Is anyone but me sick of the all the media and nay sayers stomping on the housing market? Every person i meet asks the same thing, "whats going on with this market?" I practically have to pull some clients in from the window ledge at times because they let themselves get all worked up for nothing by some negative story teller or the bad information they over heard. Well lets look at the facts, The housing market, has three tells. The first is builder starts, that is the number of houses builders get permits for and how fast they build them. The second is the number of homes that are selling or the volume of inventory that actually sells. The third is the prices that homes are selling for, are they down or are they up, or are they holding steady?
Builder starts are down about 18% for 2007. Big Deal? To me no. We had at one time 160+ homes a day under construction in Maricopa county that flooded us with new inventory and since then, the builders have adjusted prices, are offering massive incentives to buy; i.e pools, trips down payment money, buying your unsold property and a slew of other tantalizing solutions.
The number of homes that are selling is down only 15 percent. We have around five thousand homes a month give or take a few hundred, that sell every month, not bad given our home values went up almost 60 percent three years ago and the volume of homes selling is only down by less than half.
The final tell is what price homes are selling for, that is the only number that has continued to do well overall. For example in 2002 the average sales price was around $155,000, 2004 & 2005 around $188,000, in 2006 we hit $255,000, for 2007 the number started at $ 242,000 and has leveled off as of June at $255,000. What does that mean? Prices are holding people. Last month we had over 8000 California drivers licenses surrendered alone, that means we have 15 to 35,000 people a month by my estimation, moving to Arizona. Jobs are continuing to be created and the ones who fill those jobs and relocate here are going to buy something that suits them, no matter what the price.