So, let’s talk about this tremendous weather we’re having …No?
As my fellow agents probably will understand, I’m the lone blogger in my office. That I even write this blog is akin to witchcraft in the minds of many of my peers. What often is lost is the amount of information conveyed not just on this blog but across the best of the real estate blogs (not to be confused with those blogs Realtor.Com is churning out without purpose or thought.)
For instance, my branch manager passed out the sales statistics for September. As the silence deepened I offered everyone a swig of vodka from the bottle on my desk. For the majority of those there, the depth of the current slowdown seemed like quite a shock.
But if you’re reading this blog and looking at the absorption rate figures every week, there is nothing overly surprising in the September sales figures.
Sales remain slow – 2,343 single-family detached homes in Maricopa County over the past 30 days. Inventory remains high – just shy of 41,000 single-family detached homes, for the moment at least putting the lie to the notion of declining fall inventory figures.
Some will argue affordability is the primary issue but that’s less of an issue with each passing day, especially in certain communities – Buckeye, Surprise, El Mirage, Avondale and Queen Creek among others. Availability of financing also is less of an issue than it has been. The builders’ continued building and hyper-aggressive pricing isn’t helping the resale market but it’s not the cause of the decline.
Then what is it? Fear.
I’ve heard it expressed by many would-be buyers over the past several weeks, that they are expecting the Phoenix market to continue to decline. One speculated on a 50-percent drop on top of what we’ve already experienced (while I can’t predict the future, this one seems completely out of whack.)
People are worrying about the short-term return on what for many is going to be a long-term investment, a phenomenon that is both understandable and illogical.
Case in point … one buyer explained to me today that they had friends in California who bought a house at $450,000 only to watch the value fall to $250,000. Out of desperation they sold the home back to the original owner, writing off the bad decision once and for all.
What’s the postscript? The California took off running within a couple of months of their sale. With a little more time, they’d be sitting on a considerable profit even taking into account the recent decline.
Buying a house to occupy, barring circumstances such as an impending job transfer, should be for the long term for the vast majority of people. This isn’t to say every house on the market is a perfect fit for everyone. And this isn’t to say that everyone should own a home. But often a little perspective is all that’s needed to keep unsubstantiated fear at bay.
Below are the absorption rate numbers for the Phoenix real estate market. As always, click on any of the markers to see the details for a given city or town. And also as always, all data is provided by the Arizona Regional MLS and is deemed reliable but not guaranteed.
[tags]Phoenix real estate, real estate sales, absorption rate[/tags]