Thanks to Tucson Doomer, who made me realize that we were past due to look at the housing market in Tucson. According to Paul Olsen, President of the Tucson Association of Realtors (TAR):
The November statistics are encouraging for the Tucson real estate market. We are seeing the beginning of
the normal winter holiday slowdown, however sales are still up. The market today is similar to early 2004
which, if you recall, was a record breaking year for Tucson real estate.The decline from last month in total sales volume is almost identical to the decline we saw last year from
October to November 2005. The numbers for total sales units follows this trend as well. Average sales price
has inched up from last month, a good sign for sellers.The median sale price has gone up $6,500 since last month but has decreased only 3.54% from this time
last year. This is good news for buyers.
Sales in Tucson appear less rosy to me. 982 properties sold in Tucson in November, the lowest number of homes to sell since 929 were posted in January of 2004. Listings have moderated from last month’s 9336 to 9238, however inventory is 66% higher than last year’s levels. There were 2,380 new homes listed in November- more than double the number of homes sold.
Sales vs. listings have been graphed since January 1997. I’d explain it but, well… take a look: [data from the TAR]
Tucson experienced a reasonably steady rate of growth until 2005, when sales went up and inventory went down. Builders then overcompensated to meet demand that diminished when the speculation declined. Here’s what has happened to appreciation:
As the number of properties has increased on the market, appreciation has dropped- a textbook bubble story.
Olson also said of the current market:
Buyers should know that the holiday season is a GREAT time to purchase, as business is generally slower and sellers are
growing tired of waiting in some cases. All in all, a great market.
"Great" isn’t exactly how I would describe it.
fantastic charts!
Awesome! I need to stew for a bit…
Great data! I recently received information from a sound realtor source that sliced the listing data between over $1m and under $1m, finding for Scottsdale over a 17 month supply at the higher prices (with listings up), and something like 7-9 months supply below a million. Looks to me like its increasingly those “millionaires” who are stuck trying to sell the old homestead. Is this consistent with what you are seeing elsewhere?
FYI, cooling in the housing market is now “substantial” according to the Fed., now being touted in MSM as only real change in statement.
Old Mike-
Absolutely. There are a couple of factors going here. One is that there are just fewer buyers in the upper range, but there are more sellers who think their house is going to make them a millionaire.
The other is the current psychology. When prices are rising, purchasing a million dollar home sounds like a better idea than when prices are going down. I’m seeing fewer $1 million + properties selling in the East Valley, and I’m wondering if concern about investing a lot of money in a depreciating asset has not become a concern.
Old Mike-
I’ve had Bloomberg on waiting for the Fed. I’ve heard some in the REIC say that the Fed is likely to cut rates soon, to stimulate a weakening economy. I noticed that the one dissenting vote was for a .25% increase, and they gave their usual concerns about inflation. If they are considering a cut at all, nothing hinted at it.
That dissent has been consistant since the increases stopped …perhaps he takes more seriously the statutory charge regarding inflation control than over-all economic concerns. Maybe he remembers the Carter years. Most of the appointed jobs at the Fed are very tough assignments granted to good, highly qualified people. I have not “priced in” a cut in any of my mental calculations for any time soon, but in my case it may just be wishful thinking. Regarding risk premiums, did you see the “spread” between ok and bad credit in one used automobile business discussed in the Az Republic today (9%-20%). Makes you wonder who calculated the tiny sub-prime mortgage risk premiums for the same consumers? Lots of just deserts just in time for the holidays.
[...] 5-4-06 Interest rates are still low. Housing prices have dropped. Inventory levels are up. This is turning into a buyers market here in the Tucson real estate market for Country Club homes, golf properties and retirement communities. Builders have more incentives for buyers and the summer months in Tucson are hot, which is the slowest time for real estate. [Not according to the TAR] [...]