From today's Arizona Republic:
Home building permits across metropolitan Phoenix fell to a 14 1/2-year-low to 1,309 in September, according to RL Brown's latest Phoenix Housing Market Letter.
New home construction figures for the Valley haven't been this low since February 1993, but the current slowdown is part of a much-needed market correction. Most builders are slowing down and putting up fewer homes until much of the speculatively-built inventory is sold, Brown said.
Fewer spec homes – houses built but not sold – mean fewer listings and a dent in the glut of Valley homes for sale.
Drive through Gilbert in the East Valley, particularly south of Elliot Road and east of Higley and you'll see tract after tract of homes under construction. Of course these homes are being built on permits issued months ago. Eventually the lower September permits will result in fewer homes being built, but don't expect changes overnight.
As of this moment, there are 47,713 single-family detached homes in the Arizona Regional Multiple Listing Service (ARMLS) — which roughly covers Maricopa and Pinal Counties. 43,389 of those are listed as built in 2006 or earlier.
Using the the trusty HP-12c calculator, that means there are 4,324 homes currently listed for sale that were built in 2007.
If you are interested, the total number of dwellings (single-family, condos, duplexes, mobiles, etc) currently listed in ARMLS is 57,773. It should be noted that the MLS we currently have, in all its glory, includes time shares in residential listings, so they are included in these numbers. Total closed sales from September 22 through October 22 was 3,280. That's a 17.6 month supply of homes.
Isn't it about past time for new home building to slow down?
[tags]Phoenix New Home Sales[/tags]
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I guess you have to ask though, how busy was it 14 years ago? 14 years ago could have been a pretty good year.
Over all, the US market seems to be going through a bad patch what with the foreclosures and hawks buying up foreclosed property. Is it the same everywhere?
As a fellow Realtor I am disappointed that you post such negative news. Your not helping any of us.
Congrats Anonymous, you get a whole post, not just a comment reply!
@ Dining Room set – Yes, unfortunately it is the same everywhere. There may be a couple of markets ( like Manhattan) that aren’t sharing the national real estate markets hardships but for the most part, from what I read, it’s the same in every market. Arizona is not the worst thankfully!
@ Anonymous – congrats on getting a post!
Jay thanks for the stats – it’s always good to know what’s going on.
Jay,
Although some may look at this as a negative, there is a big positive spin that can be brought to attention…
With the builder’s finally saying “we give up” and no longer continuing to pump out spec homes in order to produce a profit of some sort, it actually is a good thing!
The sooner the spec inventory begins to deminish, the sooner we can get back to a “normal” market.
Therefore, seeing that Phoenix new home builders are at a 14 year low should excite us in the realtor community. This article sends an obvious negative message to Joe Public, but as realtors, we should be able to educate our clients as to the positive message that the article portrays.
p.s. Love your site! I am checking out your posts and articles everyday. Thank you