Consensus on flat prices and longer recovery

The Arizona Republic reports that Arizona's lagging housing market likely won't recover until next year and will continue to hinder job growth until it rebounds. "Most buyers, I think, now realize that housing prices are not declining, they've simply leveled off," said Marshall Vest, director of the Economic and Business Research Center at the University of Arizona's Eller College of Management. "Houses are still selling, they've just come off of those peaks that were driven by the mania that ripped the market there for a while," added Vest, who gave his midyear economic report on Wednesday to business leaders in Tucson. Vest's comments were underscored by Dennis Hoffman, a Valley economist who said the amount of money changing hands in real estate sales has dropped about 18 percent, to $6.9 billion, from the first quarter of 2006 to the first quarter of 2007. Hoffman is a professor of economics at the W.P. Carey School of Business at Arizona State University. Sales of existing homes have stabilized and there is about 10 months worth of housing inventory, Vest said. Normally, inventory is about four to five months' worth. Sellers are cutting prices to move homes, but that process needs to continue a while longer before the market can rebuild, he added. "We'll clearly see a recovery, but it's not going to go as quickly or surely as high as it did," Vest added.

NOTE from Thomas Nielsen: "Recent articles I've posted on the AZ economy including the above excerpt supports the notion that 1) Prices in AZ/Tucson are likely to stay flat. 2) The recovery will take longer than initially expected.

http://www.azcentral.com/business/articles/0607biz-vest0607.html