The Tribune has a nice piece on changes in the inventory of Valley homes for sale.
In the first six months of 2007, 20,662 single-family home permits were issued, a 24 percent drop from the same period last year.
Good! Builders were still living in La La Land in the first 6 months of 2006.
Brown recently adjusted his five-year forecast downward, anticipating that new home building permits will not reach pre-boom levels of about 44,000 annually until 2011.
Does that mean the Brown thinks it will take 4 years for builders to work through their current over-supply problem! These home builders are not a very dynamic group. I imagine some will go out of business which will shorten that time period.
Despite the slump in sales, builders began ramping up production on speculative homes earlier this year, likely anticipating buyers returning to the market, said Ben Sage with research firm Metrostudy.
ARGHH!
That hasn’t happened.
Duh!
Still, roughly a dozen new builders have jumped into the market in the past year, said Sage, who heads up the Houston-based company’s Arizona division.
ARGHH!
” That’s the good news for Phoenix,” he said.
What’s good about it?
Sellers are competing with investors and builders, who are trying to off load homes, said real estate agent Jason Hall with RE/MAX Achievers in Chandler. Builders are getting cancellations, which adds to the housing inventory, Hall said. They can afford to cut prices by tens of thousands of dollars, while homeowners can’t, he said.
” They’re the ones with the deep pockets,” he said. For now, sellers need to keep lowering their prices, and if they can’t, they shouldn’t sell, Hall said. ” Pay the bill and keep making the drive,” he said.
Sad but true.
The last line of the graph is wacked, or at least I can’t figure it out.
Nevertheless, it appears that home builders are pulling several hundred more new home permits than new homes that have sold. When the permits are fewer than the sales, Arizona home builders will be headed in the right direction.
It’s stunning at this late date that Arizona home builders are still out of touch with reality.