Census confirms Arizona’s housing boom and bust among tops in nation - East Valley Tribune: Arizona

Census confirms Arizona’s housing boom and bust among tops in nation

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Posted: Thursday, October 6, 2011 9:30 pm | Updated: 1:42 am, Sat Nov 12, 2011.

WASHINGTON – The Census Bureau on Thursday 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 the increase in the percent of vacant and rented homes in Arizona was among the highest in the nation. Vacant housing grew by 61 percent and rentals increased 33 percent in the state between 2000 and 2010.

By 2010, more than 16 percent of Arizona’s houses were vacant, according to bureau data. Of the 10 most populated counties in the country, Maricopa had the largest percentage increase in the number of vacant houses between 2000 and 2010, the Census said. It 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 are “consistent” with national trends in the housing market in the last 10 years.

“(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 Arizona between 2000 and 2010, higher growth than 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,” said spokesman Shaun Rieve.

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 burst 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.

While the Census numbers only provide data 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 last year, the bureau said.

Nationally, homeownership fell to 65.1 percent in 2010. The 1.1 percentage point decrease in ownership was the steepest since 1940, according to the bureau.

Max Levy is a reporter for Cronkite News Service.

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