I applaud your diligence and willingness to share. I wish you the best of luck in this market. Realtors (r) that have a solid reputation and actually add value will certainly sell homes in this market… you are probably one of them. The problem is there are so many Realtors (r) that don’t add value.

That said… I agree that time will be the judge of all of this. The sooner the NAR and sellers grasp reality and drastically reduce the price of these stucco boxes… the sooner we can get the housing market back on track. That is, if we can get the NAR and seller this message before the entire economy implodes.

There are a lot of really smart people warning of a severe disconnect in our economy right now. I don’t think these people should be labeled as wack-o’s, crazy’s, bears, pessimists, doomer’s, or whatever. They look at data with little emotion just as the Bull’s, optimists and others do. One should look at both sides of the coin before making a rational argument in one direction or another.

Logic prevails. Every-time.

All I can go by at this time is we are still selling real estate in Tucson.

As I said here:

Foreclosure and the Subprime Buyers Comment

The only thing the Tucson housing market had going for itself was interest rates. The credit contraction is well under way all over the country. The consumers had to tap out at some point.

Consider these Factors:

1. Home prices are still absurdly high across the valley

2. No more easy money from Sub-prime sector ( Just google: ’subprime’)

3. Credit card Debt soared 9.2% last month (http://www.reuters.com/article/ousiv/idUSN0738048720070507)

4. Current Inventory shows approx. 5,800 MORE homes than the high historical mean of approx. 4,500

5. California buyers and retiree’s (the magic panacea) can’t sell their home to move here because their market is in the doldrums as well.

The interest rate is the keystone to this whole mess, and its going to go even higher. So now we have a high cost of entry to the housing market (prices) COUPLED with a long term debt burden in the form of interest. If you were a buyer what would you do? Something has to give…

The California buyers and retirees that you believe will buy up our inventory can’t move here. Their markets are getting creamed with double digit losses. Furthermore, if they have a HELOC of any kind or they bought in the last two years… they are trapped because the comps will not come in for what they owe. You can’t refi or sell a house that is worth less than you owe… unless you are willing to take a HUGE loss.

All real estate is local and to think a panacea from another state is coming on a white horse is a fairy tale that doesn’t end; happily ever after. We need a local base that is able to afford the local mean value. If we don’t… our market is non-functioning and sick. Econ 101.

Take a close look at the graph I posted in the other comment. This ride has just finished ticking its way to the top of the big bump. Now we get to feel the wind in our hair as it catapults downward rapidly. I’ve been right thus far…