In 2004 and 2005, Arizona home builders built an extra half year supply of homes and now 3 years later they still haven’t worked their way through it.
It’s not economically rational.
The only explanation I can come up with is, “Builders build.”
Builders seem to think that builders who aren’t building aren’t real men so they just keep building until they run out of money.
I guess this article means D.R. Horton and Pulte still have money.
Though the numbers represent a significant decline in housing starts from previous years, the additional inventory may contribute to more instability in the local housing market, which also is being affected by job losses and overall declines in the country’s economy, the report indicates.
“Builders still have inventory problems,” said Ben Sage, director of Metrostudy’s Arizona division, in a news release. “The relative supply of finished vacant homes, measured in months, is elevated. As of June 2008, there was a three-months supply of finished vacant homes, which is well above the equilibrium level of 1.5 to 2 months for Phoenix.”