The Housing Hangover news from Elliott Pollack

The first article, The Housing Hangover: Take Two Aspirin and Call Me in 2008, from the Elliott Pollack website, reports on local economist Elliott Pollack's latest report on the housing market. Elliott points out that people forget that housing is cyclical. In 2004 and 2005, there was an explosion of roughly 123,000 single-family permits pulled in the metro area, yet demographics for that same time period supported only 84,000 to 90,000 units were needed. That led to an oversupply of between 15,000 to 25,000 units, and has led to the current "inventory correction". Elliott states that historically based on population inflows, we should be doing 43,000 to 44,000 new homes in the Valley, and that we will need to go through a period of under-production to get rid of the excess inventory. He says that the worse 2007 is in terms of new home permits, the better off we will be and the quicker we will pull out of this oversupply market. Very good article for a true representation of the market.

http://www.elliottpollack.com/word_docs/ASU%20Speech%202006_final%20presented.pdf

The second article, Mobile-home parks falling to builders, from the Arizona Republic, reports that development pressure is killing off old mobile-home parks as developers take advantage of their close-in locations for new housing. There were 601 mobile-home parks in the Valley in 1985. That number has fallen to 555, says Kammrath & Associates, a Phoenix commercial real estate firm. The value of the parks increased 157 percent in the two decades through 2005. Steven Happel, an expert on winter visitors at Arizona State University, said even without developers grabbing the land, mobile-home parks would be under pressure. "It's kind of lost its appeal. The older crowd, the pre-baby boomers, are now dying off. Baby boomers aren't going to move into those parks. They're going to buy more upscale stuff," he said. Susan Brenton, executive director of the Manufactured Housing Communities of Arizona, said she hasn't seen a new mobile home park open in the Valley in about five years. Developers are attracted to parks that already are zoned for residential, making them naturals for condos or apartments. Apartment rents are at record levels, and vacancy is low, at 7.7 percent. That is creating more pressure to find construction sites.

http://www.azcentral.com/php-bin/clicktrack/print.php?referer=http://www.azcentral.com/arizonarepublic/news/articles/1209mobilehome.html