Metro Phoenix's homebuilding market is on the second step of a five-phase recovery process, according to one of the nation's top housing analysts.
During a Wednesday Urban Land Institute panel discussion on the future of homebuilding, California-based real-estate consultant John Burns laid out the five stages the current market must go through to rebound: job growth, reduced housing vacancies, a market in which demand exceeds supply, increases in rents and home prices, and then, finally, new construction.
"Phoenix is on its way," Burns said at the real-estate think tank's national spring conference held in downtown Phoenix. "The area has job growth and is firmly in Stage 2."
With Phoenix's new-home construction slower than it has been in at least three decades, existing demand is slowly consuming the supply of empty houses, many built speculatively during the boom.
Homebuilding had been metro Phoenix's biggest industry and economic driver until the housing crash. During the boom of 2006, more than 64,000 new houses were built across the region. At the time, Phoenix rivaled Atlanta for the highest number of homebuilding permits in any metro area in the U.S.
This year, only 2,064 homebuilding permits were issued across metro Phoenix through April, according to new data from RL Brown's "Phoenix Housing Market Letter." That puts the homebuilding market on track for fewer than 6,000 new houses this year.
"The homebuilding market is confusing now," Burns said. "How can we have the best affordability levels in my lifetime and the lowest number of new-home sales?"
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