Phoenix Real Estate Building Permits Drop and Resale Sales Increase

The 23 percent drop in building permits issued in the Phoenix real estate market in July may be a hint that the city´s new-home construction is slowing. Only 5,077 Phoenix real estate building permits were issued in July 2005 compared to the 6,608 permits issued in the same month of 2004. However, the total number of permits issued between January and July of this year, 38,277, is "up 8.3 percent over the comparable time period in 2004."

Resale Phoenix real estate sales are rising as well. They´re up 19 percent, from 10,685 homes sold in July 2004 to 12,720 in July 2005. Sales for the first seven months of this year are up 28 percent, with 81,439 homes changing hands, as opposed to the first seven months of 2004, when only 63,546 homes sold.

The increase in demand for both new and resale Phoenix real estate "is being driven by population growth and the ability of the new and old population to afford to buy housing." As long as builders and sellers remain reasonable and keep housing affordable, even the decrease in new construction should not worry Phoenix residents about a potential real estate bubble.