Misty takes a “stabilize” angle on this story on the Phoenix area new home market but the graphic (click on “GRAPHIC…”) shows some of the real problems with the Arizona new home industry.

Look at the “Year-to-date” line. It shows Valley home builders took at way to many permits in 2006, when the market at peaked in 2005, leading to the current oversupply. Even in 2007 their permits are not much lower than new home sales so they won’t be making real cuts into their inventory of new homes for sale.

It’s good that they only pulled 1,309 building permits in September but how slow are these homebuilders that it takes them over 2 years to start to lower permits significantly?