When it really gets to be interesting is when those events lead to false conclusions. Adding to the false conclusions is when judgements are then made based on those false conclusions where were based on faulty analysis of the data.

Tully’s coffee at the Fry’s grocery store at Lambert and La Canada is a great place to start your day. This story is not meant to reflect poorly on this establishment or the employees in anyway. The events described were out of their control and I must say them certainly made the best of the situation. I would recommend stopping in for a cup of coffee and a snack anytime. And if you need a place for a WIFI connection to check in it is provided FREE at Tully’s.

What does this have to do with Oro Valley Real Estate Home Sales?

Last week I stopped in to get a large cup of coffee to go. Tully’s was out of lids for the cups. I thought this a little strange and someone must have forgotten to order lids. Nope there weren’t any lids anywhere, even the warehouse in another state where all the stores get their lids was out of lids. So I couldn’t get a cup of coffee and risk spilling it all over the place.

Monday morning I was back for breakfast of a banana, cinnamon & raisin bagel and a cup of coffee as I walked in the door they were opening the box of lids that had just arrived. When I went to order my large coffee they were out of large cups.

Apparently without lids there had been a run on large cups and not filling them all the way up most could get by without a lid. But now there were no large cups. I took the regular size cup instead.

With this information you can see why the following would be true.

• to go sales were down
• sales of large coffees were down

Without looking at this information there could be some hand ringing over the decline in sales over the past week. There could be managers saying “What can we do to increase our sales of large drinks and to go orders?”

This is what can happen when the end result is looked at without checking underlying data for conclusions and simply putting together a plan of action based on the result and not the data.

Oro Valley Home Sales September 2007

September home sales in Oro Valley and the rest of Tucson were down in September. For that matter they were down all over the country. Was it because of the sluggish housing market we keep hearing about in all the media.

No, it was because of the crisis in The Credit and Mortgage industries. It didn’t matter how many qualified buyers or pending sales were in the market, the mortgage industry was in crisis and it became much harder for anyone to close a loan and real estate transaction in September.

Are there no buyers? There are buyers, more buyers everyday, but unless they are cash buyers they have to get a loan. Getting a loan is a longer process, but not an impossible process. Please remember, most people applying for loans are qualified. They are putting 20% or more down. They are getting 30 year fixed interest loans. But the process is taking longer at the moment as the Mortgage industry sorts out the crisis. This is a much overdue sorting and it should have happened sooner. It shouldn’t never have happened in the first place in my opinion.

So it is not a time to jump to conclusions about the real estate market based on fewer sales in September. Even though there were fewer sales the average sale price in Sept. 2007 was more than $25,000 higher than the average sale price in Sept. 2006. Fewer homes sold, but for a higher sales price.

July’s numbers were down slightly for the entire Tucson Area. Considering all the bad news about Mortgage Meltdowns and the fall in the stock market as a result, to have held at this level is very good.

Here is a look at the Homes sold by bedrooms

The only category for Number of Bedrooms showing an increase for July over June was the 5+ bedrooms.

For the past 5 years July sales numbers have declined over June’s and most of those years the decline overall was between 2 and 3 hundred fewer sales for the month. This July the decline was 128 fewer sales.

Pending contracts for July are quite a bit higher than July of 06 and should lead to strong number for the August reporting period.

For a complete analysis of the Tucson Real Estate Statistics for July 2007 go to the Tucson Real Estate in The News.

For those wanting to look at the entire Tucson MLS Statisitics Report for July 2007.

Oro Valley MLS Statisitcs for June 2007

Number of Sold Units is down slightly for the month of June but as you can see it hasn’t moved far from the 300 units a month mark for the past 4 months. 

Active Listings in Oro Valley are down by 274 units.  This is good and reflects a decrease in the number of homes on the market all around the Tucson area.

New Listings also decrease for the month of June down to 725 from 791 new listings in May.

Average Sale Price has increase steadily this year and June is no expection adding on another $6,000+ over last month.  While asking prices are coming down, buyers should be aware that sale prices have continued a steady increase over most of 2007.  Looking at the table above we can see the avarage sale price as increased by more than $40,000 since March of this year.

The Absorption Rate has not changed much in the past 4 months and for June came in at the same place as May.  The absorption rate is how many months of inventory are on the market based on the number of active listings divided by the number of sold units for a given month.

Average Sale Price by Number of Bedrooms

I included this table last month and have added the June figures to the table.  It is intersting to see the sale prices broken down in this way.

In the bedrooms race for the month of June the 4 bedroom homes came out the clear winner for the month. Actually, it isn’t a race, and a single sale of a million dollar home in any one of these categories in a sampling area as small as Oro Valley can skew the figures dramatically. So don’t go making adjustments to asking prices or offers on a home based on these figures. They as for informational purposes only.

Tucson Area Real Estate Statistics for June 2007

For a complete breakdown and analysis of the Tucson MLS Statistics for June 2007 read the Tucson Real Estate in the News

Here is the link to last months post with a good explanation of the difference in Asking Price vr Sale Price. It is still very relevant to the June report and the July Oro Valley Real Estate Market.

Not all of the homes in the NW area are in Oro Valley, but all of Oro Valley is in the NW area so it is the closest we can get to an actual report for Oro Valley.

Number of Units Sold In the past three months we have seen a steady increase in the number of units sold each month. Granted not a huge increase each month but a steady increase none the less.

YTD Sold Listings are being reported for May at 1457. Yes, I know the numbers don’t add up. Yes, I know they should, but it never seems to bother the Tucson MLS that the numbers don’t add up from month to month. The explanation is that some numbers come in after the reporting is done each month so there will be slight discrepancies.

Active Listings have decreased for the Oro Valley area each month. This doesn’t reflect a big change, but it does show a steady trend downward, while Number of Units sold is a steady trend upward; this is a good trend to see in the Oro Valley market at this time.

New Listings are increasing steadily, but this isn’t a concern since the Units sold is increasing and there seem to be an offsetting of this number of new listings in the absorption rate.

Average Sale Price is the biggest surprise in the numbers this month. Not only are more homes being sold but the average sale price has jumped by $33,858 in 2 months. This reflects a pretty large increase in the average especially given the state of the Real Estate Market overall.

Absorption Rate is something we just started tracking for our analysis of the Tucson Real Estate Market and we are adding it here as well. If you are not familiar with the term it is a formula taking the total number of homes on the market, dividing by the number of homes sold during the month with the end result being the number of months it would take to absorb the number of homes on the market. This is a much better way of determining the state of the market over the usual analysis using Days On Market.

Tucson Absorption Rates vs Days On Market is a more in-depth look at absorption rates as a market indicator.

Average Sale Price by Number of Bedrooms

I thought it would be interesting to look at a breakdown of the Average Sale Price since it is indicating a rather healthy increase over the last couple of months. The table below breaks down the Average Sale Price by bedrooms in a home.

The 3 bedroom homes are the ones showing the steadiest price increases during this period while the 5+ bedrooms are showing a decrease by $251,456 on average. However, we need to take into consideration there usually aren’t that many 5+ bedroom homes on the market or being sold in a single month so this can be a rather volatile number.

The 2 bedroom homes had small pike in March coming back down to a level slightly above the March number for May. The 4 bedroom homes saw a dip in April with a bounce back in May of almost $25,000 over March’s average.

Three bedroom homes are the biggest in demand and show the steadiest growth in Average Sale Price, helping the overall average sale price to increase during this time period.

Real Estate and The News

So what is all this you keep reading about in the papers about the falling Real Estate Market and home values. Many of us are not aware that there is no single Real Estate Market. For example:

• Residential Real Estate Market
• Commercial Real Estate Market
• Residential New Construction
• Residential Resale

These are just a few examples of different areas of the real estate market. Then we have to take into consideration is what we are reading in the paper about the local housing market or the national housing market.

The headline “New Home Sales Decline for the 5th month in a row” might lead you to believe the real estate market is in trouble or a slump, but this is about new home sales, new construction. What about the resale market?

Asking Price vs Sale Price

One of the biggest things we read about are the dropping prices of real estate. When I get asked about how prices are in the market I ask the question, “Are you talking about asking price or sale price?” Asking prices are coming down, they had too, asking prices last year way out ran the selling price leading to a large inventory of homes on the market. Why? because too many homes were asking more for their homes than buyers were willing to pay. Sale prices have continued to show a healthy increase in most areas and anyone that bought their home before the huge run up in prices of 05 and 06 should be able to sell their homes and have a good return on their investment.

Units sold are up, Active Listings are down, and Average Sale Prices are increasing each month reflecting a healthy real estate market overall in Oro Valley.

• Tucson Record Number of Unsold Homes Flood the Market
• Tucson Housing Market 05 06 Run-away Auction
• Tucson Foreclosures and The Subprime Buyers

Now on to the numbers for April 07

There were the lucky 13 more homes sold in April than in March. Bringing the total of homes sold in the NW to 1102 YTD. Granted not all of the NW listings are in Oro Valley, but this is as close as we can get with the Tucson MLS Statistics as they are provided.

The average days on market increased by 4 and the active listing decreased by 14. The new listings in the NW were up by 93, but this needs to be considered with the number of active listings. Why don’t these numbers add up. For one thing it doesn’t take into consideration the number of homes that were listed and withdrawn.

One of the things that continues to contribute to the high number of active listings in the Tucson Real Estate Market are the homes placed on the market to “Test the Sand”. I know it is supposed to be “Test the waters” but this is a desert.

Some sellers, just want to see what they could get for their home. It doesn’t cost them anything to place a sign in the front yard and find out if anyone is interested. These listings just muddy the water, OK I’ll stick with the metaphor, they muddy the sand.

Indicators of Testing the Sand

1. The list price of the home is no where close to market selling price.
2. The sellers are unwilling to show the home except at their convenience.
3. It is never convenient.

I think some sellers are picking the number for the list price right out of the air.

Or “Well, my neighbor sold his home last year for $XXX and my home is worth more than his.”

Totally unrealistic pricing is a sure sign of testing the sand.

Real Estate agents are encountering a high number of people that when asked if they (the agent with a buyer) could show their home (the home of the seller) are being told,

“No, not today. Maybe, tomorrow.”
“But my clients are only in town for today.”
“Well, they can’t see it today.”

Oro Valley home sellers that really want to sell their homes put up with the inconvenience of keeping their home clean, tidy, and ready to show.

The NW might have the highest number of homes on the market of all areas in Tucson but it also has the highest number of sales of any area in Tucson. The next closest area to the NW in April was Central with 205 sales, compared to the NW with 316. The other bit of good news, if you are waiting for some, is the average sale price in the NW was $318,909.

All in all, April was pretty much a repeat of March, no stellar news, but no reason to man the life-rafts either.

The Tucson and Oro Valley real estate markets continue to be ahead of many in the nation.  Sales are maintaining a 2004 level.  It take a little longer to sell a home and more attention to detail needs to be made to differentiate from the other homes on the market, but the homes that are priced for the market, clean, and available to be shown are selling.

Searching for Oro Valley in the Tucson MLS is not as easy as it probably should be. One of the reasons for this is the fact that many people who live in Oro Valley have a Tucson mailing address and the listing goes in with the city Tucson instead of Oro Valley.

The only true way to isolate Oro Valley results is to only search on three zip codes 85737, 85755, and 85704. Not all of 85704 is in Oro Valley.

Here is what I can tell you about the Northwest Statistics released for March 07.

• 74 More sold units in March than February
• Average Days on Market 1 day less
• Active Listings up by 68
• New Listings up by 71

What does this mean. We have the highest number of homes for a Tucson Area on the market in March. Almost 25% of the homes available were in the Northwest. The most homes sold were in the Northwest with 303 the next closest area was Central with 180 sold. The average sale price in the Northwest was $306,963 for the Tucson area it was $276,486 putting Oro Valley homes on average $30,477 higher than the Tucson are average.

Oro Valley is a desirable place to live. There are a lot of activities and places to shop around town. There are a number of active adult communities and some wonderful schools. It all adds up to a great place to call home.