Sunday, October 16, 2011

Census numbers detail Arizona's housing bust

WASHINGTON - The Census Bureau has confirmed what many Arizonans already knew: Over the last decade, the state built too many houses and didn't fill enough of them.

The bureau said Thursday that the percentage increase in vacant and rented homes in Arizona was among the highest in the nation. Vacant housing grew from just under 300,000 homes in 2000 to just over 460,000 in 2010, a 61 percent increase. The bureau said the number of rental units increased 33 percent in the same period.

By 2010, more than 16 percent of Arizona's houses were vacant, according to bureau data. Of the 10 most populated counties in the U.S., Maricopa County had the largest percentage increase in the number of vacant houses from 2000 to 2010, the bureau said.

The county also had the highest vacancy rate, at 13.9 percent.

"Arizona took it a little bit more in the chin than the other states," said Anand Bhattacharya, a finance professor at Arizona State University with expertise in the real-estate market.

But he said the changes were consistent with U.S. trends in the housing market during that time frame.

"(It's) the reflection of the real- estate boom, which then went bust," Bhattacharya said.

The number of houses in the state grew by nearly 30 percent in that time, a bigger increase than in any state except Nevada. Experts say most of that construction happened before 2007.

A spokesman for the Arizona Department of Housing said the state was adding "60,000 homes each year from 2004, 2005, 2006."

"It's hard to imagine another market that would see that kind of growth," spokesman Shaun Rieve said.

But when the recession hit, fewer people could afford homeownership, leading to the state's high vacancy and rental rates.

At the same time, the bursting of the housing bubble cut property values in half, attracting investors who bought up properties and made them available to the increased number of people looking to rent.

"If you bought the property and you lose the property . . . you still have to live somewhere, so you go out and rent a property," Bhattacharya said.

Although the census numbers provide data only through 2010, the past year suggests that the worst of the housing crisis is over, Rieve said.

"I guess we're kind of bumping along the bottom," he said. "We're not decreasing at the rate we were decreasing before . . . that's the positive you can take out of it."

While the national home occupancy rate stood at 88.6 percent of all houses in 2010, the rate in Arizona was 83.7 percent, the bureau said.

Nationally, the percentage of homes occupied by owners fell to 65.1 percent in 2010. The 1.1 percentage-point decrease was the steepest since 1940, according to the bureau.

by Max Levy Cronkite News Service Oct. 12, 2011 12:00 AM

Census numbers detail Arizona's housing bust

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