For those that would rather see the chart page I usually put up and read a quick summary, just scroll past the screen cast and read away.

Read On There’s More

The Days Are Shorter

I heard one report this week on the September stats saying the reason the totals sales dropped from August was due to the days being shorter in September and buyer’s didn’t have as many hours in the day to look at homes. I had to laugh. I never ceased to be amazed at the reasons given by real estate agents for a decline in sales.

September sales are usually less than August because it is a month that falls between the buyers that are looking for homes for their college age students, people that have had a job change during the summer and need to find a place as school starts and the arrival of the snowbirds that plan on buying because they have rented in the past and now are ready to move here.  If not permanently they are ready to purchase a home for continued winter months or the prospect of making the move in a few years.

The Building Shadow Inventory in the Media

The total inventory dropped again slightly in September.  New listings were also down from the previous month and year.  I know there is a lot of talk in the media about the building shadow inventory in Tucson.  If it is true it is another case of the Banks being  behind the curve and the market.

There is no reason for Banks to be holding large amounts of inventory off the market.  Especially inventory that will fall in the sweet spot between $100,000 and $120,000.  This is where most sales are being recorded and where the greatest demand for inventory lies.

The total inventory for residential properties in Tucson is just over 5,000 homes.  We are actually facing a shortage of homes at certain price points.  One reason for sales dropping this September is a lack of properties that meet buyer criteria.

It is time the banks did some more homework on the market and began strategically releasing properties in areas and at price points where demand is highest.

Thirty year Mortgage rates took a big jump this week going from sub 4% to over 4.3% in one week.  When buying a home that amounts to thousands of dollars over the course of the loan.  Buyers in the market need to be balancing their search by looking at purchase price and interest rates if they are going to have a mortgage in order to purchase.  Of course, cash buyers can continue to leverage their buying power by looking for the best bang for the buck and knowing they can quick close on any sale over a buyer competing for the property using a lender.

The Debt Ceiling Debate had little final impact

Considering the melt down in Washington over the Debt Ceiling, I’d say the number of closings in September here in Tucson was strong.  Even though it now seems like that debate was a long time ago, in real estate time it was just over the time needed to find, offer, inspect and close on a home.

We are in the final quarter of the year. The snowbirds will be arriving this month (no elections to speak of in November back home, so come to Tucson early). The second semester transfer students will also be arriving in December with some of those parents looking to purchase a place where their student and some others can live. With prices at the low point for a decade, there could be some new buyers in the market this year.

That said, I haven’t seen a home in Tucson as the WOOT! Daily Deal yet.
So . . .

Here’s the link to the Tucson MLS September 2011 Statistics Report  Those that want to do some digging in specific areas of town or types of homes.  There is a lot of data in the 13 pages included in each months report.

Tucson MLS Statistics – September 2011 is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

Now compare that to August of 2010 at 7170 and we have a decrease since last year of 27.94%

No That Doesn’t Mean It’s a Great Time to Buy a Home

This is where most Real Estate bloggers would pull out the tried and trite statement “Now is a great time to buy a home” with a little jab of “Before they are all gone”.  Right!

Any regular reader here knows I don’t believe there is a time where it is a great time to buy a home for everyone.  It always depends on the individual situation and circumstance.  That said, I am a bit surprised that the lack of available inventory hasn’t been mentioned in any of the local media that I can find.

Active Inventory continues to shrink

The sweet spot in the closed transactions is the 100,000 to 120,000 range with over 140 units sold. The Luxury Market over 1 Million sold 2 units in August.

Consumer confidence in the economy and the lack of available jobs aren’t helping the housing industry. Tucson with a large population of Snowbirds and second home buyers is less effected than many communities yet, the lack of consumer confidence puts many in the wait a while longer category.

Cash Transactions Still #1

Conventional loans 346 were a close second to Cash 364 and FHA took third place this month with 277.

The Mortgage Interest Deduction

The Mortgage Interest Rate Deduction is one of the things that the “Super Committee” is looking at as a way to help close the deficit gap.  If Tucson is any indicator, the number of people who will be taking advantage of that deduction drops each month.  Is there a point where the number of households taking the deduction makes it no longer the great savings Congress things it is?

Wouldn’t it be something if the best argument for keeping the deduction in place is the fact it won’t impact the deficit near as much as projected just a year ago.  About 1/3 of all transactions being paid for with Cash, won’t be taking that deduction.  In the past Cash transactions amounted to single digit number each month.  This year, it is the leading way of closing real estate transactions in Tucson.

Here’s the link to the Tucson MLS August 2011 Statistics Report  Those that want to do some digging in specific areas of town or types of homes might find an interesting nugget or two.

Tucson MLS Statistics – August 2011 is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

Reporting Areas

To keep the numbers reported here in line with that report I’ve pulled the data for the 13 areas in and around Tucson that are used for the monthly report.   But those numbers really don’t reflect what is going on in Tucson in two ways.   Those outlying areas, like Saharita, and Green Valley as well as the Extended Northwest don’t really reflect what is going on in the Tucson real estate market.   There are really only 9 areas that are in the Tucson Area which include, Tucson, Oro Valley, Marana and Vail.

Property Types:

There are five residential property types in the MLS for Residental real estate.   Single Family (SFR) Manufactured Single Family, Condo, Townhome, Mobile.

I’m no longer going to include Mobile in the statistics I report here.   Why, for example:   January 2011, there were only 7 mobile home sales for the month, yet those 7 sales made the avarage sale price over $2000 lower and the median sale price about the same; from 137,055 it went up to 139,000.

The mobile home closed transactions really should not be in the same category for reporting purposes the other property types.

Therefore, I’ll be restricting the sidebar statistics to 9 Tucson Areas, and 4 property types.

Is this Skewing the Numbers?

I’ll be the cynic for a minute.   “This makes the numbers look better than they really are”.   I’ll counter my own cynicism.   Not really, what is being reported is what skews the numbers for Tucson and makes them look worse than they really are.

We should all remember, that what is reported in the Tucson MLS only reflects properties that were listed in the Tucson MLS system.   New Home Sales that were never entered in the MLS or those homes sold by the owners are not recorded in the statistics.

Going into the 2011 I want to reflect an accurate picture of the market.   I don’t believe what is being reported by the MSL and then reported in the “Arizona Daily Star” is an accurate representation of the Tucson Real Estate Market.

January 2011 – TAR MLS Statistics Reporting Change Here is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

Would You Call this "A Fixer Upper"

Most people working in Real Estate are happy to see 2010 go into the record books.   I’m not going to go into the records that were broken this year.   There are too many.

But I thought I’d take a minute and talk about the closed transactions for December that are already in the books.   831 and counting. (I know that’s not a sentence)   We have two business days in January for the rest of the transactions to be entered without penalty.   But in the past 6 months the $250 fine hasn’t seemed to impact many brokerages that continue to enter sales for the month well after the statistics have been pulled.

Currently there are 830 closed transactions for November 2010.   Therefore, it is pretty safe to say the month of December will close with more sales than October (803) or November.   The average sale price is up over $8000 from Nov.   The median sale price is about the same up around $700 from Nov.

Speculation on Average Sale Price – December

I’m going to guess the reason the average is higher is the number of REO properties that have been pulled off the market the past couple of months.   Meaning someone besides a bank is actually selling.

It seems every year for the past 4 years we have been saying goodbye and good riddance to the previous year.   Let’s hope this is the last year for awhile.

December 2010 More Closed Transactions than Nov is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

When you can’t believe what reality is shouting we raise the shield of Denial.

During the last couple months of 2006 real estate agents and sellers were wondering if the silence was temporary or permanent.   December saw some activity but for the most part the over caffeinated market was left with a huge headache and withdrawal symptoms.

The sellers didn’t want to believe it was over.   There were a few buyers in the market.   There always are a few, families and individuals move, take new jobs, retire, buy a second home, life goes on.   But no one knew what to expect next.   Speculators that hadn’t taken possession of new construction often walked on the contract.   Sellers went from one listing agent to another believing the reason their home wasn’t selling was marketing, not price.

But trying to sell a dozen roses for $60 on Valentines day isn’t the same as trying to sell those same roses for $60 the day after.   The roses are the same, but the time has past.   But Denial is a strong emotion.

Gradually, prices came down, and down, and down.   Many sellers rode the market down, still believing they could “Try it at this price, we can always lower it, right?”   And lower it they did, often taking thousands less when they finally got an accepted offer months later.

Then August of 2008, (oops typo here it was 2007) the First Magnus meltdown hit the nation.   Centered in Tucson, it actually didn’t have as large an impact on real estate here as it did in many other cities and metropolitan areas of the country.   The biggest impact to the local economy was probably all the mortgage industry employees suddenly without jobs, locked out of their offices and without the typical layoff and severance packages.   One day they were going into work and the next they were looking for a job.

The Process was Broken Badly

The process that had worked in most real estate markets for decades was simple.   Put down 20% of the purchase price, get a loan from the bank, pay your mortgage.   Twenty or thirty years later you would burn the mortgage at a family gathering and eat chicken.   (Maybe steak, since you didn’t have a house payment any longer).

But now people were able to “Fog a spoon, get a loan”.   No need to prove you could make the payments once the no interest provisions had expired.

Many people were upside down on their home purchase the day they took possession.   They purchased the home with a first and second mortgage on the property, they also “folded” the closing costs into the loan.   Meaning they owed more than the home was worth from day one.

No longer was a bank making the loan and taking the monthly payments.   They were “bundling” the loans and selling them as securities as quickly as they could.   It was the norm to have your mortgage “sold” and find out that you were making payments to a company you had never heard of or done business with in the past.

The finance industry bundled, sold, bundled, sold, rebundled, sold till no one knew who really held the mortgage.   It was like passing around a stick of dynamite with a long fuse that was already lit.   No one wanted to be holding the stick when it went off.   But it was inevitable that it would eventually blow up.

Painting a stick of dynamite to look like a candle, or a barber poll doesn’t mean it isn’t a stick of dynamite.   But that’s what was happening.   When it all went BOOM, there was plenty of blame to go around.   But blame doesn’t fix the problem.   There is still a very sick patient.   In this case it is the real estate industry and those who own real estate that find themselves in many cases holding the stick.

The Road To Recovery

Far to many have equated recovery with prices going back up.   That’s not recovery, that’s relapse.   We can’t imagine someone smiling and clapping their hands when their doctor says,   “Your cancer is back.”   You are growing abnormally again.   But so many people looking at real estate seem to equate recovery with higher prices. That’s not the answer to recovery.   The system is broken and recovery is a long processes.   There is no quick fix.   And just when most think we have things getting better we find there is more cancer.   The sickness has spread and the recovery prolonged.   In real estate, the question is “have we hit bottom”.   Translated, are we done finding cancer so we can get better.   Just when we think progress is being made we find the culprit “the finance industry itself” is still spreading poison in the system.

Real Estate will never fully recover as long as the finance industry continues to poison the process.   The finance industry has been a parasite infecting the host.   They are symbiotes feeding on and sickening the host.   The relationship between Finance and Real Estate wasn’t always this way, and till it changes and the poisoning of the system stops we won’t have a sustainable recovery of the housing market in this country.

Yet, the patient isn’t dead, far from it.   There are plenty of things a sick body can do to help itself.   The same is true for the housing market.   But the road to recovery isn’t quick and it isn’t going to be “easy”.   Getting healthy, never is.

The Housing Recovery Isn’t About Price II is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

Unhealty Growth

Rapid Growth is often a sign of disease, most often a tumor, worst case a malignant tumor.     Abnormal growth and it isn’t healthy it is disease.   The road to recovery from this kind of disease is long and often painful.

The same thing happened in this countries real estate markets.   In this case that rapid growth was fueled and fertilized by a finance industry totally out of control.

Real Estate was fertilized extensively with “easy money”.   When this happened it was a cancer to real estate.   Rapid uncontrolled growth that inflated prices.   Yes, some people made a lot of money off this rapid growth.   The most money was made in the financial sector, not in real estate.   And as such the financial sector just kept pouring on the fertilizer “easy money”   so they could in turn make huge profits in this shell game.

Then reality hit, like the doctor finally saying to the patient.   Your growth hasn’t been healthy, you have cancer.   The patient suddenly was facing the reality of the situation, but like many faced with reality the first stage was “Denial”   and there was plenty of it to go around.

The End of the Beginning – First Magnus

Some think it all started to come apart here in Tucson in August of 2008 with the sudden fall of First Magnus; that wasn’t the beginning, that was the end of the beginning. The beginning was on Thanksgiving weekend 2006, almost two years earlier.

The summer of 2006 was rabid.   Tucson real estate was in what then was called a “Frantic” market.   Rapid purchases, rapid increases in home prices, people getting $10,000 over asking price with multiple offers.   Homes were increasing in price (notice I don’t say value) at a rate of $5000 a week.   Yes, A WEEK during that summer it was total chaos.

The investors had sold out in 2005 and early 2006.   They sold to the speculators, gamblers,and get rich quickers.   I remember clearly, what that time was like.   The phone never stopped ringing.   Midnight was an early night out of the office.   Then Thanksgiving weekend the phones fell silent.   Like the plague of locusts moving on to newer fields of grain, the phones fell silent.   It was spooky, the “Buyers” were gone.   Would it pick up again after the holidays?   It didn’t, it never returned.   In nature any plant over fertilized will grow rapidly, but keep it up and the plant will burn itself out and die.

A common treatment for crabgrass in the Midwest is to fertilize the heck out of it in early spring.   It grows so fast it kills itself.   They and kill it with weed killer and it survives, but over fertilize it at the right time and it dies.

The market had reached saturation point.   To be continued . . .

The Housing Recovery Isn’t About Price is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

Not a superstorm, just a wet ride

The weather has been beautiful here in Tucson this week.   Warm days, cool nights and slight breezes in the evening to bring a chill into the room.   Weather this time of year in Tucson is a pleasant break from the 100 degree temps that made this the second hottest summer of record here in Tucson.

The weather news the past couple of days had been dominated by the Superstorm to hit the midwest and move on to the east coast.   The lowest pressure reading ever was recorded for the Midwest on Tuesday in International Falls Minnesota at 956 millibars.   This broke the old record set in Cleveland, Ohio on January 26, 1978 when the record was set at 958 millibars.

I was living in Bellville, Ohio, just 70 miles south of Cleveland at that time.   I was in that Superstorm.   I remember tying a rope around my waist and going outside in a black snowmobile suit to shovel the driveway.   Why?   LOL, well at the time it seemed like a good idea.   My wife said I was five steps away from the house when I disappeared.   Total white out.   It snowed for 5 days.   Snowmobiles were the only way to get around town period.   A semi was buried for most of a week on the highway at the end of a runway in Mansfield, Oh.   The truck had been missing for most of a week.   The drivers brother had tracked his route and told the authorities his rig had to be in that big drift.   It was. When the skies finally cleared the drifts at the end of our house were as high as the roof.

Two days ago a storm more intense than this hit half the country.   It didn’t even knock a butterfly off a flower here in Tucson.   We weren’t effected by the storm.

Tucson Housing Market Superstorm NOT

The housing market here in Tucson hasn’t been as immune to the stormy conditions in the financial sector.   Very few people buy a house like they buy a candy bar.   Not many just plop the cash on the counter and take the keys.   Now there are questions flowing everywhere in the financial sector on the practices of the banks from lending practices to foreclosures.   It leaves a lot of people in limbo as   I stated yesterday.   Some potential buyers are taking a “lets wait and see where this shakes out” approach.   Others with offers on the table for REO homes are waiting for a response or seeing the home they just made an offer on being pulled from the market for “review”.

Everyday we hear of another bank with documentation issues or verifying that ROBO Signings were not a part of their foreclosure process.   The national media puts out a story proposing that “Anyone purchasing an REO home in the past three years might have questionable title to the home”   Think a little fear was spread with that headline question?

If you are living in your home as a home, have no intentions of selling or buying in the near future you are for all intents and purposes out of the storm.   You don’t need or want a loan, you aren’t going to be selling your home in the near future and the thing that is most on your mind has nothing to do with real estate.   Maybe it is the World Series, or your costume for Halloween.   But it isn’t real estate.

The effects of the market and financial industry are pretty much the same as Tuesday’s Superstorm had on a butterfly in Tucson.

Nothing wrong with that.   But for the rest . . .   Navigating today’s market conditions are like canoeing across a lake filled with white caps and lightening bolts.

Superstorm 2010 & Tucson Real Estate is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

When the report was released and reported in the “Arizona Daily Star” it was noted that the decrease of transactions from 911 to 873 in this market was notable.   Now that margin has shrunk to an unremarkable difference.   But it is old news now.

The Median Sale Price has fallen consistent with the number of REO sales which are taking place along with a decreased number of short sales.   That average reported was $145, 855 for September.   It is down from that in October to $136,500.

The Average Sale Price in September was down from August.   $181,612 to $186,562 in August.   Today that number sits at $173,333 for October.

New listings in September rose over August from 1,455 in August to 1,680 in September.   Contrary to what you might believe not all these listings were from Banks.   There are JPP (Just Plain People) who need or want to sell their homes, even in this economy.

Active Listings Increased from 7,170 in August to   7,217 in September.   I’m wondering if we aren’t going to see some real movement for a month or two here because of so many Bank listings being pulled off the market for “Review”.

Since we are just a few days from closing out October I’ll limit the reporting of September number to these primary indicators.

What’s happening now?

I feel like starting out with “LOL”   but not in a good sense of the word.   It seems everyday more revelations in the financial sector of banking, mortgage and finance muddy the waters of a housing recovery.   Homepath has been a shining light for many in recent months making home ownership possible even today for first time home buyers.   But the recent “ROBO Signing” has pulled many of these listings from the market and leaving some buyers in limbo with contracts either waiting for acceptance or simply suspended in limbo.

Tucson Real Estate Sept. 2010 Snapshot is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

However, a quick data pull that morning gave me an approximation of what will be in the report for closed transactions and pending contracts.

The Closed transactions at that time were 861, currently that number is 877.  By contrast July currently stands at 823 closed transactions.  Typically we have 20 to 30 late entries so we could end up in the 880 to 890 area for August.

Pending Sales include all properties that are either Active Contingent, Active CAPA, or Pending with a Pending Date between August 1, 2010 and August 31, 2010.  That number is  currently  1502 pending contracts.  This is a strong indicator of where we are headed into the final quarter of the year.  July came in at 990 down from the previous month and down from July 2009.  However, the July figure has been revised from the original report which showed 1703.  I indicated at that time I could get 1364 pendings from the system.  Side note: (The summary page Pendings now show 990, but the next page still adds up to the previous stated pendings in the report.)

Tucson MLS Statistics Reports Conflicting Data

We are getting a lot of conflicting numbers in The Tucson MLS Statistics reports since switching to the FLEXMLS system.  I’m not saying this is an issue with FLEX, but we switched to the FLEXMLS system in April.  We should be getting good data in our reports  by July, but we arent.

That’s the snapshot.  I’ll have a full breakdown of the report as soon as it is made available.

Tucson Real Estate Snapshot August 2010 is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

I tired to reproduce that number or something close to it but couldn’t get the same results.  Just a few minutes ago I ran the query again and got 1364.  Someone is still inputing July Sales into the system.  (this happens every month.

How Pending Sales are Calculated

Pending contracts are:

• Residential Sales
• With a pending date in the current month
• with a status of Contingent, Active CAPA, or Pending
• In the 13 areas designated by the MLS as “Tucson Area”

783 Contingent
249 Active CAPA
332 Pending

Total 1364

This total is still over last month and over last July, but not 47% higher.  END UPDATE

The Tucson MLS just released the Statistics Report for July 2010 a few minutes ago (Friday evening go figure).  I’ve not been looking forward to the final Close Transactions.  The report reflect 792 closed transaction.  That is the lowest number going back over 10 years for a July.  Even taking into account that two years ago they narrowed down the reporting to 13 areas around Tucson instead of everything entered into the system.

July Closed Transaction Down

I knew coming into this month it was going to be down.  I didn’t know how far.  I guessed between 750 and 850 f0r the final stats on the month.  Even though the report has 792 the MLS system is already showing late entries.  The number this evening stands at: 814. There are more to come, every month we see more and more late entries.

July Pending Sales Way UP

What I didn’t expect was the Pending contracts for July to 1703.  That is up over 43% from June and more than 37% over July 2009.

Since we don’t have pending figures going back in the report I’ll have to pull past reports.  I’ll do that in a day or so and see how large an increase this is.  It might be the most pending contracts we have seen.

Search Activity Way Up

This is strictly  anecdotal  information.  But this week we have seen the highest number of pageviews on site searching for homes since January.

This blog’s unique visitor and pageviews for the weeks stand at :  Unique Visitors: 1737 Page Views: 4868 and counting.

Now it is time to throw some veggies on the grill and get out of the office.

July 2010 Closed Transactions Down – Pending Way Up is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.