Housing Doom Housing Bubble Blog

Jay Butler’ of ASU’s Realty Studies has released his monthly report:

MESA, Ariz. — In an environment of heightened economic uncertainty and continuous financial issues, the local resale housing market remained anemic at 3,280 sales, in comparison to 3,610 recorded sales in October 2007 and last year’s 5,040 sales. While resale activity remains below historical trends, the fourth quarter of the year is traditionally one of the slowest. The month of November brought the year-to-date total to 47,690 sales, which is well below the 62,415 for 2006 year to date and 104,360 sales for 2005 year to date.

“Although there is a large inventory of available homes, buyers appear reluctant to take advantage of the market,” said Jay Q. Butler, director of Realty Studies at Arizona State University’s Morrison School of Management and Agribusiness. “The first issue is that most buyers have to be sellers, which is difficult in this market.”

While interest rates are low, higher underwriting guidelines for all loans and limited capital availability for non-conforming loans (above $417,000) have made it difficult for people to obtain the needed financing.

“In addition, many of the vacant homes are in submarkets that current buyers do not want, due to travel congestion, higher energy costs, lack of area amenities and uncertainty about the future appreciation in the area,” said Butler. “Thus, the 2007 resale housing market continues to show signs of increasing weaknesses that are well below the expectations of even a few months ago.” [Not weaker than we were expecting around here however.]

Much like the ever-increasing sales activity of the last few years, the rapid improvement in prices has disappeared. The median home price in November was $240,000 in comparison to $242,000 for September and last year’s $259,000. This is the lowest monthly median home price since $235,000 in May 2005, Last year, 38 percent of the resale homes sold for over $300,000, while it was 33 percent for November 2007.

This would be a 7.3% decline in the median, the largest year-over-year price decline since the housing market started to fizzle:

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It is with great reluctance I am announcing this, but I and my family have decided that we need to move to Austin, Texas.  This is a big change for the woman who’s always said that if Saguaro don’t grow there, she doesn’t either.  Circumstances change however, and sometimes I need to change with them.  At least Austin is one of my favorite cities.

Other than leaving Doom for the most part in Igor’s less than capable hands for the next few days, it should not affect the site.  Due to the wonders of the internet, I have actually posted in the past from  New York  to Virginia and from Idaho to California- "Have Laptop Will Travel." We still have our wonderful network of correspondents in the Valley who always manage to make me look good, and a lifetime’s worth of friends and family will keep me coming back to the Valley.

True to form, I have found a great rental in Austin.  Once we get the internet fired up, it should be business as usual around here.  In the meantime, we will especially appreciate your links, stories and comments to keep things going.  I’ll try and stop by often enough to rescue posters from Igor’s capricious clutches.

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