Arizona real estate predictions

More predictions for the Arizona real estate market! Local economist Elliot Pollack gazed into his trusty crystal ball and came to the conclusion that Arizona's real estate market hasn't hit rock bottom yet.

Some of the reasons aren't so mysterious; fewer new jobs and slower population growth. According to the latest Blue Chip job growth update by Arizona State University, Arizona's job growth dropped from 4.9% in November 2006 to 1.9% in November 2007. Arizona's population increased by 2.8% in 2007, down from a 3.6% increase in 2006. The fact that lenders have gotten much stricter is also a big factor. There are a lot of interested buyers that have great credit but just can't get the kind of financing they're hoping for. Tighter lending practices are attributed to shrinking the Phoenix buyer pool by 20%.

Pollack predicts that Arizona's real estate market won't bottom out until late 2008, early 2009. He expects a full recovery to take three to five years. This means we can expect more foreclosures and lower home prices.

Recently I've seen several articles and interviews with local real estate professionals predicting that Tucson's housing market will make a comeback in 2008, but I personally feel that we're not likely to see a big improvement until early 2009. Though we're continuing to see high foreclosure rates and falling prices, the Tucson market is still much better then the rest of the nation. Unfortunately I think there's still more room to fall and we'll see this play out during 2008. New home builders are slashing prices to bring in buyers, and resale home sellers are dropping prices to compete. A huge number of adjustable rate mortgages are "re adjusting" this year, making it difficult or impossible for some home owners to afford the payments. This will most likely lead to an increase in foreclosures. I don't want to be a pessimist, but I think we should look at the reality of what we're up against. Let's just hope I'm wrong and everyone can tell me they told me so!