Tucson Record Number of Unsold Homes Flood the Market
May 8, 2007
Post Tags: houses-languishing-on-market , record-number-of-tucson-homes-on-market , Tucson-housing-market-flooded
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Tucson Real Estate Market Flooded?
The Headline of the “Arizona Daily Star” Sunday Paper May 6, 2007 read:
Record number of Unsold Homes Flood the Market
The story begins with a fade from black to this anecdotal sellers experience.
“Tempted by a generous price cut, Cynthia Saenz couldn’t resist buying a new house in Vail about eight months ago.
But after reaping benefits on the buyers’ side of the market, Saenz is languishing on the sellers’ side.
She put her Southeast Side house up for sale five months ago and has reduced the 1,800-square-foot home’s price from $230,000 to $200,000. Still, it hasn’t sold.
Saenz’s house is among a record number of properties on the market in the Tucson area.”
Lets take a look at this part of the story breaking down what we see in reality and the perception that is being put forth.
The Seller:
- Tempted by a generous price cut
- bought new home (New Construction)
- bought 8 months ago
- put on the market 5 months ago (Hum didn’t live there long)
- languishing on the market
Tempted to by in New Construction, but never lived in the home. Sounds like an investor which means she bought a house, but not a home.
To only own for three months and sell is not something anyone should try and do in a buyer’s market. (Tucson is a buyer’s market and has been for months)
Languishing on the Market
This is my favorite ditty. Five month, 5 months does seem like a long time to have a house on the market. Already had a price reduction from $230,000 to $200,000. Sounds like a loss of $30,000. But wait, we don’t know what she paid for it, only what she was asking. It is very possible that $200,000 will be a good return on her investment.
At the very bottom of this long article we have this little piece of information:
“Saenz, 33, the seller on the Southeast Side, said she isn’t too worried about the time it might take to find a buyer.
Her house in Vail is still under construction.”
THAT’S RIGHT THE HOUSE ISN’T EVEN BUILT YET!!!!!!!!!
Not the house, just new construction
This is a wonderful example of the Tucson housing market being flooded with unsold, and un-built homes.
I would like to see the MLS photos of this new house but it isn’t built yet.
The Seller hasn’t even closed on it yet. In essence she doesn’t really own it yet and is trying to sell it (does the word “flipping” come to mind?).
I want to state right here I have no issue with Cynthia Saenz the seller, she is doing fine. She constructed a very good deal and has time to wait for a buyer. Yes! Cynthia there is a buyer out there. Once the house is completed it will be easier for potential buyers to visualize.
The question is:
Why is the “Arizona Daily Star” using this case as an example of a “Record number of unsold homes flood the market”?
Sometimes we all forget the obvious,
“THEY ARE IN THE BUSINESS OF SELLING NEWSPAPERS”
Creating a perceived reality is always a better story than reality itself, or so it would seem.
Are there a record number of homes on the market? YES! (more then were reported in the story). And most of these homes are actually built.
Are these homes languishing on the market? For the most part NO! But some are and most of the one that are would languish in any normal market.
Last month we have figures for is March 2007, the average days on market for the entire market was 67 days.
Average Days on Market increased by just 2 days to 67 days or 7 weeks. This number includes the days it takes up to Close of Escrow which usually is 30 days with conventional financing and 45 for FHA. The percentage of homes sold in the first 30 days increased from 34.9% to 37.1% and in the first 60 days from 55.7% to 60.3% meaning just over 60% of the homes on the market were sold in 60 days.
It certainly looks to me as if Tucson homes are selling.
Can a Tucson home be sold in this market? Absolutely!
The Tucson Real Estate Market is a buyers market, there are a lot of homes to choose from, but are we flooded, not unless you count all the homes that aren’t built yet on all the vacant lots and partially constructed homes “languishing on the market” then you could say we are flooded. Fade to Black.
For further reading check out these posts:
2007 Tucson Real Estate Sell or Not to Sell
Tucson Home Sellers Price is Right or Jeopardy
Tucson Home Sellers Pricing for Maximum Exposure.
Is it a Game of Chicken or a Mexican Standoff?
May 8th, 2007 at 10:04 pm
Amen! I’ll have to go back and re-read that article. I interpreted that as the seller had bought a new construction home in Vail, and was selling a different home on the Southeast side. Wonder what the real story is, eh?
May 9th, 2007 at 7:20 am
Kelley,
I think that is what the paper wanted people to think or at least put the rest of it so far down no one would make the connection.
This is the kind of reporting that just melts your cookies. I’m being polite there because your a lady.
Unfortunately, perception has a way of becoming reality and I think the newspaper has done a huge dis-service to the real estate industry in Tucson over the past year in the way they report on Tucson Real Estate.
May 11th, 2007 at 1:10 pm
I agree with you. I have never fully trusted the newspaper. A professor once related the newspaper to horticulture since it is such a great fertilizer.
One point I do agree with, there are too many overpriced homes on the market.
May 11th, 2007 at 3:03 pm
Doug,
I would certainly agree with that last statment. There are too many overpriced homes on the market, and that is where I would put the word “languishing” and so they should.
I’ve been in so many homes in the last week that were obviously bought by speculators wanting to flip and when the market turned everything changes. Many of these homes are in disrepair, half renovated, filthy and did I mention filty.
The asking price is between 50 and 100,000 more than they should be for the condition of the house and the market. End result too many overpriced homes which will sit on the market inflating the perception the market is flooded.
May 11th, 2007 at 9:20 pm
OK, I get it. We shouldn’t be counting those homes that are overpriced, in disrepair, and in poor condition (in your opinion) as contributing to the flood of homes on the market- Because ‘normally’ the vast majority of homes that are listed for sale are priced Just Right, in good repair, nicely maintained and really well presented. Let’s also cross off the homes owned by speculators, the homes that were bought with shaky mortgages, the homes listed for sale where the owner got poor advice from novice or avaricious real estate agents, or from Zillow’s auto valuations, or, blah, blah … and gosh, before you know it, it’s not the market, it’s them
May 11th, 2007 at 10:30 pm
John,
Actually I agree with you. There is a glut of homes on the market right now in dis-repair, in poor condition contributing to the flood.
Had the Arizona Daily Star taken the approach to the issue that we have two big issues that are effecting the houses currently on the market.
1. speculators that bought overpriced homes thinking they could put down some new carpet and flip the house for a profit.
2. subprime borrowers that got a loan but didn’t change their finacial habits so they could pay for the loan which is why they had to go subprime in the first place.
Those are valid points to consider and discuss in our market.
But to take as their example a home that isn’t even built yet, and call this home that isn’t completed “languishing on the market” that was the issue of the post, not the condition of the market.
I’m working on a couple of posts right now that go into more detail.
I agree with you, my issue was creating a perception that homes are languishing on the market and making it sound like no one is selling or buying real estate in Tucson. Picking a home that isn’t even completed as their prime example I consider journalism designed to sell papers and not give a true picture of the market.
This post has two points to it.
1. The Star tried to create a perception using an un-built home as an example of homes languishing on the market.
2. There are homes on the market that when priced right and in good repair not competing with new construction are selling and the sellers are not loosing money in the process.
That’s the point of this post.
Are there more homes on the market than should be, absolutely. And I’m working right now on posts to address these issues as described in the two points made above on speculators and subprime borrowers.
I do believe there are too many homes on the market, just not for the same reasons and certainly not every home on the market is languishing there.
May 12th, 2007 at 9:53 pm
I didn’t hear any complaining as the price of homes in the Tucson Metro area climbed to dizzy heights… did I? Not a peep. Geez.
September 24th, 2008 at 8:42 am
[...] inventories through 06 and 07 was one of the real issues we had creating headlines like “Homes Languishing on the Market” Even homes that weren’t built yet and were for sale were having a hard time being [...]
October 29th, 2008 at 6:10 am
[...] Looking back lead to a lot of homes sitting on the market which were priced way beyond what the market could or would bear. Asking prices had continued to escalate in 2005 and when the speculators left the market it was easy to see in the figures that asking prices kept increasing while sale prices were declining. Some sellers were getting the message and the memo. Those that did often saw their property sold in 30 days or less. The end result for those that didn’t, an increase in listing inventory referred in the media as a Flooding of the Tucson Housing Market with homes “Languishing on the Market“. [...]