The Phoenix Housing Recovery Is A Total Mirage

Phoenix, Arizona is one of the cities that’s been greatly affected by the housing bubble.

There’s been some evidence of a rebound there, but the key thing to bear in mind is that volume of foreclosed/distressed/speculative activity is way beyond normal, and there’s very little sign of anything that indicates a normal, functioning housing market.

Housing Doom discusses new research from Arizona state professor and real estate specialist Jay Butler:

While sales have returned to the levels of the boom years, the market is being driven by speculation and foreclosures.  October sales undoubtedly received a bump from the concern of buyers that the $8,000 credit would not continue.  Speculators, however, are having a hard time finding renters for these properties–the rental market is glutted

The Phoenix economy continues to be poor and is unlikely to sustain it’s former rate of immigration.  What we are basically seeing is the activity of vultures picking over the carcass–this is not healthy activity.

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