Tucson Real Estate Affordability
October 27, 2008
Post Tags: affordability , day traders , economic theory , Tucson Real Estate
Affordability is Key to the future of the Tucson Real Estate Market
Affordability is the key to the turn around in the Tucson Housing Market. It is the key to turning around the real estate markets in the entire country.
Property values shot up to high and very fast. For the past 4 years affordability had little to do with buying or selling a house in Tucson.
In Tucson during 2005 we saw real estate transactions being done so fast you would have thought the Tucson real estate market had gone to the day traders.
We are seeing an increase in the number of closed transactions and a decrease in average and median sales price. Some who don’t understand how these two things work together in a positive way for affordability applaud the increase in number of sales but don’t see the connection between those increases and the decline in sales prices.
The missing piece in this equation has been affordability, which as noted above hasn’t been in the formula for buying Tucson Real Estate almost since the turn of the century.
Now affordability is what is driving the market. Yes there is an economic downturn, but everyone agrees on this: The downturn started in real estate and the recovery will begin there as well. While the stock market has continued to show growth till recently with October 2007 being the high point, the real estate markets across the country have been in a downturn and decline since late 2005.
A Short Trip Down Memory Lane
Much of this week will dedicated to a discussion of the Tucson Real Estate Market since 2005. I’ll be covering “The Frantic Market” of 2005, The “Sellers didn’t get the memo” of 2006, The “Fog a Spoon Get a Loan Party is Over” of 2007. And 2008’s realization in the entire economy what real estate has known for almost three years. Prices had to decline, loans had to be made on ability to pay for them and real estate had to return to a state of Affordability as a home and not a speculative Gamble based on false economic theory that real estate always goes up in value.
It should be an interesting week and your comments and observations are welcome.
