Metro Phoenix home building forecast

I don’t see how they can forecast 8,500 single-family home building permits for all of 2010 when only 4,118 permits were issued in the first half of 2010, that’s the $8,000-first-time-home-buyer-tax-credit half of 2010.

But I don’t follow building permits so maybe I’m being too picky. Nevertheless, 2010 will be “the slowest year for housing construction in the Phoenix area for decades.”

(To give you an idea how bad 2010 is shaping up to be for new home construction in metro Phoenix, last year 12,500 single-family home permits were issued.)

More importantly, I think, the post by Catherine Reagor at azcentral.com says the experts are forecasting a 45% to 50% increase in permits in 2011 (to about 12,500 permits, I estimate) and then in 2012 an increase to 20,000 permits.

In conclusion;

  1. 2010 will be the worst year for metro Phoenix home construction in decades, and
  2. We can only go up from here.

I’m glad new home construction is so low because it helps with the oversupply of homes. But on the other hand, as Phoenix residential construction increases in 2011 and 2012, so will the Phoenix economy.