Tucson New Construction IS NOT The Real Estate Market
Tucson Home Sellers are you selling a home or hot dogs?
Every week we see more and more headlines purporting the Tucson Real Estate Market is New Construction. I’m sorry for this myopic representation of Tucson Real Estate.
I guess once you buy your home in Tucson it isn’t real estate anymore. John Strobeck’s report is being used today from a phone interview concerning the Tucson Housing Market, but the future predictions of the “recovery” have to do with New Home starts and permits being pulled. The article even says fewer new home permits is good for the market.
Here are two examples from this past week.
Big developer foresees no quick end to slump in Tucson home sales
The slowdown in Tucson’s new-home market is far from over and may not turn around until 2010, a major local developer said at a conference Wednesday. …
Diamond said he expects the volume of new-home permits to fall to about 4,000 next year, down from a peak of nearly 12,000 during the boom years. …
“We’ve had a lot of corrections because of speculation in the market, and that’s not good,” Diamond said. “This time the builders are the speculators.”
Now does that title seem to indicate this is about Tucson New Construction? No! That wouldn’t seem nearly as dramatic.
Analyst: Housing slowdown to linger
A Tucson housing market analyst is projecting a much deeper, longer slowdown that earlier anticipated.
In his monthly Southern Arizona Housing Market Letter, analyst John Strobeck said it might not recover until 2010 if inventory levels remain high and the sales pace stays the same….
Strobeck said builders are cutting back sharply in response to the slowdown. The volume of new home permits in September dropped to 286, the lowest monthly number since January 1993, according to the market letter.
Much of this report while including data on the resale market is based on the slowing of New Construction. This is where the 2010 recovery date is focused not on the resale market.
Judy Lowe’s quotes in this article are a mixed bag with some good information and some based on half truths. First the good information and why it is actually better than it seems.
“Judy Lowe, president of the Tucson Association of Realtors Multiple Listing Service, noted that pending sales — those yet to close — were up more than 32 percent from the same month last year.
“That’s an indicator that our closings in six weeks to two months will also be ahead of the closings of the same month a year ago,” Lowe said. “To me, that shows the market is no longer in decline.”
Pending contracts have been up for the past four months, according to the Realtors’ report. However, the number of sales has still been lower than in the same months in 2006.”
The reason this is better than the 32% reported? In May of 2007 the Tucson MLS Reporting began only reporting Data on the Tucson Area and not every home in the Tucson MLS system. They are comparing last years numbers of ALL AREAS against this years number which are just the TUCSON AREAS. This is the positive side where the number are actually better than being reported.
“She also noted that the number of homes on the market has fallen about 1 percent from the same month in 2006. Last month, there were 9,190 homes on the market, according to the Realtors’ report.”
This is not true for the same reason. Her comparison is with all area listings vs Tucson area listings. When you compare apples to apples the number of active Tucson Listings last September were 8,881 to 9,190. This is not a drop!
I pointed out yesterday, when New Construction is flying high it is harder for the resale market to compete. When New Construction is down or slow there are more buyers looking at the resale market. It is important for Tucson Home Sellers in the resale market to know when to cheer. This is the time. It looks like you will have at least a year, maybe two to get buyer’s attention. Are you ready for them or are you selling hot dogs?
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Dave Smith | Tucson Real Estate News
Hi Dave - I’ve learned so much from all the blogs I read, which has led me to read news reports on the real estate market much more carefully, looking for the real news behind the report. It amazes me how the news is slanted, not differentiating between resale and new (at least not in the titles), and the panic its causing. What I’m interested to see is how the other houses in my neighborhood will fare between now and March (when we plan to list). They’re overpriced and don’t seem to mind continuing to wait for their buyers - though I don’t see any coming at those prices!
Hi Erin,
It is amazing how slanted the reporting of the real estate market is in the media. As you say especially in the headlines.
I would agree the homes in your neighborhood are overpriced. It will be interesting to see if they reduce their asking price in the coming months. This is often the case however, this is what I call “Riding the Market Down” I’ve seen a number of sellers end up taking less in the end having turned down offers earlier that were as much as $20,000 more than they finally sold for. All because they rode the market down instead of pricing to sell.