This report on the Arizona construction industry is from June but it’s still valuable.
The reality of the extent of the downturn in the residential housing market has clearly set in with the Greater Phoenix Blue Chip Real Estate panel. The panel now expects a decline in single family permits of more than 43% to a level of about 17,600 permits in 2008. This is a decline of about 72% from the peak in 2005 making it one of the most severe housing cycles on record. To give some perspective to the 72% decline from the peak to the current expected level, the peak to trough decline in the 2001 recession was a very modest 4%. From the peak in 1986 to the trough in 1990, the decline was about 54% for single-family housing and from the peak in 1978 to the trough in 1981, the decline was about 63%. The early 1960’s downturn saw a decline of 74%.
The Blue Chip panel does expect a recovery next year, however, to approximately 22,300 housing units, a 26% increase. Even if that increase occurs, it would still make 2009 the weakest year (with the exception of 2008) since 1992.
Too bad negative numbers aren’t possible.