Tucson A Sea of Homes for Sale
August 30, 2007
Post Tags: arizona_daily_star , housing_slump , location_location_location , tucson_real_estate
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Big bold type “A Sea of Homes for Sale” It’s on the front page of the business section so it must be:
- True (get the lifeboats)
- Partially True (get the life preservers)
- On the front of the business section
- Not about Tucson real estate
- None of the above
- Some of the above
Circle all that apply.
In the business section of the “Arizona Daily Star” on Tuesday August 28, 2007 “A sea of homes for sale” subtitle: “Housing slump worst in 16 years; no end in sight”
I know you are all tired of the old saw Location, Location, Location. Especially when it isn’t the main saw in Real Estate right at the moment. Price, Price, Price is currently the sharpest saw in town. But I digress.
When I first started writing about these types of articles in the “Star” it was pointed out we have to look at where the article is from and where it is talking about. This is even more important than the title or subtitle. The location of the origin of this article is “WASHINGTON” which brings the quote to mind: “can any good thing come out of WASHINGTON?” We know the Sea of Homes is not specific to Tucson. Now isn’t that a relief. 
So we can put away:
- the life boats
- the life preservers
- and probably the water wings.
- ok you can hold onto the water wings
- that’s long enough now put them away.
The number of homes on the market have increased across the country for the most part and the median home price has come down. This has been a gradual decline in the national median price for 12 months. “A gradual decline in the median price nationally for 12 months” I”m quoting that again. Wasn’t the national real estate market inflated and overvalued. Haven’t there been cries for the past few years the housing market was over valued and prices needed to come down to more affordable levels.
That is exactly what this sounds like to me. Last month (July) the national median home price was $230,200 down 0.6 percent from a year ago. Doesn’t that sound like a soft landing. And it is in line with the statistic that Sellers are still getting 95% of their asking price.
In Tucson the Median priced home in July 2007 was $218,750 down from $225.000 in July of 06. I’m to tired right now to figure that % difference at the moment.
What about sales in the sea of homes. “By region of the country, sales rose by 1.8 percent in the West,” Let me see the last time I looked Tucson was East of San Diego, but still considered to be “in the West”
“Based on the July sales pace, it would take 9.2 months to exhaust the number of single-family homes on the market, the highest level in nearly 16 years. . .
The rising glut of unsold homes is putting downward pressure on prices. The median price of an existing home, the point where half of homes sold for more and half for less, has now fallen every month for a year, something that has not occurred before on Realtors’ records going back to 1969. Economists said to expect more price declines in coming months.”
The wording here gets tricky not because of what is said but what isn’t being said. Take that last bold phrase more price declines context tells us it is asking price declines not sale price declines but the average reader never makes this distinction. Everyone assumes a price decline is “Sale Price” not “Asking Price“.
Sale prices in Tucson on average have been on a steady increase each month of this year until July. Historically July sales figures have decreased in 3 out of the last 5 years. Pending contracts in July were up significantly over July of 06.
Based on Tucson’s July Sales we have 7 months inventory on hand for the Tucson area on average and some areas have as little as 4+ months of inventory.
SO WHAT IS THE POINT OF THIS ARTICLE?
The Devil is always in the details and the point of this article out of “WASHINGTON” is stated right here:
But he said he believed the country would be able to avoid an outright recession because the Federal Reserve will decide at its next meeting on Sept. 18 to cut the federal funds rate, the key benchmark rate for millions of consumer and business loans.
That’s right, the point of this article is not the “Sea of homes for sale” it is an attempt to pressure the Federal Reserve Board into cutting the federal funds rate.
Now to today’s quiz.
If you circled 3, 4 & 6 you get a gold star. 
Tomorrow we might have connect the dots. Be sure to bring a pencil and calculator.
There is still trouble in them there hills. From places just like this.
Remember:
“Bad credit has supplanted terrorism as the gravest immediate risk threatening the economy.”
August 31st, 2007 at 10:59 am
And it is in line with the statistic that Sellers are still getting 95% of their asking price.
Of which price, though…? I’d imagine of the last listing price after numerous haircuts.
August 31st, 2007 at 11:04 am
Concerned since over 30 % of the homes sell in less than 30 days and almost 60% in under 60 days, No, most of these homes selling at 95% of asking price may have had a price reduction, but usually not a drastic one.
August 31st, 2007 at 11:21 am
Even before I read your post, I was looking at the picture thinking — where is THAT? Is that grass on a street corner? What are those green things in the background? That’s not Tucson.
Could’ve saved myself a little time if I had just read the post and stopped staring at the picture…
August 31st, 2007 at 11:27 am
Kelley,
Yes the caption under the photo reads “Altadena, Calif.” WOW California, go figure
August 31st, 2007 at 12:21 pm
I’m still pretty skeptical, Dave, considering I just saw a few days ago people even in Phoenix discussing on an open message board substantial cash backs (yes, pure cash backs) without being concerned about the fact that in plain English this is called fraud, and apparently it’s not limited to CA and FL. And how could it be? AZ is proudly holding 7th place on this list. But what else is new, right. They were just laughing it off… people like cash… Sure, people like cash, but nobody likes inflated comps, do they?
Coincidentally, I’m just reading about the S&L bailout in the 80s. The explanation of how it was done eerily resembles today’s headlines. And the “savior” then created this mess shortly thereafter. It doesn’t take long for common folks to forget and participate again, does it - give or take 10-15 years. Of course, this country has the advantage of having a constant stream of foreigners who don’t know what truly happened even in the more recent past. I have to say in all honesty, though, that you can take a horse to the water, but you can’t make him drink. Can’t ignore totally the responsibility of the general public. Only because you were tempted to take something potentially disastrous for you doesn’t mean you HAVE to take it. Can’t tell whether greed or ignorance plays bigger role.
This time, though, I’m not sure if there’s enough blood left in the turnip to be extracted, particularly since it most likely hasn’t paid even for the previous one, which wasn’t that long ago, not to mention how many more lovely developments have happened since then. And if all turnips are squeezed to the max, it can’t be beneficial either to the housing market or to the economy as a whole because they’ll have no choice other than to default and stop buying toys. Looks to me this whole scam is coming to a head, even though it’s extremely dumb to kill the golden goose and the directors of this movie are certainly not dumb, unless it’s absolutely inevitable at this point… Yeah, I know your focus is not on the big picture.
Unfortunately, the big picture is always crashing down on our heads and yours is not exempt, I believe… I know, I know… there isn’t much we can do about it.:-(
September 1st, 2007 at 7:49 am
Dave - Good article. Proves that the newspaper is good for fertilizing the flowers.
Concerned, are you related to BJ? The words look the same, just a different name. Sure, its tough out there. Nobody is denying it. Serious buyers are buying, the post sitters are sitting. If the activity of the past few weeks is any indication, sales will continue to be solid.
Keep em coming Dave.
September 1st, 2007 at 10:22 pm
No, Doug, I’m not related to BJ and the reason I’m interested in the housing market at this point is strictly personal. As a matter of fact, my personal preference would be that you’re right.
BJ’s not the only one who reads, researches, thinks, tries to fit the pieces of the puzzle, etc. Granted, being/or pretending to be a happy ostrich is a whole lot more enjoyable. I’ll give you that. Obviously, I’m not a realtor as you are if I’m not mistaken, so I tell it as I see it without sugar-coating it. Since Dave doesn’t censor, sometimes I comment. Do you have a problem with it?