Housing Doom Housing Bubble Blog

The consensus on the Street is that the Fed will cut interest rates when the meet tomorrow.  What then Doomers?  Anything good?

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Friday the Wall Street Journal was reporting "How Hot Land Sales Offset A Housing Glut In Phoenix".  After listing several recent large land deals in the area they said,

What’s happening in Phoenix has begun to play out across the U.S. in recent weeks. Public home builders and land developers, who dominated the market during the boom, are bloated with land and need to sell, partly to record losses to recoup taxes. Meanwhile, more nimble private builders and opportunistic investors are raising money and starting to snap up the pieces, buying parcels for as much as 60% discounts.

"It’s a great time to be looking for land in Phoenix," says John Fioramonti , senior managing director at Myers Builder Advisor, a real-estate consulting firm based in Scottsdale, Ariz. "The national builders are just in a panic to get rid of excess inventory."

The article goes on to point out that Phoenix has a history of boom and busts, and that a "buy and hold" strategy can be very profitable.  However, they also continue:

Buying land in this market, of course, carries large risks. If the housing slump triggers a regional or national recession, vacant land could stay that way for the foreseeable future. That’s especially true in certain markets in Florida, where the supply of homes is about four times the national average of a 10-month supply.

What do they mean "if"?  Two University of Arizona professors are stating that Arizona is probably already in a recession.  Vacant land is likely to stay that way for awhile.

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