On Sunday Catherine Reagor wrote an article for the Arizona Republic entitled Experts Weigh In on Market in Phoenix. L, who graciously contributes his insight and experience with us, weighs in on the comments of the experts. Here’s his analysis: (L’s remarks are in blue.)
The housing market’s wild ride during the past few years has caught the attention of a lot more "watchers," or analysts.
The number of local and national real estate gurus tracking the Valley’s housing market has grown with the amount of money made and lost in the industry recently.
Here’s a sampling of some of the pundits’ opinions and research:
• The number of Valley homes for sale, or listings, has dropped to its lowest level since the end of August. There were 53,509 listings on Nov. 1. That figure breaks down to 12 homes for every home buyer in the market now, according to research from Jay Haugen of Re/Max Anasazi Realty. At the end of September, the number of homes for sale was hovering near an all-time high of about 55,300.
Now here’s an act of desperation. He’s telling us that a decrease of 1791 listings is a signal the market is getting better. You would expect the MLS to fluctuate by that number of properties every few days. I’d also like to know where he gets the numbers of how many buyers are out there- that’s less than 4500 buyers in the market now.
Things seem to be picking up a bit in November. Here’s some numbers from the previous five days, as of Nov. 5. The number of active listings increased by 117 from Nov. 1 thru Nov. 5 2006. Usually around the start of the holiday season the number of listings drops. Many people don’t want their homes on the market during the holidays. However, I’m not seeing signs of a drop off happening so far this year. Below shows how the MLS can fluctuate over just 5 days – any small change is not worth getting too excited about.
|Back on Market||377|
|Temporarily Off Market||193|
• Pinal County has been the hot spot for home-building in the Valley this year. Through September, 13,000 houses were started in the southeastern Valley suburb, according to Metrostudy. But resales in Pinal fell to 850 during the third quarter, according to the Arizona Real Estate Center at Arizona State University’s Polytechnic. More than 1,100 existing homes changed hands in the area during both the first and second quarters of 2006.
This had better be a hot spot for selling, because if you do the math, there’s a big problem. 2,200 homes in the first 6 months of the year. If it stays on that track, they will sell 4,400 homes this year. That begs the question- what are they going to do with the other 8,600 of the 13,000 they are building…………….Someone needs to call analyst RL Brown (more on Mr. Brown coming up).
• More than 4,500 new homes, complete or nearly finished, sit unsold in Valley subdivisions, Belfiore Real Estate Consulting says.
According to the MLS, there were 5415 new homes listed in the MLS (11/5/06)
According to Ultimate New homes, there were 4573 models and 4724 specs found for a total of 9297 new homes available
Not all builders use these services however. From talking to various subcontractors I know, my estimate is around 25,000 new homes available- and they are building more everyday….!!!
• Demand for unreasonably priced homes or homes far from jobs is "abysmal" now. That’s what national real estate analyst John Burns writes in his recent newsletter. "This is particularly evident in markets like Phoenix and Washington, D.C., where the economies are booming, yet net prices are down 15 percent or more in the outlying areas," he wrote.
Its a bad spin when you just can’t just say, "People are no longer going to drive great distances to save a few dollars on a house, then spend it on gas, wear and tear , while driving 3 hours each way to work …!"
• Metro Phoenix has a 35 percent chance of falling home prices, according to PMI’s U.S. Market Risk Index. But 24 other areas, including Las Vegas and San Diego, have a greater chance that their prices will drop.
Metro Phoenix has a much greater chance of falling home prices than that. The MLS listed 2608 price changes in the last five days.
• Well-known Arizona housing analyst RL Brown still has a "code red" on his monthly report and says, "The end (of the housing market’s slowdown) is not yet in sight, and the market is still seeking the bottom."
If you look back in the Republic archives, I believe it was last November when RL Brown reported the first "code red" and stated he thought it would be over in a short time. I think he’s starting to analyze statistics on how many construction workers are going to be applying for unemployment in the future – it sure looks like the slowdown could go on for a while yet.
The experts are starting to admit there’s a problem- it’s just a bigger problem than they would have us know.