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

Arizona and West poised to beat national job numbers

Arizona and West poised to beat national job numbers, from the Business Journal of Phoenix, reports that while the national economy is expected to remain sluggish through the rest of the year with a projected 1.3 percent employment gain, projections for the West, including Arizona, are much stronger. Arizona is expected to see a 3.5 percent gain in wage and salary employment for the year, behind only Nevada which is expected to gain 4.3 percent. The information came from the latest Western Blue Chip Economic Forecast put out by the W.P. Carey School of Business at ASU. The Blue Chip Forecast also looks at 2008 with Arizona jobs expected to grow 3.4 percent. As long as we keep gaining population and jobs, our market will be fine.

http://phoenix.bizjournals.com/phoenix/stories/2007/06/04/daily17.html?t=printable