No Shortage Of Homes For Sale In Az

(Arizona, especially the city of Phoenix, grew extremely fast during the housing boom from about 2000 to 2005, and now they seem to be paying the price.)

The desert land was developed with rows and rows of new homes in a matter of months. People lined up in droves, waiting for their chance to get into a brand new home in some suburb of Phoenix; where they could get a huge new home for much less than it would cost in most other areas, especially in California.

But now, things have changed. Thousands of homes patiently sit on the market throughout Arizona, just waiting to be sold with very few buyers in sight.

Although Arizona is one of the states that have been hit the hardest by the stalling market, many believe things are just correcting themselves, and this once-hot market will heat up again in no time.

A November 7, 2006 article by Vikas Bajaj of The New York Times, “In Arizona, ‘For Sale’ is a sign of the times,” discusses the current housing trends throughout Arizona.

It seems as the heyday for housing is completely over in Arizona, and most notably in its biggest city, Phoenix.

Today, the number of unsold homes in the area has soared to almost 46,000 from just a few thousand in early 2005. And builders are pulling back as fast as they can. They have little choice. Sales cancellations among big builders, not just here but around the country, are running as high as 40 percent, double the rate a year ago.”

“Across the nation, new-home sales are down by more than 20 percent from their peak last year. Prices fell almost 10 percent in September from a year ago. And that reported drop does not take into account the extras that builders are throwing in free or at steep discounts to lure buyers, which means that effective prices are even lower.”

Last year alone, officials in Arizona issued 60,000 single-family permits throughout the metropolitan area, double the number they issued in 2000. “But in the first nine months of this year, permits fell by 27 percent from the same period last year. And builders are suddenly refusing to pay the asking prices for developable land.”

One of the things that has caused the market to slow down so much, is because there is such a surplus of homes on the market right now, with not nearly enough buyers.

“The influx of buyers from California, many of them individual speculators, was so strong that builders overestimated demand and constructed a lot more homes than there were people wanting to live in them, said John Burns, a real estate consultant in Irvine, Calif. He noted that investors bought roughly a third of homes sold in the Phoenix area last year, according to mortgage application data.”

But home builders are confident that the slowdown will only last a few more months and things will start to pick up again. After all, technology giant Google is supposed to be adding thousands of jobs in Phoenix, where all of these people will need to find a home.

But of course, amongst all of the optimists in Phoenix, there are those that are expecting the worst for the slow down.

But other experts are not as sanguine. They worry that the supply of homes overshot demand by far more than is commonly understood.

“‘By the time all the dust settles, will this be an 18-month correction or a 36-month correction?’ said Thomas Bruin, chief executive of Hearthstone, a firm based in San Rafael, Calif., that invests pension fund assets in land and residential real estate. ‘Nobody really knows.’”

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