More people will lose their jobs and economic growth will continue to sputter in the western United States.
That’s the depressing outlook for 12 western states over the next six months, according to a consensus of economists at leading firms, universities and state agencies.
"Although there are scattered signs the economy may be close to bottoming out, there is little optimism about an actual upturn in Arizona or nationally during the second half of this year," said Lee McPheters, an economist at Arizona State University, who participates in the Western Blue Chip and Arizona Blue Economic Forecasts. "The first stirrings of recovery are not expected until the housing market stabilizes and begins its turnaround."
Although existing home sales in the Valley are up over 2007’s corresponding figure, more than 40 percent are foreclosures, the report says.
The amount of unsold homes and foreclosures will push prices further down. That’s good and bad news, McPheters said. The upside is that declining prices mean homes are becoming affordable for more people, and should eventually revive the real estate market.
Arizona lost 41,700 jobs in July and more losses are expected for August. The construction and finance sectors are taking a big hit in job losses and taxable retail sales for July were down 10 percent from last year.