AZ Market News
With half the year behind us we have the usual mix of good and bad to report. There are broad implications from the expiration of the homebuyer tax credit that will undoubtedly be felt throughout the housing sector.
• In the last 18 months, new home construction’s share of total permitting soared to 33% of all permitting but has since dropped considerably and will continue to drop heading to the end of the year. With homebuilder’s overall sentiment at their lowest levels in over a year it is likely that their contribution to the market will continue to decline as they dial back construction in the face of an uncertain market. However, opposed to large tract home builders, Custom Home construction has steadily increased since the beginning of this year due to low construction costs.
• The first half of the year had the highest levels of property sales activity in quite some time. However, now that the homebuyer tax credit is officially off the table, we are seeing a steep drop in buying activity heading into the second part of the year. So far in July, property sales are down over 30% since June and this trend will likely continue throughout the 3rd quarter.
• Initial Notice of Trustee Sales are down 21.95% since this time last year in the three county area. However, trustee sales have stayed at extremely high levels and will probably stay there for the next 6 months. Properties “stuck,” in foreclosure are finally making their way out and back onto the market.
