SE Valley Housing Market shows signs of improvement

SE Valley housing market shows signs of improvement
from the Arizona Republic, reports that Chandler, Mesa and the city of Maricopa had more single-family permits taken out for the first half of this year than they did during the same period in 2006, and prices in Maricopa have dropped into the $130,000's, which is likely to entice more buyers. "The market continues to be more challenging than anyone expected at this stage of the year," said housing analyst RL Brown. "I think the bottom line is that until the real estate market gets back to some balance between listings and sales, and confidence and liquidity are enhanced, we are not going to see much change in the new home market. We have got too many houses for sale. That's the bottom line." The number of new and existing homes for sale has been rising every month. In the Southeast Valley, it hit 19,214 in July according to the Arizona Regional Multiple Listing Service Inc. The average days on the market rose to 93 this July, compared to 63 last July. Brown said in the short term the housing market is going through an adjustment because consumers don't feel confident and lenders may be overreacting to the foreclosures stemming from the overheated market of 2004 and 2005. "Fundamentally there is nothing wrong with this housing market. Fundamentally this housing market is not much different than it was in the 2000, 2003 period and in those days we thought we were in heaven," he said. "If you look at it from a long perspective, the conclusion is, don't worry about it."

State taxes taking hit amid housing slump
from the Arizona Republic, reports that the downturn in the housing market is putting the brakes on state tax collections, meaning slower growth and perhaps spending cuts in state programs. A panel of economist on Wednesday made it clear that the effects of the housing crunch will be felt for several years to come, rippling through the state economy in the form of lower capital-gains tax collections and less disposable income. "Yes, the economy is slowing, significantly," said Tracy Clark of the W.P. Carey School of Business at ASU. "Are we going into recession?" Not unless the national economy does," he added. Economist Elliott Pollack said "the economy is no longer running on eight cylinders, It's more like three or four cylinders." But the point, he said, is the economy is still growing. He called the current fiscal year a "subprime" one.

Where the hottest job markets are
from the Phoenix Business Journal, reports that the country lost 2.2 million private sector jobs between June 2001 and June 2002, primarily due to the dot.com bust and the 911 terrorist attacks. But more than 6 million jobs have been created since June 2004. That's 6.4 percent above the trough in June 2002. Nowhere has the recovery been stronger than Phoenix, which is currently the nation's hottest employment market, according to a new Bizjournals study. "Phoenix has seen a real boom, and it has been broad based," said Austin Litvak with Moody's Economy.com. "The economy there really took off in 2004 and 2005, largely due to the housing market and the large number of people moving into the area." Phoenix expanded its employment base by 23.4 percent since 2002, almost quadrupling the national rate. It's five year influx of 325,100 private-sector jobs topped the nation, with Washington's gain of 245,400 a distant second. That torrid pace has slowed a bit lately, with 52,900 jobs added in a one-year period during 2006-2007, but that was still fourth best in the nation. "That being said, the growth is still above the national average, still impressive," said Litvak. "The housing market is going through a correction now, but when it stabilizes, we believe Phoenix will begin accelerating again," he added.

California’s renters, owners share similar cost burdens:
New Census data shows the Californian renters and homeowners with mortgages now had about the same relative housing cost burdens, another signal of the impact that soaring home prices had on family wallets …
In 2006, the typical California home with a mortgage spent 51.8% of their household income on monthly owners costs. That’s tops in the nation! Meanwhile, California renters (a typically poor group) were spending 51.9% of their income on rent and utilities (U.S.’s #2 behind Florida.)
Look back to ‘03, when a California mortgage user spent only 41.5% of income on monthly costs. Again, tops in the nation! Meanwhile, California renters were spending 48.3% of their income on rent and utilities (U.S.’s #3 behind Oregon, Florida.)