Both single-family and multifamily housing construction will continue to be slow through 2008, according to predictions. "Obviously the credit crunch or financing is an issue, on top of which is the general economy," said Jay Butler, director of Realty Studies at Arizona State University's Polytechnic campus.
Butler has been tracking local housing numbers since 1972. While current numbers concerning the industry might be weak, they aren't the worst he has seen. "The mid-70s were pretty bad," Butler said. "We took some nosedives then."
The reasons were different three decades ago. "We had a recession that drove the housing market down" in the 1970s, Butler said, but today "we haven't had the economic issues yet, the recession, layoffs, other things."
Butler predicted that when the housing market does come back, the low-end market will see more activity before the high-end will.
"The lower-end represents people who are able to move," he said. "The high-end people would probably have to put their house on the market or do other things, and it's more difficult to move."
The current slow market is because of tight financing and the response to the hypermarket that began in 2003. The market was overbuilt, Butler said.
"We're paying the price for having a good time," he said. "It's like having a good time on New Year's Eve so you pay the price on New Year's Day."
Source: AZcentral.com