Tucson MLS Statistics for September 2007
October 15, 2007
Post Tags: Tucson-Housing-Market-September-2007 , Tucson-Real-Estate-September-2007
If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
We finally have the Tucson MLS Statistics for September 2007. The rest of the country seems to be able to get their stats to the public by the end of the first week of the following month. But the Tucson MLS statistics always take longer to be released.
The buck should stop at the president’s desk as we ask; “What makes it so difficult for a relatively small real estate market as Tucson to release the previous months statistics in a timely manner?”
You will notice on the last page of the September report shows the statistics were actually generated on October 4, 2007. Where has this report been sitting for the past 11 days waiting for release?
Moving on:
Tucson MLS Statistics August 07 - September 07 Summary
| Category |
Aug |
Sept |
Diff. |
| Avg. Sale Price | $273,932 | $279,025 | + $5,093 |
| Total Units Sold | 1019 | 683 | -336 |
| Median Sale Price | $220,000 | $215,000 | - $5,000 |
| Avg. Days on Market | 69 | 73 | + 4 |
| Pending Contracts | 1019 | 989 | - 30 |
| Active Listings | 8,954 | 9,190 | + 236 |
| New Listings | 2,337 | 2,497 | + 160 |
August Mortgage Meltdown Effects September Number
There is no one that disputes the turmoil created in the Tucson Real Estate market with the sudden closure of First Magnus and the national disintegration in the Mortgage industry of Sub-prime and ALT-A loans and the companies funding those loans.
The effect was a pendulum swing well past center to lots of new restrictions and some lenders looking for any excuse not to fund a loan while they waited to see what the near future would bring.
Even more closings were delayed in September than in August since most of the August loans were already headed to the closing table during the meltdown during the later part of the month.
Analysis of the September MLS Statistics
We have been saying for months the Number of Sales have been declining, but the Sales Prices have actually been increasing. This trend continues to hold true for September in both Month over Month and Year over Year figures.
Average Sale Price
The average sale price in September 2007 was $279,025 an increase of $5,093 over August and an increase of $25,244 over September 2006. This is not due to a few million dollar plus homes skewing the figures, there were more million dollar + sales for more in Sept. 2006 than 2007 and the number is still $25,244 higher this year.
Total Units Sold
Yes, here the market took a seasonal hit and a mortgage funding major hit. There were only 683 closing recorded in September 2007 the lowest number of closings for a month since January 2000. Here is the point that is being lost on some buyers. There are fewer sales, but seller’s are willing to wait. Of course there are exceptions to this, but the facts are; even with high inventory, and lower number of total unit sales, the average sale price has increased. Sellers are waiting till they get their price. Sellers are getting on average 95% of their asking price. Buyers don’t seem to be getting or understanding this phenomena they keep thinking with high inventory and reduced numbers of sales the prices will be coming down. The media continues to fuel this perception, but so far that hasn’t happened. If a buyer has been waiting since last year for prices to come down. . . will they are up over $25K on average since last Sept.
Median Sale Price
Staying pretty close to where it has been all year. September saw a dip from August of $5,000 to $215,000 but up $5,000 from September 2006 when it was $210,000. Same situation. the Median sale price is up over last year, NOT DOWN.
Pending Contracts
Pending contracts are down from August 2007 by 30, not significant from 1019 to 989. What is significant is the pending contracts for September 2006 was only 747 and this year 989 which is 242 more pending contract this year than last. Now considering the Mortgage crisis and the tightening of credit with fewer people able to get loans and this is a significant increase.
Active Listings/New Listings
Hand in hand with few closed transactions is an increase in the number of active and new listings. While not a giant leap upward it is still higher than last month with Active Listings at 9,190 and New Listings at 2,497 an increase of 160 over last month. Active Listings are up over last year by 309 but New Listings actually dropped by 284 over September 2006.
Here is the table for year over year figures and comparisons:
Tucson MLS Statistics Sept 06 - Sept 07 Summary
| Category |
Sept |
Sept |
Diff. |
| Avg. Sale Price | $253,781 | $279,025 | + $25,244 |
| Total Units Sold | 1,040 | 683 | - 357 |
| Median Sale Price | $210,000 | $215,000 | + $5,000 |
| Avg. Days on Market | 50 | 73 | + 23 |
| Pending Contracts | 747 | 989 | + 242 |
| Active Listings | 8,881 | 9,190 | + 309 |
| New Listings | 2,781 | 2,497 | - 284 |
The Total units sold was less than anticipated but explained somewhat by the Mortgage industry situation. The rest of the numbers and indicators show slow sales, but healthy increases. And with all that is going on in the Tucson Real Estate Market, more than half the homes on the market are sold in less than 60 days.
The entire September 2007 Tucson MLS Statistics report can be found in the sidebar under “Documents” for those that want to see the entire report themselves.
October 15th, 2007 at 9:10 pm
Hi Dave!
What exactly is the ‘median’?
The average is a horrible indicator. Especially if you have one or two areas (AKA the Northwest and North) selling homes that are significantly higher than the rest of the market.
Median is almost equally bad, better than average… but certainly not a tenth of the whole story. I prefer to use price per sqft. by zipcode instead of average and median… and that number has been steadily dropping. I think Strobeck likes it too, and Don Diamond and Jim Click… etc.
October 16th, 2007 at 7:38 am
Yes, you are entirely correct that sellers have been holding out for boom-era prices. However, that point is not being lost on buyers at all. Buyers know that sellers will become increasingly desperate to sell as they need to move, run into financial difficulties, etc. Also, many buyers are stuck because they are also sellers and are not able to buy a home until they sell their last home. Additionally, many buyers can no longer qualify to buy a home at the prices sellers want.
Eventually, prices have to slide. It’s Econ 101. You can already see it being played out in places like Rancho Del Lago, where the builder is undercutting existing home resale by pricing their new homes for tens of thousands of dollars less. Existing home sellers are gradually beginning to lower their prices in order to compete.
Overall, prices are going to fall, and a lot. It’s the only way to clear out such a massive glut of homes.
October 16th, 2007 at 8:04 am
bobby joe,
the median as used in the Tucson MLS is the middle of all the residential property sold. So the total volume divided by the number of solds equals the median.
In the report itself there is a pie chart that breaks down the median by type as well. Condo, Townhome, SFR etc.
Price Per Square Foot is almost always what is used to determine a buyers offer and should be used in pricing a home for the market as well.
The only thing to take into consideration is the sliding value of price per square foot. The more square feet, the lower the price per square foot.
October 16th, 2007 at 8:23 am
Dave - Good analysis. I tend to believe the averages and medians when the numbers are close to one another. The problem I have seen with price per square foot (psf) is that smaller homes tend to sell for higher psf than larger homes. One communities psf is different from the one a mile down the road even if in the same zip code. So statistics would have to be broken down accordingly. If dealing with a single buyer or seller, time well spent. Be happy you are in the Northwest where sales are stronger. Keep em coming Dave.
October 16th, 2007 at 1:53 pm
Hi Dave!
Did you read the article? A median is a median and an average is an average. They are NOT good indicators of a market.
Price per sqft. Isn’t even that good of an indicator… as Doug pointed out. It is better than median and average but by itself is prone to err.
The absolute best measurement is Price to Rent Ratio. Ask yourself: What would it cost to rent the “same house” in the “same neighborhood”? If the price to rent is lower than the price to buy it is not a good time to BUY and the house is overpriced. Simple, beautiful.
Thank you Chris, basic economics… simple as that.
October 16th, 2007 at 1:56 pm
To see what homes are renting for check craigslist… a 30% drop in prices is what the current Price to rent ratio is. Wait another three months and that will probably be 38%.
October 16th, 2007 at 4:28 pm
bobby joe,
I didn’t read the article, not enough time today. No one in Real Estate is using Rent Ratio’s for anything, so it might be nice in Econ Theory, It isn’t used in the real world.
Price per square foot is the rule and it is applied in small local neighborhoods, not cities or subdivisions.
You can talk theory all you want, but the market is what it is, and it isn’t dropping because sellers aren’t selling for lower prices on that scale. They simply take the house off the market or let it ride.
October 16th, 2007 at 5:09 pm
Dave Said: “No one in Real Estate is using Rent Ratio’s for anything, so it might be nice in Econ Theory, It isn’t used in the real world.”
LOL, Really? Maybe that’s why sales are so low, and the prices keep going up. We have a market that defies basic economic principles.
The price-rent ratio is the average cost of ownership divided by the received rent income (if buying to let) or the estimated rent that would be paid if renting (if buying to reside).
Dave, so what your saying is;
1. Supply and demand have no effect on prices.
2. Don’t pay attention to the rent prices!
3. Don’t rent the equivalent house in the equivalent neighborhood even if it’s less than half of the monthly cost of owning.
4. Major Homebuilders giving unheard of incentives and price cuts is a sign of a strong market for the traditionally laggard resale market.
October 16th, 2007 at 5:21 pm
bobbie joe,
what I’m saying is you just don’t get it. And probably never will. You refuse to deal the real world, and is probably why you never have bought a home.
There is a lot that goes into this dynamic of ownership vs renting. A lot in the tax code provides breaks for ownership that renters never see. It is a lot more complicated than it seems, and once on the own side of the fence there are lots of incentives to stay there.
I’m not sure what dark place you keep pulling this stuff out of, but it is obvious you are stuck somewhere between your theories and reality.
As I’ve stated on numerous occasions, I’m not into theorizing, or econ, or predicting the market. I report what it is. And given what it is do the best possible to provide home buyers and sellers the information to navigate the real world Tucson Real Estate Market. Theory be . . .
October 16th, 2007 at 7:02 pm
Dave -
What don’t I get? I’m sitting pretty right now. As long as Helicopter Ben Bernake doesn’t debase my Savings account any further, I’m living with $6K of secured debt. That’s it.
Of course that is why I haven’t bought a home… I don’t understand how the housing market works. I know… I should have bought that ARM on a $300K house when I only make $45K a year! Why didn’t I do that? Oh yeah, I can’t afford that. I really can’t afford $230K making $45K a year. How do all these walmart/ “service” workers own homes?
I’m not pulling my stuff from anywhere. What makes you think that you have more information that I? How do you know that I haven’t bought the reports from John Strobeck? After all, what’s $216 for the best information before you make one of the biggest financial decisions of your life?
The numbers you quote are wrong. They have been for a long time… read it in the Orange Reports.
October 16th, 2007 at 7:27 pm
bobby joe,
First the numbers are not wrong. They are the numbers out of the Tucson MLS, that is all they are and that is all they have ever been reported to be.
Second, John Strobeck reports on lots more data than the Tucson MLS records.
Third, if you are making 45k a year, and have no savings and 6k of secured debt. You will never be able to afford a home in Tucson.
You will really need to put away some savings to have a 20% down payment and enough cash besides to pay for closing costs.
All the reports in the world and the lowering of the housing prices by 50% won’t make any difference if you don’t have the down payment and the funds to cover closing costs.
I have more information than you do because it is my life. I work in the Tucson Real Estate Market. We work with real live buyers and sellers every day. This is the information I have, not some orange or green or red report or some statistical report skewed to represent a particular bias.
We are helping people that are buying homes to live in. We are helping people that have saved and invested and have the money to buy homes in Tucson because they are more affordable and a better investment for “them” than where they currently live. This is the difference. For you it is theory, for us it is day to day helping people who either have to buy or sell or want to buy or sell and we help guide them through the process.
October 16th, 2007 at 8:22 pm
I beginning to think you don’t know what I’m talking about, when I write using economic terms and phrases. Is that true?
“As long as Helicopter Ben Bernake doesn’t debase my Savings account any further.” This is referring to the debasement of our currency by the FED Chairman Ben Bernake. It’s precipitous slide in value as compared to other currencies in recent months. Google: Dollar Slide
I have savings… I have around 10K in a CD @ 5.34% that matures every 6 months… Plus another couple $K in savings. I carry the debt for my credit score. I’m also eligible for a VA loan.
You don’t pay attention to what’s going on outside of Tucson do you? Things that ultimately affect your life… you don’t really care, eh? You should stop and look at the macro (which means Big) picture once in while. It will sharpen your thoughts on the micro scale.
How many Real Estate Agents are there in Tucson? 683 sales are awful thin for the entire area, no?
October 16th, 2007 at 9:52 pm
bobby joe,
I understand everything you are talking about. It just doesn’t have any bearing on what we do or what I write.
I pay attention, but that’s not the point, We aren’t in the business of running the country, we are in the business of helping people buy and sell Tucson Real Estate.
Someone else is in charge of running the country.
683 sales for September was thin. YES. But in light of the mortgage industry and their ties to the market, it is understandable. Now we all wait and see what October’s number bring.
I’m sorry bobby joe, but your arguments are water thin. Arm chair the economy all you want.
For all the impact it has on the economy you might as well play monopoly.
I wish you the best in the future and hope at some point you can purchase a home, if not in Tucson somewhere in this country you will enjoy living.
I don’t have the will or the energy for debate. I have always tied to openly and honestly answer your questions. It is apparent you have your opinions and views and facts and reality will not change them. You are entitled to them. You should probably start a site of your own. You have access to a lot of data and it is apparent you are articulate like to write. I think you would like blogging about real estate and the economy. There is always room for one more in the blogosphere.
October 17th, 2007 at 9:50 am
Hi Dave -
Just answer this one question…
How does a huge supply of homes not translate into lower prices?
October 17th, 2007 at 4:20 pm
bobby joe,
It doesn’t translate into lower prices when seller aren’t willing to accept lower prices.
October 21st, 2007 at 12:36 am
Can anyone provide the legend for Tucsons MLS Statistics report? I am trying to breakout the statistics for Sahuarita area, green valley, ect. The report does not provide the area info other than N, S, NE, SE, S ect…. It would be very helpful to know which area’s these cover.
Thanks
October 21st, 2007 at 7:58 am
Kimberlee,
Those areas would be XSW and XS in the report. There is a lot of territory in those areas so it will be a generalization at best. The legend is at : http://www.tucsonrealtors.org/documents/areaboundaries.pdf
I’ll start putting a link to a larger legend map on these reports.
October 22nd, 2007 at 6:48 pm
Looks like the market isn’t that bad. In most areas there has been declines in home prices.
October 23rd, 2007 at 8:43 pm
What’s up with the absorption rates this month, Dave?:-) The housechick did a graph, but I like yours better. And I don’t even annoy you anymore
- pretty please!;-)
October 23rd, 2007 at 9:32 pm
Concerned,
I’ve been too busy selling real estate this past week. I really hope to get them out tomorrow. : )
Glad you like mine.