March 21, 2023

Residential Construction Pivots in 2023

While post-pandemic housing soared nationwide and throughout our local Scottsdale and Phoenix markets, those numbers weren’t sustainable explains Robert Dietz, Chief Economist for the National Association of Home Builders (NAHB). In a live webinar presented to builders, general contractors, remodeling companies, and industry professionals, he offered guidance on navigation into the new year and says he expects housing starts will drop into the double-digits before stabilizing in 2024.



Backing this were clear markers of a recession including decreased builder confidence, new permits, housing starts, and both new and existing home sales. The only missing marker, he states, was a rise in unemployment. But he expects that this is just around the corner.


During this webinar, attendees were asked whether or not they agreed that the nation had already fallen into a recession. A massive 82 percent of respondents said yes. Given this landscape, 32 percent of builders had already slowed or stopped spec home building and 28 percent had reduced the number of homes under construction. Additionally, 23 percent had reduced sales prices and 32 percent were offering a sales incentive for new home purchases. This mirrors the experience of general contractors in the local Scottsdale and Phoenix areas, as well.

But the notable drop in single-family home construction has not been consistent across all markets. Take Dallas/Ft. Worth and Houston, where combined new home construction is now 30 percent higher than it is in the entire state of California. And while new home completions have outpaced housing starts by 12,000 per month nationwide, multifamily construction has not been this high since 1974. Dietz expects home remodeling will rise as well.

These trends point to a busy year for kitchen remodeling companies, bathroom remodeling contractors, and whole home redesign companies throughout the state of Arizona. Homeowners looking to start a remodeling project in the Scottsdale or Phoenix regions might need to accelerate those plans to secure availability.

Is Residential Design Getting Practical?

Most often, trends in residential home design can feel like a fad. Spring is in; fall is out. Which many strapped-for-cash homeowners might find impractical. That’s why 2023 is ushering in a list of more sensible and useful upgrades. That’s not to say aesthetics are out. But interior designers, general contractors, and home remodelers throughout Phoenix and Scottsdale, Arizona are also starting to see more climate-, hybrid-work, and budget-friendly renovation choices.

  1. Climate-friendly. We know how hot summers can get in Arizona. That’s why many Scottsdale and Phoenix home owners are looking for ways to cut cost while also minimizing their carbon footprint by placing a priority on energy efficiency and longevity. This includes sustainable building materials meant to endure more the extreme weather we might be noticing in Arizona. Think fire-resistant modular homes made of steel in the west and structures designed to withstand hurricanes and flooding across the east coast. Beyond this, induction cooking is taking hold, quickly replacing home remodeling demands for natural gas. Scottsdale and Phoenix residences are installing EV charging stations, energy efficient windows and solar panels to further shrink energy use. And LEED zero-certified homes and communities are set to virtually eliminate the cost of energy. Not only does this help our environment but it can provide Arizona homeowners with a hedge against inflation.


  1. Hybrid-work-friendly. The rapid switch to remote work has left many local Arizona homeowners still grappling to see what works best. As we seek ways to blend the privacy of the office with household interaction, architects are beginning to incorporate glass-walled spaces into luxury and whole home remodeling projects. The goal: To minimize sounds as we zoom into our next meeting while still affording that warm connected feel after we log off.


  1. Budget-friendly. Arizona homeowners aren’t immune to the rise in inflation. But general contractors say it has taken its toll and is changing the way we design. As a result, we’re beginning to see more home remodelers opt for chic design that may not carry such a hefty price tag. This might entail reduced square footage or predesigned packages able to accomplish more with less. General contractors in Phoenix have also noticed a greater demand for multifamily homes.


Luxury home remodeling companies in Phoenix and Scottsdale, AZ can provide more tips for smart, practical innovations that can pay for themselves in the long run.

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