According to the RL Brown Real Estate report ...
"housing permits, the leading gauge of home construction was down more than 40% in July, compared with a year earlier."
Undoubtedly, this is unfortunate news for builders, who are large contributors to the Greater Phoenix economy.
However, this is some positive news for the real estate market.
- Resale homes on the market number 60,000 (give or take). Roughly, a year's supply.
- Foreclosures are rising.
- Bank owned homes (REO) and short sales are glutting the market.
Before any stabilization in housing or (dare I say) rebound in real estate will be followed by a sharp reduction in inventory.
The last thing the greater Phoenix real estate market needs is more homes.
I need to point out that there is an encouraging trend for builders. New home sales figures are slightly rising. First time homeowners and consumers are able to buy quality homes at even better pricing. This bodes well for builders who offer an important product to our economy.
They just need to sell their inventory first. Before they build new homes.
Then and only then will we see the stabilization and turnaround for which we have been waiting for 3 years.