Arizona job gains likely to continue
Arizona economists maintain that the slowdown will be mild, down to 4.9 percent in 2006 and 4 percent in 2007, according to a recent forecast released by the Department of Economic Security.
Analysts at Moody’s Economy.com expect the job-growth rate to slow to 4.5 percent in 2006 and drop to 2.5 percent in 2007.
For the Arizona housing market it’s a race between housing inventory and economic growth. As long as the economy stays strong, the housing market can work it’s way through the huge overhang of unsold homes.
If the economy tanks before the inventory gets into line, then we would enter an economic slowdown with an already high inventory of homes to begin with.
My ballpark guess is that the economy will be fine for the next 12 months at least. If the economy can stay strong for 2 years, the housing market should be able to work it’s way through the excess inventory of homes from 2006.
The key to reducing the inventory is putting families (owner occupants) into homes that are currently owned by investors… and for home builders to get their act together regarding their own inventory.