Permits for Ariz. new-home construction hit a 14-year
low last month
Catherine Reagor
The Arizona Republic
Oct. 23, 2007 01:48 PM
Home
building permits across metropolitan Phoenix fell to a 14 1/2-year-low to 1,309
in September, according to RL Brown's latest Phoenix Housing Market Letter.
New home construction figures for the Valley haven't been this low since
February 1993, but the current slowdown is part of a much-needed market
correction. Most builders are slowing down and putting up fewer homes until
much of the speculatively-built inventory is sold, Brown said.
Fewer spec homes - houses built but not sold - mean fewer listings and a dent
in the glut of Valley homes for sale.
New home sales last month reached 2,991, more than double new home permits.
"Market stability will return as supply and demand rebalance," Brown
said.
Home permits have been falling over the past six months as new home sales have
held steady at higher levels.
Home prices will start to stabilize with a reduction in the number of sellers
with homes on the market competing for buyers.
Valley builders also are dropping prices in many subdivisions, which is helping new-home sales. Price decreases are replacing
hefty incentives on many new home models. Builders also are offering smaller
homes with fewer amenities, which brings down the
price and is enticing more buyers.