New Home Construction Spending Down - Good for Phoenix Real Estate

According to the census bureau. , “The spending rate for residential (new homes ) construction projects dropped for the 25th consecutive month at the end of the first quarter and has fallen 34.4 percent from its peak in February 2006.

Now, those of you who know me and have read my posts in the past, know that I am eternally, (but not blindly) optimistic , not in a Wayne Dyer sort of way. However, there is a silver lining in most clouds and prefer to look for that …

ok, You read the headlines, sounds bad, right? but is it really ??

let’s look at this in 2 parts.

1) the economy - ok, construction spending is down, sharply, year over year, and construction spending is significant part of our economy ; in this sense todays numbers (above) are not great news for an already struggling (notice, I dont use that evil word ‘recession’) economy ,

2) Real Estate - the market we (or maybe its just me) all really care about. - In my humble opinion, and the opinion of most experts is that the #1 factor plaguing our ailing real estate market is excessive surplus in product or Inventory.

The news , shows at least that builders are putting out less product.

In Maricopa County, which includes Phoenix, Scottsdale, Fountain Hills, Glendale, Mesa, Chandler, Peoria, Tempe and Paradise Valley, ...

less product is significant in that it does not add to the problem. Less product , less supply , the more demand. Now, housing now has a strong fighting chance to resuscitate much sooner.

I dont know when, however, I do know we do'nt need more homes on the market. I think everyone who sees all those for sales signs in their neighborhood can attest to that!

 

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