Homebuilding improving in Arizona, slowly
An economic forecast is out for Arizona, and it looks hazy. According to experts at Arizona State University’s W.P. Carey School of Business, the state’s economy is getting better, but it is happening slower than expected.
Population, jobs, housing. They are all trending upward in Arizona, but at a sluggish pace. Construction of new houses has been a huge industry in the state for years and still is.
But Mike Orr, director of the Center for Real Estate Theory and Practice, said the building is being outpaced by population growth. Now, there are housing shortages, and Orr said that might partially be by design.
“I don’t think the priority for the homebuilders is to build as many homes as possible,” Orr explained. “It’s to be as profitable as possible, and they quite like home prices going up and keeping supply scarce is one of their current tactics.”
And it’s been working. Orr said housing prices in the Phoenix area are up 58 percent. That is a good thing for economy, even if it is a bad thing for homebuyers.
Overall, Orr is optimistic about the housing market. In the last year, Valley foreclosures went down 60 percent. Statewide, less than 5 percent of homes are now delinquent.