwinwall.com
42	TEAM SANTISTEVAN - BERKSHIRE HATHAWAY HOMESERVICES ARIZONA PROPERTIES49 thesantistevangroup.com	15215 S. 48th St., #183 Phoenix, AZ 85044 480-933-7094		200	$3.49 million	12	Mary Jo Santistevan; Mike Santistevan maryjos@cox.net
43	THE CHANDLER OCOTILLO GROUP - BERKSHIRE HATHAWAY HOMESERVICES ARIZONA PROPERTIES30 integrityallstars.com	4981 S. Arizona Ave., #1 Chandler, AZ 85248 480-243-4242		216	$1.4 million	10	Rebecca Hildalgo Rains; James Rains team@integrityallstars.com
44	THE STUDEBAKER GROUP – NORTH&CO.54 thestudebakergroup.com	15551 N. Greenway Hayden Loop, #210 Scottsdale, AZ 85260 602-763-1138		129	$2.5 million	18	Allen Studebaker allen@ssgroupaz.com
45	RO LUXURY GROUP – NORTH&CO.12 roluxurygroup.com	5635 E. Thomas Rd. Phoenix, AZ 85018 602-380-8735		85	$4 million	9	Robin Orscheln robin@roluxurygroup.com
46	THE CICERO GROUP – WEST USA REALTY carloscicero.thecicerogroupaz.com	1850 E. Northrop Blvd., #170 Chandler, AZ 85286 480-695-3930		227	$1.82 million	41	Carlos Cicero carloscicero77@gmail.com
47	THE ELLENS TEAM – MY HOME GROUP50 premiumazhomes.com	8360 E. Raintree Dr. Scottsdale, AZ 85260 602-824-2196		195	$3.5 million	17	Torie Ellens dallas@theellensteam.com
48	MAX AND PATRICK – AMERICA ONE LUXURY REAL ESTATE65 maxandpatrick.com	6900 E. Camelback Rd., #860 Scottsdale, AZ 85251 480-907-9660		54	$5.01 million	2	Patrick Niederdrenk; Maximilian de Melo max@americaonerealestate.com
49	MONIQUE WALKER TEAM - RE/MAX EXCALIBUR REALTY moniquesells.com	8510 E. Shea Blvd., #100 Scottsdale, AZ 85260 602-413-8195		199	$1.8 million	7	Monique Walker monique@moniquesells.com
50	VAN PATTEN LUXURY GROUP – RUSS LYON SOTHEBY'S INTERNATIONAL REALTY vanpattenluxurygroup.com	20909 N. 90th Pl., #209 Scottsdale, AZ 85255 480-202-2413		21	$21.5 million	3	Barry Van Patten barry.vanpatten@russlyon.com
51	NATE MARTINEZ - RE/MAX PROFESSIONALS nateshomes.com	20249 N 67th Ave, #1 Glendale, AZ 85308 602-430-5226		150	$2.29 million	6	Nate Martinez natem@remax.net
52	JASON CRITTENDEN TEAM – REALTY ONE GROUP58 theagentthatcares.com	3530 S. Val Vista Dr., #114 Gilbert, AZ 85297 480-999-9209		186	$1.64 million	7	Jason Crittenden jasonc@theagentthatcares.com
53	ZABEL GROUP – REALTY ONE GROUP64 zabelrealestate.com	2950 N. Litchfield Rd. Goodyear, AZ 85395 623-203-0968		173	$4.33 million	7	Brian Zebel brian@zabelrealestate.com
54	CALZA COMPANY – MY HOME GROUP59 calzaco.com	6751 N. Sunset Blvd., #320 Glendale, AZ 85305 623-242-2900		244	n/a	9	Julie Calza rankup@calzaco.com
55	AGENT COLLECTIVE - REALTY ONE GROUP41 searchallarizonahouses.com	2141 E. Broadway Rd., #101 Tempe, AZ 85282 602-600-6500		177	$2.83 million	15	Geoff Adams geoff@agentcollective.com
56	MISTER ROGERS HOMES TEAM - WEST USA REALTY55 misterrogershomes.com	1640 S. Stapley Dr., #124 Mesa, AZ 85204 480-313-7031		339	$2.33 million	27	Shawn Rogers misterrogershomes@hotmail.com
57	THE CONDO MANIA TEAM – HOMESMART phoenixcondomania.com/index.php	10601 N. Hayden Rd., #I-100 Scottsdale, AZ 85260 623-986-4200		168	$4.47 million	14	Elizabeth Suto liz@scottsdalecondomania.com
58	COPPER 48 REAL ESTATE TEAM – MY HOME GROUP117 thecopper48.com	110 S. Priest Dr., #101 Tempe, AZ 85281 480-334-7062		190	n/a	3	Mike Mazzucco team@thecopper48.com
59	THE BONNIE BURKE TEAM – RE/MAX FINE PROPERTIES92 bonnieburke.com	21020 N. Pima Rd. Scottsdale, AZ 85255 480-720-8001		138	$5.6 million	6	Bonnie Burke bonnie@bonnieburke.com
60	THE RECON GROUP – WEST USA REALTY azrecongroup.com	2355 W. Utopia Rd. Phoenix, AZ 85027 602-718-3561		350	$1.6 million	37	Mike Weinstein; Ryan Gerdes mike@azrecongroup.com
61	THE JONNY WEST TEAM – KELLER WILLIAMS REALTY PHOENIX jonnywestre.com	3920 S. Rural Rd., #110 Tempe, AZ 85282 602-741-6394		136	$1.82 million	6	Eric Brossart eric@jonnywestrealestate.com
62	THE MARSHALL BROTHERS – RUSS LYON SOTHEBY'S INTERNATIONAL REALTY52 desertmountainhomesandlots.com	37700 N. Desert Mountain Pkwy. Scottsdale, AZ 85262 602-882-2112		40	$4.9 million	2	Kirk Marshall; Keith Marshall kirk.marshall@russlyon.com
63	BUSHONG, CHRISTIAN & ALMQUIST – RUSS LYON SOTHEBY'S INTERNATIONAL REALTY40 russlyon.com	6990 E. Camelback Rd., #110 Scottsdale, AZ 85251 480-287-5200		49	$5.25 million	3	Joe Bushong; Chad Christian; Grant Almquist joe.bushong@russlyon.com
64	THE DAVIS DRIVER GROUP – RE/MAX FINE PROPERTIES66 davisdriver.com	21020 N. Pima Rd., #100 Scottsdale, AZ 85255 602-399-0116		48	$4.85 million	6	Davis Driver; Ann Driver davis@davisdriver.com
65	AZ GOOD LIFE TEAM – REALTY ONE GROUP correahomes.com	3530 S. Val Vista Rd., #114 Gilbert, AZ 85297 480-227-4878		148	$1.74 million	9	Debbie Correa debbie@correahomes.com
66	CASHMAN PARTNERS - RUSS LYON SOTHEBY'S INTERNATIONAL REALTY114 cashmanpartners.com	7669 E. Pinnacle Peak Rd., #110 Scottsdale, AZ 85255 602-339-2680		54	$4.2 million	3	Sally Cashman; Kathleen Prokopow sally.cashman@russlyon.com
67	THE SZABO GROUP - RE/MAX FINE PROPERTIES scottsdalerealestateteam.com	21000 N. Pima Rd., #100 Scottsdale, AZ 85255 480-688-2020		79	$4.58 million	6	Joe Szabo joe@azluxuryhomes.com
68	LEADING LUXURY EXPERTS – KELLER WILLIAMS REALTY SONORAN LIVING leadingluxuryexperts.com	15905 S. 46th St., #160 Phoenix, AZ 85048 602-369-1085		74	$3 million	9	Bonny Holland bonnie@leadingluxuryexperts.com
69	THE KOLANDERS – RUSS LYON SOTHEBY'S INTERNATIONAL kolanders.com	37700 N. Desert Mountain Pkwy. Scottsdale, AZ 85262 480-980-4073		34	$5.35 million	2	James Kolander james.kolander@russlyon.com
70	THE CANIGLIA GROUP – NORTH&CO.62 thecanigliagroup.com	7878 N. 16th St. Phoenix, AZ 85020 602-903-7220		95	$2.2 million	5	Shelley Caniglia; Steve Caniglia steve@thecanigliagroup.com
71	YOUNG HOME TEAM – EXP REALTY178 homesinsunlakes.com	10325 E. Riggs Rd., #110 Sun Lakes, AZ 85248 480-802-3857		133	$1.05 million	6	Charlee Young; Terry Young younghometeam@gmail.com
72	THE RUSSELL SHAW GROUP - REALTY ONE GROUP48 nohasslelisting.com	11211 N. Tatum Blvd., #100 Phoenix, AZ 85028 602-957-7777		165	$2.3 million	6	Russell Shaw russell@nohasslelisting.com
73	SELVEY GROUP - RE/MAX EXCALIBUR REALTY arizonabuildersales.com	8510 Shea Blvd., #100 Scottsdale, AZ 85260 480-254-6444		175	$1.8 million	8	Dean Selvey dean@deanselvey.com
74	BARRAZA TEAM - MY HOME GROUP72 barrazateam.com	3233 W. Peoria Ave., #202 Phoenix, AZ 85029 602-441-3702		205	n/a	2	Daniel Barraza azrealtorteam@gmail.com
75	THE RIDDLE GROUP BROKERED BY EXP REALTY73 theriddlegroup.com	20860 N. Tatum Blvd., #300 Phoenix, AZ 85050 480-502-0505		117	$1.8 million	18	Kodi Riddle kodi@TheRiddleGroup.com
76	GILLETTE GROUP – LAUNCH REAL ESTATE104 gillettegroupaz.com	4167 N. Marshall Way Scottsdale, AZ 85251 480-518-6885		100	$3 million	7	Shannon Gillette shannon@gillette-group.com
77	THE GLIMCHER TEAM – LAUNCH REAL ESTATE90 theglimcherteam.com	4207 N. Scottsdale Rd. Scottsdale, AZ 85251 480-695-8196		117	$1.48 million	3	Jason Glimcher jason@theglimcherteam.com
78	TEAM LEHMAN AZ - REALTY ONE GROUP76 tlazre.com	3530 S. Val Vista Dr., #114 Gilbert, AZ 85297 480-351-0407		138	$714,068	7	Drew Lehman info@teamlehmanaz.com
79	THE STEADFAST TEAM – REALTY ONE GROUP82	3530 S. Val Vista Dr., #114 Gilbert, AZ 85297 602-725-0604		127	$2.5 million	9	Max DeWitt steadfast.realtyone@gmail.com
80	SMITH TEAM – RETSY296 smithphx.com	7316 E. 6th Ave. Scottsdale, AZ 85251 480-459-7111		48	$3.7 million	7	Alex Smith alex@smithphx.com
81	S4 REAL ESTATE GROUP – KELLER WILLIAMS REALTY SONORAN LIVING69 s4grouprealestate.com	7141 E. Main St. Scottsdale, AZ 85251 602-725-2609		143	$1.25 million	16	Jenny McCall; Kevin Craig kevin.craig@s4realestate.com
82	EXCLUSIVE AGENT TEAM – HOMESMART61 homesmart.com	9110 W. Vernon Ave. Phoenix, AZ 85037 623-986-4200		231	$584,900	9	John Tamayo johndt88@hotmail.com
83	WENDY WALKER FINE PROPERTIES – THE AGENCY ARIZONA38 wendywalkerfineproperties.com	7001 N. Scottsdale Rd., #1040 Scottsdale, AZ 85251 602-888-4162		51	$4.13 million	3	Wendy Walker wendy.walker@theagencyre.com
84	MYRIAD – MY HOME GROUP83 myriadaz.com	2600 N. Central Ave., #725 Phoenix, AZ 85004 480-648-9234		130	n/a	4	Daniel Brown info@myriadaz.com
85	THE BLIKRE TEAM – MY HOME GROUP myhomegroup.com	8360 E. Raintree Dr. Scottsdale, AZ 85260 602-300-4626		153	n/a	n/a	Jaime Blikre
86	YONKER GROUP – LAUNCH REAL ESTATE98 yonkergroup.com	2633 E. Indian School Rd., #240 Phoenix, AZ 85016 602-638-6813		51	$5.61 million	5	Dan Yonker info@yonkerconstructionaz.com
87	THE TEAM WITH MORE - RUSS LYON SOTHEBY'S INTERNATIONAL REALTY teamwithmore.com	7669 E. Pinnacle Peak Rd., #110 Scottsdale, AZ 85255 602-980-2243		31	$4.45 million	2	Tracey Gray; Kim Leinweber more@russlyon.com
88	THE ARIZONA HOME GROUP – KELLER WILLIAMS REALTY SONORAN LIVING57 arizonahomegroup.com	5301 N. Pima Rd., #130 Scottsdale, AZ 850250 602-571-3730		100	$1.75 million	12	John A. Sposato john@arizonahomegroup.com
89	THE PRUITT TEAM – WEST USA REALTY thepruittteam.com	16150 N. Arrowhead Fountain Center Dr., #100 Peoria, AZ 85382 602-942-1410		468	$3.6 million	10	David Pruitt info@thepruittteam.com
90	REEDS & VANDI – RUSS LYON SOTHEBY'S INTERNATIONAL REALTY87 reedsandvandi.com	37700 N. Desert Mountain Pkwy. Scottsdale, AZ 85262 480-760-1001		34	$4.9 million	3	Kathy Reed; Hugh Reed; Stacey Vandivert stacey.vandivert@russlyon.com
91	REZAMP – REALTY EXECUTIVES PHOENIX122 rezampwholesale.com	500 W. Chandler Blvd. Chandler, AZ 85225 480-704-4671		194	$2.12 million	6	Brandon Hunt brandonhunt@realtyexecutives.com
92	THE BEHIE TEAM – REALTY EXECUTIVES PHOENIX86 thebehieteam.com	16150 N. Arrowhead Fountains Center Dr. Peoria, AZ 85382 602-319-8868		44	$1.6 million	8	Lenny Behie lbehie82@gmail.com
93	HOUSED.COM REAL ESTATE GROUP – NORTH&CO. housed.com	25 S. Arizona Place, #325 Chandler, AZ 85225 602-581-7005		94	$1.75 million	7	Michael D'Elena hello@housed.com
94	REISDORF, METZ & PARTNERS - RUSS LYON SOTHEBY'S INTERNATIONAL REALTY70 reisdorfmetzpartners.com	7669 E. Pinnacle Peak Rd., #110 Scottsdale, AZ 85255 480-797-4977		51	$3.13 million	4	Kathy Reisdorf; Cindy Metz cindy.metz@russlyon..com
95	TEAM TLC REAL ESTATE PROFESSIONALS – REALTY ONE GROUP71 tlcrealestatepros.com	7975 N. Hayden Rd., #A-101 Scottsdale, AZ 85258 480-215-1105		92	$2 million	7	Tiffany Carlson-Richison tiffany@tiffanytherealtor.com
96	AGENTY CRE agentycre.com	2705 S. Alma School Rd. Chandler , AZ 85249 480-567-2121		45	$1.75 million	1	Shamile Botzman Shamile@agentycre.com
97	THE MACDONALD TEAM – RUSS LYON SOTHEBY'S INTERNATIONAL REALTY foreazhomes.com	7669 E. Pinnacle Peak Rd., #110 Scottsdale, AZ 85255 480-220-9724		30	$5.58 million	2	Allan MacDonald allan.macdonald@russlyon.com
98	BARKAN GROUP – LAUNCH REAL ESTATE barkangroups.com	4167 N. Marshall Way Scottsdale, AZ 85251 480-273-7138		74	$4.5 million	8	Elliot Barkan; Corinne Barkan
99	PHIL TIBI GROUP – NORTH&CO. philbitigroup.com	2 Biltmore Estates Phoenix, AZ 85018 602-692-0780		93	$2.15 million	13	Phil Biti phil@thebitigroup.com
100	R3HOMEGROUP r3homegroup.com	6170 W. Chandler Blvd., #14 Chandler, AZ 85226 520-265-6841		49	$1.2 million	17	Paul Eide; Joel Goldsmith; Jeff Cayton paul@phoenixhomerealtor.com
1Young Home Team accomplished its 2021 sales in association with Keller Williams Realty Sonoran Living,. which provided the sales figures. 2All Smith Team 2021 sales were accomplished while the team was working with the North&Co. brokerage, which supplied the information.

Source: Phoenix Agent Magazine | Patrick Regan

Homebuyers nationwide had more time to make decisions in August with the first year-over-year increase in median days on the market since June 2020.

Median days on the market increased by five days to 42 in August compared to the same month last year, according to the Realtor.com Monthly Housing Trends Report.

In the Phoenix area, median days on the market increased by eight to 38. The median listing price rose 5.3% year over year to $500,000. Active listings increased a staggering 177.4% and new listings dropped 6.4%.

Among the top 50 metro areas, Phoenix had the greatest share of listed homes with a price reduction, at 42.7%.

Nationally, the median listing price rose 14.3% to $435,000. That’s down from the record-high median pricing of $450,000 in June. Nationally, active listings increased 26.6% year over year and new listings were down 13.4%.

“These trends reflect a housing market that is getting a refresh from the past two-plus years of frenzied buyer demand that outmatched supply, with inventory rising and more typical seasonality expected to return in the fall,” the Realtor.com report said. “It’s a long road to balance, with homes still selling more quickly than prior to COVID. However, relative to the market’s recent peak, August’s milestone shift in time on market trends is a step toward offering buyers relief from the relentless rush for homes.”

Source: The Seattle Times | Heidi Groover

A tracking tool used on Zillow’s website violates the privacy rights of the tens of thousands of prospective homebuyers and sellers who use the site, a new lawsuit alleges.

The complaint filed Monday in federal court challenges Seattle-based Zillow’s use of session-replay code, a common technology that allows websites to record and replay users’ interactions with the site to learn how they use it. 

The technology amounts to the “electronic equivalent of ‘looking over the shoulder’ of each visitor to the Zillow website for the entire duration of their website interaction,” the complaint said. Many users are likely unaware the replay exists, according to the suit, which likens the practice to wiretapping. 

The suit alleges Zillow uses Microsoft’s session-replay technology known as Clarity and names both companies. 

Neither company commented on the substance of the allegations Tuesday. Microsoft spokesperson David Cuddy said the company was “looking into this closely.”

Zillow is “currently reviewing” the suit, spokesperson Will Lemke said. “Zillow takes the privacy and security of users’ information very seriously. We are transparent with our users through our privacy policy, which explains to users the types of information we collect as they use our apps and websites.”

The Seattle attorneys who filed the case did not respond to an interview request. 

The filing this week is one of a handful of similar cases across the country. Several cases in Pennsylvania challenged the software used by Zillow, Lowe’s and Expedia, Bloomberg Law reported. Another recent case in California named Old Navy. 

Last year, dozens of similar cases were filed with mixed results, according to Kristin Bryan, an attorney who works in Cleveland and New York and has represented companies defending against similar lawsuits. (Bryan declined to speak specifically about the latest case filed against Zillow and Microsoft.) 

“Privacy and cybersecurity [are] a top-of-mind issue right now,” Bryan said.

The Washington case, filed on behalf of two Zillow users from South Carolina and Pennsylvania, alleges the practice violates Washington wiretapping law and “constitutes an invasion of the privacy rights of website visitors.” 

State law prohibits intercepting or recording private communications without permission from the participants, except in certain emergency situations. 

According to the complaint, the session-replay code used on Zillow’s site can capture mouse movements, clicks, zooms and keystrokes, as well as information about properties users view, personal information users enter to schedule a tour and which pages they view.

“Website visitors reasonably expect that their interactions with a website should not be released to third parties unless explicitly stated,” the filing said.

Cases challenging session-replay code typically revolve around whether website users sufficiently consented to the replay technology in a website’s terms of use and whether state wiretapping laws should cover online activity like mouse clicks, Bryan said.

Frequent lawsuits challenging tracking technology can lead corporations to write broader terms of service to try to avoid being sued.

“Since last year, many commercial website operators have taken note of this rise in litigation activity,” Bryan said, “and have reexamined their practices and perhaps buttressed or supplemented their privacy policies accordingly.”

Source: Phoenix Business Journal | Angela Gonzales

Chapin Bell has nearly 2,000 apartment units under or starting construction totaling more than $600 million in development costs.

As these projects come to fruition, the CEO of Scottsdale-based P.B. Bell Cos. continues to scout for land.

"We believe in the strength of the Phoenix market," he said. "We have every expectation it will continue to grow."

Chapin's projects come at a time when the Phoenix market is undersupplied, but an active construction pipeline is moving it closer to equilibrium, said Peter O'Neil, research director for Northmarq.

O'Neil is tracking 28,000 units currently under construction.

"Deliveries in 2021 were about 13,600 units," he said. "This year we're expecting about 14,500 new units coming online."

P.B. Bell Cos. built this $49.5 million community in Mesa. Called The Landing at Fiesta Village, the 220-unit project at 1310 W. Southern Ave. is now leasing.

A new study commissioned by the National Multifamily Housing Council and the National Apartment Association found that the nation is facing a deficit of 600,000 apartments. The study found that the U.S. needs 4.3 million more apartments by 2035 to address demand as well as affordability.

O'Neil said the best way to track whether the Phoenix market is undersupplied is to look at the area vacancy rate.

"Historically, we've averaged about 6-7% in Phoenix," he said. "For the past two years, we've averaged 4.6%, reaching as low as 4% mid-to late last year. The rate ended the second quarter of this year at 5.4%."

While there's concern nationwide of some markets becoming oversupplied, metro Phoenix isn't at risk — at least in the near term, O'Neil said.

"We were undersupplied for a long time," he said. "From 2011 to 2013, we delivered an average of 2,500 units per year. Then we averaged about 7,700 units from 2014 to 2019."

What it means for investors

Khosro Khaloghli, founder of Irvine, California-based KB Development Co., has been busy buying and selling apartment communities in metro Phoenix.

In February, he paid $193.5 million for the 356-unit Roadrunner on McDowell, then turned around and sold the 288-unit Mountainside apartments for $132.5 million in March. He also had sold the 312-unit Arboretum at South Mountain for $118.25 million last December.

All of those deals were brokered by Cliff David and Steve Gebing, executive managing directors for Institutional Property Advisors, a division of Marcus & Millichap (NYSE: MMI).

Competition for apartments in Phoenix led to 170% sales volume growth and 98% growth in the total number of transactions in 2021, David said.

"As a result of competition, many California-based investors pushed eastward," he said. "The ensuing battle to secure much sought-after multifamily assets in prime submarkets broke sales price records throughout the Valley."

When Khaloghli came to the U.S. in 1964, he didn't speak English and only had $400 in his pocket.

A wrestling scholarship got him into Cal Poy Pomona, where he graduated with a bachelor's degree in urban planning and a master's in business and public administration, and later completed postgraduate studies with a Ph.D. in urban economics.

Enlarge

Khosro Khaloghli, founder of Irvine, California-based KB Development Co.

KB DEVELOPMENT CO.

With more than $1 billion invested in multifamily properties in Arizona, Khaloghli said he isn't stopping any time soon.

"I would love to invest more in Arizona," he said. "I love this place. I'm very optimistic things are going to work out."

Even so, Khaloghli said he's concerned about the rising rental rates.

As rental rates are increased, he said it's important to make sure that landlords don't hurt the tenants in the process.

Rents for a one-bedroom apartment in June were up 17.5% in metro Phoenix compared with this time last year, according to the latest National Rent Report by Zumper.

Phoenix ranked as the 41st most expensive rental market in the nation in June with the median price of a one-bedroom apartment landing at $1,340 and a two-bedroom at $1,680, according to Zumper.

The apartments P.B. Bell Cos. has been building in the Valley range between $1,500 and $2,400 in monthly rents, depending on the number of units and location of the property.

Bell said he's been selling his properties once they stabilize.

"We generally sell more than we hold onto," he said. "A lot of that depends on the market. Pricing today for apartments is pretty aggressive. There is a lot of interest for investment in the Phoenix metro area. It's still a seller's market."

Source: Phoenix Business Journal | Angela Gonzales

Taylor Morrison Home Corp. (NYSE: TMHC) plans to build 1,250 homes in north Phoenix near the Taiwan Semiconductor Manufacturing Co.'s $12 billion chip plant under construction.

The Scottsdale-based homebuilder is in escrow to buy 473 acres near Cave Creek Road and Sonoran Desert Drive in north Phoenix, which is about two miles from the TSMC site, said Brad Schoenberg, division president for Taylor Morrison.

He said he expects to close on the deal during the fourth quarter of 2022 or first quarter of 2023. The seller is MacEwan Ranch LLC.

Nate Nathan and David Mullard of Nathan & Associates Inc. are representing Taylor Morrison in the deal, which has been in escrow for the past two years as Taylor Morrison works its way through the zoning process with the city of Phoenix.

Schoenberg said the project was finally rezoned in July, but it still needs to go through design review with the city.

The master-planned community will be called Verdin, where homes will range between 1,700 and 4,000 square feet, he said.

Enlarge

Surrounded by the Phoenix Sonoran Preserve and state land, this 473-acre parcel is in escrow for future home sites.

TAYLOR MORRISON

Verdin will only feature for-sale homes, and not a build-to-rent community like those being built in partnership with Mesa-based Christopher Todd Communities in the Valley and throughout the nation.

"As we wind down the year, we'll have invested $160 million in land acquisitions," he said, representing about 2,800 lots in various stages of development.

These land holdings give Schoenberg time to pause on future land buys as the housing market continues to cool amid a lack of consumer confidence.

"We're in a very good place with land holdings," he said. "We have time to see what's going to happen in this market. We're positioned well in Maricopa County. We like our core land holdings."

Even so, he said, he won't turn away a good deal.

"If something comes our way, we will be an opportunistic buyer," Schoenberg said. "We will be very picky and choosy where we go."

Source: Phoenix Business Journal | Angela Gonzales

Valley home prices dropped in July, leaving many homebuyers wondering if a buyer's market is imminent, even in the midst of higher mortgage interest rates.

The monthly average home sales price in July dropped 9.6% compared to the previous month, from $602,586 to $546,403, according to The Cromford Report. The median sale price in July fell 4.8%, from $475,000 to $452,000.

Enlarge

Home prices took a dive in July, according to The Cromford Report.

THE CROMFORD REPORT

Greg Hague, president of Scottsdale-based 72Sold, blames the Federal Reserve's aggressive interest rate increases on the unexpectedly large drop in July home prices.

"Interest rates have almost doubled, making homes significantly less affordable to buyers who need financing, which is most buyers," Hague said.

"It's a shame that in its effort to ameliorate overall inflation in the economy, the Federal Reserve's interest rate increases impacted the housing market so severely," he said. "They should have seen it coming because interest rate fluctuations have a greater impact on the housing market than any other segment of the economy."

More houses on the market

Pointing to The Cromford Report, the Valley has 12,656 single-family homes available on the market, said Keith Burton, Realtor with The Rider Elite Team in Scottsdale.

Mortgage interest rates are sitting below 5%, while inventory levels of both existing and new homes are rising, creating a more balanced market, said Steven Hensley, advisory manager for Zonda housing research firm.

While buyers have more options and are gaining more bargaining power, it's still a seller's market today, Hensley said.

"That could continue to change in the coming months if inventory keeps rising," he said.

Despite lower sales prices, sellers generally have much more equity than they did just a few years ago, Hensley said.

It's also still a seller's market in the luxury sector, said Frank Aazami of Russ Lyon Sotheby's International Realty.

"Sellers control the transaction," he said. "They can — and have — declined to entertain great offers. In adjusting declining markets, if sellers pass on entertaining fair offers, they'll end up selling/netting less. Those who are carrying a huge cost can hurt their net sheet. That's how short sales became so popular — they held on too long."

But the luxury market is a bit different, where buyers are much more savvy, Aazami said.

"They like and will pay for the trendiest and best-in-design homes," he said. "You can name your price when it's extraordinary and refined."

Source: Phoenix Business Journal | Ashley Fahey

Homebuilders across the U.S. are shifting their strategies and financial outlooks amid changing consumer demand for housing.

But where the jury is still out is whether the trend toward elevated canceled contracts, more incentives and lower demand for housing is settling out to pre-pandemic levels — when demand for homes was still higher than historic norms — or will continue to worsen.

The nation's publicly traded homebuilders, in earnings calls reporting their most recent quarter's financial performance, are seeing similar trends and patterns across their portfolios as the housing market shifts amid higher interest rates and fears of a recession. The three-month period that ended in June is the first full quarter that illustrates how the housing market is changing for builders, coming off pandemic highs.

The effects are being felt across the country, although some places are feeling it more dramatically than others. Pricey West Coast markets and metro areas that've far outpaced national norms during the pandemic are seeing the sharpest corrections.

In Phoenix, one of nation's hottest pandemic housing markets, the contract cancellation rate through mid-July was in the 30% range. That's up from 8% to 10% in 2020 and 2021, and up from 15% in 2018 and 2019.

Rick Beckwitt, co-CEO and co-president of Miami-based Lennar Corp. (NYSE: LEN), said during a call with investors in late June its Florida markets were among the better performing in the country through that month. Beckwitt identified seven markets where Lennar has had to lower prices and offer more attractive financing options: Raleigh, North Carolina; Austin, Texas; Minnesota; Seattle; and Los Angeles, Sacramento and the Central Valley in California.

Uptick in canceled contracts, incentives

Most homebuilder executives point to June as the first month where an observable slowdown occurred in the broader housing market.

Nationally, about 60,000 of home-purchase agreements fell through in June, or 14.9% of homes that went under contract that month, according to Seattle-based Redfin Corp. (Nasdaq: RDFN). In June 2021, that share was 11.2%.

Arlington, Texas-based D.R. Horton Inc. (NYSE: DHI), the nation's largest builder, said its cancellation rate in its third quarter ending June 30 hit 24%, compared to 17% the same quarter a year prior. The builder's net sales orders in Q3 decreased 7%, to 16,693 homes, and its total net sales order value increased 8% from the prior year, to $6.9 billion.

Atlanta-based PulteGroup Inc. (NYSE: PHM) saw 1,152 contracts canceled in the second quarter, a rate of 15%, up from 665 cancellations at the same time last year, or a rate of 7%. Net new orders in Q2 declined 23% on an annual basis, to 6,418 homes, and total net sales order volume was $3.9 billion, a decrease of 8% from the same period last year.

Mike Murray, D.R. Horton executive vice president and co-chief operating officer, said during the builder's July 21 earnings call the company has been able to resell cancellations, but that typically takes from four to 12 weeks because of the mortgage process.

Bill Wheat, D.R. Horton executive vice president and chief financial officer, said the cancellation rate in the builder's Q3 was closer to what the company considers normal, as compared to below-normal ranges through much of the pandemic.

Builder executives say much of what they saw from buyers between early April and late June was a direct response to the Federal Reserve's more aggressive interest-rate hike at its May meeting. A more dramatic escalation in mortgage rates occurred around that time.

But even after the Fed's most recent hike in late July, three-quarters of a percent, many housing economists are predicting mortgage rates will start to stabilize. That could give buyers a greater degree of predictability — although affordability will still be tough for many.

"After a two-year boom market unlike any other in history, the new-home market is at a crossroads," said Eric Lipar, chairman and CEO of The Woodlands, Texas-based LGI Homes Inc., during the company's earnings call Tuesday. "From a short-term perspective, homes are more expensive, consumer prices are up and (the) move (to) curb inflation nearly doubled mortgage rates."

Lipar and others pointed to broader underpinnings — including a strong labor market, demographic trends and tight rental supply — as reasons to remain confident in the new-home market.

Still, as buyers adjust to the new elevated interest-rate environment, builders are upping incentives to keep momentum going.

That includes mechanisms such as mortgage interest rate locks and buydowns to buyers, such as what D.R. Horton has been offering. That builder, which focuses much of its business on the price-conscious first-time buyer, is also beginning to offer other sales incentives as necessary on selected homes and inventory, Wheat said.

"As we adjust to current market conditions, we expect the pace of our sales price increases to slow during the fourth quarter and for our incentive levels to increase from historical lows," he added.

Ryan Marshall, president and CEO of Pulte, said during the builder's July 26 earnings call the majority of incentives in the builder's second quarter took the form of longer-term rate locks or rate buydowns. He said many buyers can still afford the price of a new home but some need a little help.

It seems likely, though, incentives will be in play for the foreseeable future, which will certainly factor into home-price growth and a builder's profit margin.

"Depending upon the community, home-price appreciation has slowed, stopped or, through the use of incentives, is taking a couple of steps back," Marshall said. "Through much of the second quarter, incentives were mostly tied to the mortgage, but this is now expanding to include discounts on options and lot premiums.”

Shifts in strategy, spending

In response to slowing buyer demand, and continued elevated costs, builders are assessing how to manage their pipelines in the coming months as the U.S. economic outlook hangs in limbo.

Greater advertising and marketing spending is one tactic being employed by a couple of builders despite a move toward cost-cutting. Lipar said LGI has increased its advertising spending with favorable results. In July, nearly 20,000 people inquired about moving from renting to homeownership, a 54% increase over last year, he added.

"Now's the time to spend more money on marketing," he said.

Pulte executives say they are looking to increase the company's share of speculative homes, an industry term used to describe a move-in-ready home built on speculation that it'll sell easily for a profit. The company will continue to primarily be a build-to-order builder, Marshall said, but changes in market conditions have it pushing its share of spec homes to 30% or higher.

"We'll be starting specs across the spectrum," said Bob O’Shaughnessy, executive vice president and chief financial officer at Pulte, during the builder's earnings call.

D.R. Horton has made headlines for growing its build-to-rent business, a hot segment of the rental market many for-sale builders have waded into in the past couple of years. D.R. Horton in February was projecting to grow its rental operation this fiscal year by $1 billion.

When asked by an analyst whether some of D.R. Horton's land positions could be converted from for-sale to rental housing because of changing conditions, Murray said demand is evaluated in making those kinds of decisions.

"We always thought build-to-rent is a great way to more rapidly monetize land positions without cannibalizing (our) for-sale business because it's a different user of that real estate and different owner of the real estate," he continued. "We certainly have repurposed projects that we originally may have identified three to four years ago (as) for-sale. Today, they're being executed as for-rent, and that process continues."