Once more I find myself disagreeing with Jay Butler of ASU’s Realty Studies. Comparing the current bust in Phoenix with the ’70s bust:
Jay Butler has been tracking local housing numbers since 1972. And while current numbers concerning the industry might be weak, they aren’t the worst he has seen.
"The mid-’70s were pretty bad," said Butler, who directs realty studies at Arizona State University’s Polytechnic campus. "We took some nose dives then."
The reasons were different three decades ago
"We had a recession that drove the housing market down" in the 1970s, Butler said, but today "we haven’t had the economic issues yet - the recession, layoffs, other things."
Speaking of the current budget crisis in Arizona, the Arizona Republic stated this morning:
An economy buffeted by the housing slowdown has had a ripple effect on state budgets nationwide, as well as through many levels of local government.
"The revenue drop-off was greater than we thought," Burns said, referring to last spring, when lawmakers were crafting the current $10.6 billion budget. "We should have been much more conservative in our estimates."
Warning signs started popping up before the ink was dry on the budget. But state officials kept hoping for rosier revenue numbers through the summer, even as sales-tax and income-tax collections continued to lag.
It sure looks like this is shaping up as a recession, so I wouldn’t dismiss a comparison with the 1970s bust too soon. Butler has also been stating for some time that this bust is not as bad as previous busts, even as the Phoenix housing market has continued to deteriorate. We might not have hit the lows seen previously yet, but the market continues to head that direction.
