Our View: Havasu housing market shows as value proposition
When does a housing market become too hot?
Based on recent history, we’d say it’s when the supply declines to a point that values rise dramatically in a short time. That’s when the housing bubble is filled with not much more than hot air and promises, as it did a decade ago. When it burst, it send the national economy spiraling downward.
The good news: Lake Havasu City and the rest of the nation aren’t close to a bubble. Even in super-hot California markets, lending controls are keeping home prices somewhat in check.
Yet it’s a new age and a new dynamic in the construction industry. Home prices are rising in Lake Havasu City but are doing so in a sustainable way based upon some industry predictions about the future.
In other words, how can higher home prices be justified? Try this:
• Labor shortages and the scarcity of skilled trades workers. This situation is worsening, with may predicting that construction will become one of the highest-paid industries. It’s tied to a very large population of Baby Boomers who are now retiring. Prices reflect the costs required to build them, and that figure will rise.
• Materials costs are rising. Tariffs are making the costs of certain materials even more volatile. Anecdotes abound of wholesalers raising prices many times over because of real or fabricated shortages. Even before President Trump imposed new tariffs, materials were getting expensive due to inflation and shortages caused by massive rebuilding in hurricane-stricken areas.
• Delays are increasingly common for the above-mentioned reasons but also because professional firms serving construction grew much leaner during the recession. The construction boom has meant a backlog.
An article in last week’s Today’s News-Herald laid out the tightening housing market in Lake Havasu City along with describing several developments that will bring hundreds of new homes to purchase.
Most of those homes will be built in the coming years and even more subject to the material and labor issues affecting the industry.
The quick sale of many newly listed homes indicate that many buyers would rather do so now rather than wait for much higher priced homes in the future.
Even homes that sell for tens of thousands of dollars more than a few years ago are still a value proposition.
— Today’s News-Herald