According to the University of Arizona’s Economic and Business Research Center, the Phoenix housing market will see a bit of a rebound this year. Don’t know if I agree completely, but I do like hope and good news. Here is what they have to say:
The UA Economic and Business Research Center report predicts that new-home permits in metro Phoenix this year will jump 54 percent from last year to 13,320. Then, permits will more than double to 28,060 next year.
That is still a long way from the Valley’s peak building years of 2004-05 when close to 60,000 new homes were built in each of two straight years.
The university’s forecast predicts that new-home permits will fluctuate from 35,000 to 40,000 annually from 2012-16.
That would appear to be a more sustainable number than 60,000 permits annually, especially with the Valley’s expected population growth.
Cassidy Turley/BRE Commercial, in its latest Phoenix Housing Market Report, notes the metro area will grow from 4.2 million this year to more than 5 million in 2015.
Longer term, Arizona is expected to grow to 16 million by 2050. That is up from 5.1 million in the 2000 census.
Cassidy Turley’s report also notes some strengths as well as concerns about the Valley market, including foreclosures, job losses and low appraisals of homes.
On the plus side is affordable housing. Six out of 10 homes sold in the fourth quarter of 2009 were affordable for families earning the Valley’s median income. That is much better than in California but less affordable than in other Sun Belt markets, such as Albuquerque, Dallas and Houston.
As you can see, they are basing their opinions on the new-build market. Many economists use new build permit data to evaluate the general housing market. My only concern is this approach is generally accurate in a normal market and somewhat untested in our current state of affairs. In addition, most of the new build permits are for lower priced homes and may not give a clear picture of the above $500,000 market, a sector still waiting for rebound and good news.
Anyway, we are liking the jump in new home permits and agree it points to a brighter future as it adds construction jobs back to the market and jobs are what we need most.
Gene Urban… your connection to real estate news and opinion