Spec home explosion in Phoenix

Thanks to an HP reader for this site. Kind of expected this one - at the end of any bubble, any supplier thinks they can get the bubble goods to market and make a killing. So in this one, builders are building homes as fast as they can (or condo towers) thinking if they build it, they will come.

But... they stopped coming, around August 2005, in Phoenix. So supply is exploding at the same time demand collapsed.

We have been predicting that early in 2006 the spec home inventory would surpass the all-time high count of 2,400 from May 2003. With 92 more reported in the past week, the market now boasts 2,431 spec homes! The old record has been surpassed.

Looking back, we see there are now almost three times as many spec homes than only 3 months ago. And since the lowest level recorded in 2005, the spec home inventory grew over six times!