Arizona Home Prices Drop First Time in 16 Years
September 4, 2007
Post Tags: arizona-home-values , arizona_daily_star , The-Federal-Office-of-Housing-Enterprise-Oversight , Tucson-Home-Values , Tucson-MLS-Statistics
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Welcome back from the Labor Day Holiday. We hope everyone had a great weekend and will have a great first week in September.
Tucson was greeted last week with this nice headline for all of us to read and enjoy as we headed out of town for cooler locations over the Labor Day Weekend.
However, some of us were working this “Labor” Day weekend. We are laboring. Really, I know based on the news purported this past week, I’ll not stoop to calling it reported, you would think the Real Estate Business in Tucson and Arizona was so bad we “Wouldn’t even be coming into the office.” Ok I promise this is the last time I’ll use this quote.
In some sense of fairness I will admit most of these articles weren’t written by the “Arizona Daily Star” except for the one I won’t mention again.
(Pause here. . . there is so much about this article that needs commenting on it might get broken into several posts) . . . Here we go with our analysis filter in place.
Let’s start with the article itself so everyone can familiarize themselves with the content.
Arizona home prices drop for the first time in 16 years
Subtitle: good news for buyers, but cost are expected to inch up within a year
Every positive statement must be followed with an anti euphoria statement.
Source of Report: The Federal Office of Housing Enterprise Oversight
Please note this is not a local report it comes from a Federal Office. Need I say more.
Premise: Housing prices in Arizona officially waded into the red last quarter — the first time that has happened in 16 years.
Period of analysis: Second Quarter vs First Quarter
“New figures Thursday from the federal Office of Housing Enterprise Oversight show that home values in the state dropped nearly three-tenths of a percent in the second quarter of this year compared to the prior quarter. The last time the state dipped into negative numbers was in 1991.”
Basis of Data:
“The statistics reflect how much the values of existing homes have gone up — or down. The agency tracks average price changes in repeat sales and re-financing of the same single family properties, using statistics from mortgage transactions. ”
Any transaction with a CASH buyer will not be included in these figures.
Overall we are looking at a figure of less than 3/10 of 1%. To get another idea of what this is like. Can you tell what this images is? It shows about 3/10 of 1%
Guess what it is, then click on the image to see the whole picture.
Year over Year Figures:
“Even with the quarterly decline, Arizona did manage to post a 2.2 percent increase in home prices over the same period a year earlier. But here, too, the state lagged the average national increase of 3.2 percent.”
The Tucson First Quarter vs Second Quarter Figures
Here we only have our local Tucson MLS figures. In May there was a change in the basis for the reporting areas reducing the number of sales areas for May and June figures compared to January - March.
- First Quarter Average: $268,166
- Second Quarter Average: $286,019
- Difference Second Quarter Average: $17,853 +
These are Tucson Figures, Not Arizona Figures. We did better than the rest of the state.
In the paper it was reported the Tucson Second Quarter Numbers were 0.07 less than First quarter numbers we don’t know what they based the 0.07 figure on. If it is based on the federal report based on mortgage numbers which did not include cash transaction. This becomes a flawed number.
If it is based on the reporting of Sales from the Tucson MLS Statistic Reports it is flawed as well because the Tucson MLS started limiting their reporting areas for May and June of the second quarter. What I’ve reported above is Tucson Areas to Tucson Areas, apples to apples. The difference is an increase in the second quarter by $17,853.
Arizona Home Prices Drop First Time in 16 Years. That’s quite a drop. 3/10 of 1 percent, drop from first quarter to second quarter based on Mortgage figures.
I’ll address the Year over Year Figures tomorrow and show you how a 2.2 percent gain in Arizona is actually better than a 3.2 percent gain in the country. Here is a hint, it is all in the numbers, especially when they are percentages.
Finally, this statistics observation: “Did you know that if you fall down there is more than a 70% chance when you get up you will be wet”. The Reasoning.
