Tucson A Pox Upon Your House
July 4, 2007
Post Tags: a-pox-on-your-house , Tucson Real Estate , Tucson-Home-Buyers , tucson-home-sellers
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There is a famous quote from William Shakespeare’s in “Romeo and Juliet“.
Often quoted as “A pox on both your houses.”
This is a famous quote from Romeo and Juliet. As Mercutio dies, he utters this phrase three times, cursing the families whose rivalry led to his death. The phrase is commonly applied to criticize warring factions whose rivalry brings ruin to others.
The last sentence is the one that draws attention for this post.
“The phrase is commonly applied to criticize warring factions whose rivalry brings ruin to others.”
The warring factions in this case would be:
- The National Association of Realtors
- The National News Media
The National Association of Realtors
The NAR has often been accused over the past two years of “Painting a rosy picture of the housing market” Sometimes to the point of ridicule and speculation that David Lereah was demonic in nature.
The National News Media
The national news media is doing what it always does best. It spreads doom and gloom and paints the picture with the worst brush possible. For more than a 100 years the mantra has been “Bad News Sells Papers” Sensationalism sells even more.
There are in Real Estate what are called the bubble Bloggers, focusing on the doom and gloom of the Real Estate Market both nationally and locally. The National News Media could be the Bubble Bloggers of Life focusing on doom and gloom of Life itself.
Yelling Fire in a Theatre
The NAR does at times paint a rosier than real picture of the market. However, it is pretty transparent in it’s attempt to get buyers in the market, since it is a shortage of buyers and not sellers that the nation’s housing market reflects. It is a great time to buy. There is a lot of choices and asking prices are coming down in most markets.
Will it get better? Will there be a time that is better to buy? Maybe, but that isn’t the question. Is it a good time to buy? Yes. Will it get better? Hum! crystal ball please.
However, the News Media at times produces articles that are on a par with yelling fire in a theater. Here is an example from the National Media on June 21, in the “Arizona Daily Star” titled: Analysts: Slump in housing may spur full recession
Here are some choice quotes from the article
- The worst is yet to come for the U.S. housing market.
- The national median home price is poised for its first annual decline since the Great Depression
- “It’s a blood bath,”
- Driving prices down
- The housing sector will push the U.S. economy into recession unless the Federal Reserve cuts its benchmark rate at the first surge in unemployment
Rivalry that Brings Ruin To Others
- The NAR paints a rosy picture of The Real Estate Market
- The National News Media paints a very negative Real Estate Market
The Buyers and Sellers in all Real Estate Markets are hurt. I wouldn’t say Ruined but it has certainly lead to confusion on the part of Buyers, and has made it more difficult for some Sellers to find a qualified buyer.
It is unfortunate that so many people take time to read the headlines only without digging into the details. Even then sometimes the details are twisted and spun.
If you take the time to read this article of doom and gloom you will find that many of those quoted are not actually in real estate, they are in investments in speculative markets associated with real estate. For those that gambled and put their money into high risk loans expecting a huge payout are now finding their investments are worthless.
What is Happening in Tucson Real Estate?
The Tucson Real Estate Market has been growing stronger each month since January. If the current trend continues we will reach a point of convergence in the market concerning the Year over Year statistics around September of this year. For a more detailed look at the figures for the latest reported month of May 07 check out these posts:
It might seem like the pox is on your head especially of your are trying to sell your home. However, the idea of the pox is to put it on the heads of those that seem to bring harm to you because of their warring.
Therefore, Tucson Home Buyers and Sellers can put a pox on the heads of the rose colored glasses and the doom and gloom by ignoring them and researching the issues of the local real estate market for yourself.
I know this is sounding like a broken record but it is still true.
- Sellers price your home right and have it ready to market and it will sell
- Buyers there is a lot of inventory from which to pick, but don’t think you can come in with some ridiculous low ball offer and sellers will thank you for bringing them an offer.
Buyers and Sellers place this curse by taking the time to educate yourselves about the Tucson Real Estate Market and please don’t use the media as a definitive source of information when making these important decisions concerning the sale or purchase of a home.
July 5th, 2007 at 7:07 pm
Hi Dave!
His name was David Lereah. He was the Chief Economist for the NAR. Take a look at this blog for the plethora of reasons he was pitched forked by the bloggers: http://davidlereahwatch.blogspot.com/
I submit that the entire problem with the giant run-up in prices was due to the media and NAR. Now that the media isn’t playing nice with Realtors(r) you are not happy. Thank the good one above the media has finally come to their collective senses and asked someone else what was going on.
If the media continued to interview people “in real estate” we would continue to see false and misleading headlines, as we saw during the BOOM. The media was your biggest asset during the good times. With the NAR’s help they gave everyone the false sense of security with ads and headlines like these: price’s never go down in Real Estate, They are not making anymore land, buy now or be forever priced out of the market, just to name a few.
The media should have “yelled fire” about 22 months ago. Any sane individual could plainly see that the prices were not supported with fundamentals. Couple that to exotic and toxic finance and “we have a problem Houston.”
Take away all the headlines and look at the numbers. Look at the numbers posted by the big home builders on Wall St. - Bad, Bad, Bad. Look at the CDO Hedge fund markets imploding. Look at the CPI. Look at the avg. household’s debt ratio. It is not pretty.
Tucson RE:
A healthy RE market is one in which rent per month x 12 x 10 = price. Basically, people should buy a home when it is near or at what it would cost to rent using the metric I posted above. Anything more and the market is overpriced. Plain and simple.
When common sense comes back into the market you will see a few more buyers. Owning a home costs a lot more than the price you pay at closing. Thankfully, the media is educating potential homeowners with this crucial advice. Sometimes, and I would say right now qualifies, simple common sense tells you to rent.
A few questions:
Do you think Tucson is immune to national trends?
Where is Tucson going to get people to buy homes if the local market is priced out and the people that usually buy (retiree’s from Calif., and the NorthEast) can’t sell?
What kind of job creation can Tucson claim to support these home prices?
Why are we different than Phoenix?
July 6th, 2007 at 2:52 pm
Wonderful article. I was unfamiliar with the term but really enjoyed the read.
July 6th, 2007 at 6:05 pm
Dave,
You calling bottom here?
bobby joe,
July 6th, 2007 at 6:06 pm
Dave,
You calling bottom here?
bobby joe,
Great post!
I’m waiting for Dave’s reply to your questions.
watcher
July 6th, 2007 at 10:27 pm
bobby joe and watcher, hope you guys had a good 4th of July.
I fixed the typo on Lereah’s name. I never read the guy and had no reason to read him. I’m met Laurence Yun, he seems like a nice person and not given to the politics of numbers, time will tell.
bobby joe, your questions, not sure I understand all of them since some are short. I’ll do my best to answer, some I have already addressed in other posts.
1.Do you think Tucson is immune to national trends?
No, I don’t think it is immune, but all real estate is local. National trends are just that trends, they effect some places more than others.
Tucson is not an industrial town, it seems to get a lot of its employement from:
Education, Medical, Military, Service, Defence.
It does have a large segment of its population having Tucson homes as their second homes not their primary homes.
2. Where is Tucson going to get people to buy homes if the local market is priced out and the people that usually buy (retiree’s from Calif., and the NorthEast) can’t sell?
We will have to wait to see if this question ever becomes an issue. Right now neither of the ifs are in effect. Local homes are selling and many buyers are still coming from Calif, and the Northeast. So we will have to wait to see what would happen “if” these two things come to pass.
3. What kind of job creation can Tucson claim to support these home prices?
Nothing that I can tell, it seems obvious to me from national markets as well that jobs don’t have much bearing on the price of housing. Some markets see run ups in prices for various reasons, some times it is actually an industry moving into the area, but sometimes it isn’t.
I can’t imagine home prices where the average is $600,000+, but they certainly do exist and people still buy homes in those markets. Don’t ask me how they do it, but they do.
I remember back during the Carter administration people were buying homes and paying 21% interest on their loans. I don’t know how they did that either.
4. Why are we different than Phoenix?
This is the one I’m not sure what you mean. Phx has 53,000 homes on the market we have 9,700. They have a lot of water and we don’t. They have more industry but a market the is more depressed than ours. They have highway systems we will never have, they have water, they have state government etc. So I don’t know the why but this is some of the what that makes us different.
watcher, what do you mean by calling bottom here? I’m talking about the news media and the way they bend things to put the worst possible twist on the news. What does this have to do with some kind of bottom? Bottom of what? I don’t think I’ve ever used the term.
As far as calling, I don’t make calls or predictions that’s for people supposedly smarter than I am.
I try and give competent analysis of the data not skewed to either swing of the pendulem. As unbiased an opinion as I can to provide buyers and sellers with the best possible analysis of the data when making decisions about Tucson Residential Real Estate.
July 7th, 2007 at 10:47 am
I try and give competent analysis of the data not skewed to either swing of the pendulem. As unbiased an opinion as I can to provide buyers and sellers with the best possible analysis of the data
And you’re doing a pretty good job too.
July 7th, 2007 at 2:14 pm
Tucson is not an industrial town, it seems to get a lot of its employement from:
Education, Medical, Military, Service, Defence.
It does have a large segment of its population having Tucson homes as their second homes not their primary homes.
Dave, I understand that we are a service based economy. As such, in order to perform local services… local people need to be able to “live” here. They need the basic things in life that everyone else needs too. How many people make $45K a year in Tucson? Of them, how many can truly afford a $250K median priced home?
Who is going to be able to afford second homes with credit contracting while the net total of Mortgage Equity Withdrawals (MEW) continue to slide month after month? The rich or the super rich? Either way, the second home buyers are not coming here in numbers that will buy up the excess inventory, no?
The national trends say that the housing market is in a world of hurt, right now. The national trends say that we are going to be in this mess until, at least, ‘08.
My point was you have said that a significant portion of our market is determined by outsiders moving in. How, prey tell, can these outsiders avoid all the housing market problems that will slam the rest of the country, only giving Tucson (7th overpriced market in the U.S. in ‘06 according to Forbes) a slight hiccup?
We will have to wait to see if this question ever becomes an issue. Right now neither of the ifs are in effect. Local homes are selling and many buyers are still coming from Calif, and the Northeast. So we will have to wait to see what would happen “if” these two things come to pass.
How can you say that? Have you read ANY news or looked at ANY data from California, Mass.,Florida, etc.? They are tanking faster than the titanic.
it seems obvious to me from national markets as well that jobs don’t have much bearing on the price of housing. Some markets see run ups in prices for various reasons, some times it is actually an industry moving into the area, but sometimes it isn’t.
I can’t imagine home prices where the average is $600,000+, but they certainly do exist and people still buy homes in those markets. Don’t ask me how they do it, but they do.
I remember back during the Carter administration people were buying homes and paying 21% interest on their loans. I don’t know how they did that either
Re-read what you wrote here. This doesn’t set off any common sense alarms? Nothing? Do you think this a rational mental state?
Why do you think so many people are up in arms about the prices? It just doesn’t make sense. at all. From San Diego to Phoenix to Tucson to Las Vegas and beyond… people acted like they had lost their minds; prices never come down, buy now of be forever priced out. We are obviously still in the denial stage of grief.
Phx has 53,000 homes on the market we have 9,700. They have a lot of water and we don’t. They have more industry but a market the is more depressed than ours. They have highway systems we will never have, they have water, they have state government etc. So I don’t know the why but this is some of the what that makes us different.
My point here was that Phoenix is our best leading indicator of things to come. Yeah we are a giant city that acts like a tiny one horse village. It’s sad, but for you to think our housing market is contained and stabilizing is telling. We are not different. Your right in that every market is local, but they all follow the same basic economic rules. period.
July 8th, 2007 at 7:46 pm
Dave - keep in mind that if it bleeds it leads. the news media is trying to sell papers or televsion ads. We don’t have to worry about that so we can print the truth. Actual real numbers with no spin. Is this a great country or what?