How to Compete With New Construction in Phoenix

By Kevin Langan

Kevin Langan is a trusted real estate advisor dedicated to elevating the level of professionalism in the industry through expert strategy, real guidance, and exceptional results.

If you’re thinking about buying or selling in the Phoenix area, there’s a strong chance new construction is going to factor into your decision. Buyers are weighing brand-new builds against resale homes, and sellers are trying to figure out how to stand out when there’s a shiny new community going up down the road. Both situations come down to strategy, so let me walk through what I’m seeing on each side of the deal.

Start with a real deal. Recently my partner Andrew and I worked with a buyer relocating from out of state. They’d been looking all over the Valley and came across a beautiful Toll Brothers model home, the last one being built out in the community. It was listed at $685,000, then dropped to $598,000, and that’s when our client reached out ready to write an offer. We put our best foot forward like we always do, offered $560,000, got countered at $580,000, and landed the deal at $575,000. That was for a fully furnished model home upgraded to the nines, and it even came with a pool, which most builders won’t include or won’t even consider building. Our client got every upgrade imaginable plus the pool, all well within their budget, and homes they’d looked at from lesser-quality builders in that same range didn’t come close.

Builders are motivated to sell. That deal is a window into the bigger picture for buyers right now. If you’re looking at new construction, there are real opportunities out there, because builders are motivated to move what they have. Depending on your preferences and the location you want to be in, you can often take an incentive in one of two ways: a cash discount on the price, or a financing incentive to buy down the interest rate. Many buyers in the Valley are strongly considering new construction because of that flexibility.

Now let’s flip the script. Say you already own a home, but there’s new construction going up in your area. What can you do to compete and stand out?

First, nail the basics on price. Anytime you’re selling, you need the basics dialed in. Everything neat, clean, bright, and open. From there, it comes down to being in line with your competition on price. If there’s a builder down the road, that’s going to be the absolute high watermark of pricing in your area, so you have to be mindful of what a buyer is actually willing to pay and what will feel attractive to them next to a brand-new option.

Second, lean on resale advantages. A resale home has real edges over new construction. If your home has a pool, that’s something a buyer doesn’t have to build, and as I mentioned, most builders won’t include one. In more established communities, the landscaping is more mature, things feel more settled, and the home has a more completed feel. Buyers also aren’t dealing with active construction and everything that comes with it. If your home is comparable in upgrades and amenities and was built within the last 10 years, you can be priced pretty close to new-construction properties. You just have to account for the fact that new construction is priced at the highest level in the market because everything is genuinely new, and builders are offering financing incentives on top of that.

Third, price strategically from day one. This is the piece that matters most. It all comes down to upgrades, amenities, and the strategy you use when entering the market to create the highest demand in the shortest time. More demand means more views, more showings, and more potential offers, and that’s what puts you as the seller in the driver’s seat on price and terms, instead of a buyer nickel-and-diming you down. If you start your asking price too high and slowly chase the market down, you end up on the wrong side of that dynamic. Choosing an asking price that triggers a market reaction is exactly what sellers competing with new construction need to get right, and it’s how you sell on real data rather than guesswork, selling quickly at or above your asking price.

That’s what I’ve been seeing in the market lately on both sides of the new construction question. If you’re thinking about buying or selling a home in the Valley, reach out to Andrew and me. We’d be happy to sit down with you, run through your options, and put together a game plan built for your situation. Give me a call or text at 480-327-8092, email me at info@langanteam.com, or visit kevinsellsaz.com. I’d love to help you make the right move.