Market Conditions in Arizona>Question Details

Mr.P, Other/Just Looking in Arizona

Arizona Realtors what`s your opinion about this "New-home sales inch up in July" & RL Brown

Asked by Mr.P, Arizona Fri Aug 31, 2007

New-home sales inch up in July

The East Valley Tribune reports that sales of Valley new homes in July rose 4.7 percent from June with 3,128 new home sales, according to the latest Phoenix Housing Market Letter by analyst RL Brown. Overall, there were nearly 8,600 new and existing home sales in the Valley in July. That's not even close to the heights of 2005, but its "a huge amount of sales for housing in a month", Brown said. Today's market is similar to the early 2000's before the boom, and builders and sellers weren't complaining then, Brown said. "My gut feeling is that we have more rocks in the road," but the basic elements of a successful market still exists in the Valley-- good job and population growth," he said. Building permits were down in July with 2,560 permits pulled, compared with 3,490 in June and 3,601 in July 2006. The median price for a new Valley home stood at $257,000. Brown says that the existing home market continues to be the biggest hurdle facing builders.

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Hi Patrick, I'm not sure how much of this we can attribute to overall market bounce back because builders are in position to do whatever it takes to move product. I'm not surprised that new builds increased because of the outrageous incentives that are being thrown at buyers. Thousands towards closing costs and rate buy downs. Thousands towards upgrades. Price reductions. Reduced lot premiums. Etc, etc, etc. I think the news is positive, but I also think that the builders will find the bottom before the resale market due to this flexibility. As builders pull fewer permits, the supply will start coming back in line with demand, as well. The biggest hurdle that our market will continue to face are from resellers who absolutely must sell, but have zero flexibility. Already attempting to minimize loss or sell short, they have nowhere to go on price or concessions. Until these properties start moving, or being pulled off the market, it's going to be bumpy for sellers. It's good to see a positive report, however.
1 vote Thank Flag Link Fri Aug 31, 2007
I think we typically see a slight rise in sales when school gets out, so I wouldn't break out the champagne. I think a better indicator of the return to a normal market will be the reduction in active listings. I'll get excited when our inventory is cut in half. I don't think sales as much as inventory is the issue. There will always be people moving to our valley...it will be a better market when there's not so much to choose from!
Web Reference: http://www.amysellsaz.com
1 vote Thank Flag Link Fri Aug 31, 2007
I'm optimistic about the market down here in Tucson. More buyers are entering the market; sellers are realistic and motivated to sell. I believe the media hype is more targeted to selling their newspapers than reporting accurate data.

Was it Benjamin Franklin or Thomas Jefferson who wrote: " There are lies, more [sic] lies, and statistics". Statistics can be manipulated by all of us to achieve our personal agendas. I prefer to work hard and see the fruits of my labor: happy homeowners/buyers and home sellers.
1 vote Thank Flag Link Fri Aug 31, 2007
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