Analyst RL Brown is reporting in his latest Phoenix Housing Market Letter that sales of new homes in the Phoenix area are 40% below where they were in July 2007.
I haven’t verified Brown’s numbers, but he’s a well regarded local housing economist and analyst, and has been accurate in the past. And I drive by, around and through multiple new-home subdivisions on a daily basis where it is abundantly clear that sales are off.
If you are so inclined, you can purchase a six-month subscription to his Sales and Permit Report for $1,050. I think I’ll pass.
According to the East Valley Tribune’s account of the report, Brown also reports that new housing permits are off as well, from 2,560 in July 2007 to 1,493 in July 2008.
Existing home sales however, were up nearly 17% from 5,072 to 5,928. This factoid, of course, gets buried in the main-stream media reports. As Brown states, “If you think about the marketplace, it’s a long way from where we were in 1989-1991 in the savings-and-loan crisis. If we compare it to overall historical activity in Phoenix, this is still not a bad housing market.
Now isn’t the best time to sell. There are however, clearly buying opportunities available.
That doesn’t mean it’s all sunshine and roses. Far from it.
I am inclined to agree with Brown when he says, “If you’re a seller, this is not the time to sell. If you have to sell … then be realistic about the price of your property and your property will sell.” He nails it again with this: “The key thing that we need to understand is that this housing market is not going to change dramatically in the near term and be much different than it is now.”
“Realistic” is the key word there, and it is very difficult for many home sellers to come to terms with reality. That is understandable as it is hard to separate emotion from fact. Selling your home is a very emotional experience, but it is critical to look at it as the business transaction that it is. I realize and understand that it is hard to get past the, “but if I sold it two years ago. . .” thoughts and feelings. Get past it you must. This is not the market of two years ago. Homes can be (and are) sold every single day. They need to be in pristine condition, and priced and marketed appropriately. If you need to sell, it can certainly be done.
There are signs of life in the Phoenix real estate market, but the road to recovery may be long and winding.