Foreclosures for Pima County ONLY 9000 – Good News

Tucson Weather For the Next Four Days

We should report the weather the same way we report the economic news.

Tucson’s Highest Low for the next 4 days will be 46 degrees.
The lowest low will be a bone chilling drop to 42 degrees which will be tomorrow.
Highs for each day will only reach 72 degrees. Bring your parkas.

The headline in today’s (newly shrunk) “Arizona Daily Star” ” The number of local homes entering foreclosure last year was almost 9000 and they’re dragging down home prices.”

97.84 of Homes in Pima County NOT in Foreclosure
97.84 of Homes in Pima County NOT in Foreclosure

And the 9,000 in big BOLD red letters is a nice touch.

Foreclosure PDF map provided by Marana included with the article

There is so much that needs to be addressed. I don’t want this to turn onto a tome.   I also don’t want the “You are up selling the market” accusation.   Here are the facts.

  • 9000 are a lot of foreclosure notices
  • These are notices of foreclosure not the number of foreclosures
  • This represents only 2.16 of the properties in Pima County
  • 97.84 % of properties are NOT in foreclosure and families are living in those homes and making their mortgage payments
  • There are currently 7, 626 home for sale in the Tucson MLS not all of these homes are foreclosures
  • The foreclosures on the market at this time are effecting home sale prices
  • New construction is being effected in a negative way.   BUT this favors home owners who now are not competing with new construction.
  • 88,854 foreclosure notices for Maricopa County in 2008

The fact that so many foreclosures are on the market at the same time are effecting average and median sale prices.   But this doesn’t mean that every home sold is going to be for a loss.

When “Repo Joe” rolls into town with repossessed autos you don’t see the new car dealers panic and lower their prices because there are repos in town. (All right, this is for comic relief, I know it is a bad example and like comparing apples to oranges.   Thought it might be interesting to try newspaper logic)

Let me give you a real apples to apples comparison

Tucson MLS January Quick Stats

As of Noon January 15, 2009

Closed Transactions: 173
Average Sale Price: $185,260
Median Sale Price: $154,900

In the same paper reporting sales by zip code:

Address Cost Cost per ft. Year Built
85737      
       
10685 N Thurnder Hill Pl $295,000 $152.06 1991
11129 N Rams Horn Tr $239,500 UNK UNK
11180 N Ram Park Ln $274,307 UNK UNK
11449 N Madarin Ln $412,000 $135.35 1988
11681 N Copper Mountain Dr $505,000 $147.45 2002
1500 E Pusch Wildernes Dr $200,000 $157.73 1995
2300 E Stone Stable Dr $260,000 $147.81 2006
639 W Tremolo Ln $360,485 UNK UNK
690 W Pizzicato Ln $276,469 UNK UNK
703 W Tremolo Ln $344,787 UNK UNK
775 W Clear Creek Wy $189,000 $110.66 1994
858 W Prot Royal Pl $182,500 $74,61 1991

There is nothing in the table indication what type of homes these are. But as you can see they aren’t all at the average or median sale price.

Yes Foreclosures and short sales are having an impact, but they aren’t dragging down all sale prices. I hate to use the old real estate saw but location is significant in home sale prices.

Finally Here are the figures for foreclosure notices for all 15 counties in Arizona for 2008 provided by California based Realty Trac.
County

County
# of foreclosures
% of total housing units
Pinal
8,830
6.96
Maricopa
88,854
5.94
Mohave
3,576
3.62
Santa Cruz
582
3.58
Yavapai
2,668
2.64
Pima
9,043
2.16
Yuma
1,355
1.59
Cochise
602
1.07
Navajo
485
0.92
Coconino
479
0.81
Graham
93
0.78
Gila
216
0.72
La Pax
66
0.42
Greenlee
10
0.27
Apache
52
0.16

Let’s recap here: 97.84 % of properties are NOT in foreclosure and families are living in those homes and making their mortgage payments.


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4 thoughts on “Foreclosures for Pima County ONLY 9000 – Good News”

  1. Nice post with good information. Thank you. I have some comments.

    — The Arizona Star as you say is shrinking and in trouble like most newspapers in this country. Sensationalism will not help, good reporting might.

    –So the rate in Pima is 2+% and Pinal 6+%, more important to this buyer, what is the trend? Up or down?

    –Unknown is the pre-forclosure number. Those behind one to three or more months in mortgage payments. No way to get this information, but it would be great to have for knowing trends.

    –Are we anywhere near the three times incomes for the price of housing in your area. This is the traditional measure of affordability & in this economy I doubt we will do much better that that when we “settle out”. I better do some research. :>)

    — Please don’t be offended when I say you sound like you might work with more sellers than buyers. Either way, I sincerely appreciate your site.

    Chris

  2. @chris swenson – Yes the Daily Star is in trouble.

    The trend it down. But there is some speculation it will go back up in 2010 as more ARM loans reset. However, everyone knows they are scheduled to reset and by then the Obama administration should have a mechanism in place to allow those home owners to reset at a very low interest rate instead of the 12% or higher that many are scheduled to go to.

    Three months behind should be showing up in pre-foreclosures. There are new programs going into place now that will allow homeowners in trouble to get assistance before they get behind on payments and are already in a deep hole. There will still be some that simply walk away. They never intended to do anything but hold the home and flip it for a profit. Their intention when buying wasn’t as a homeowner but as speculators. That is one number we don’t know.

    We also don’t know how many homeowners were talked into taking out a mortgage. There were some who had their homes almost paid for or were even debt free that took on a mortgage. There should be a program to help these (mostly retired and elderly) keep their homes.

    The traditional measure of affordability does not apply to Tucson. It hasn’t for decades. Here is why. We have a geographic climate which makes it a perfect place to spend the winter. There is a higher number of second homes in Tucson than almost anywhere else in the country. We also have a high number of people paying cash for those homes because they are already retired or will retire in the next 5 years. It is projected that pima county will continue to grow with Boomers coming here to retire for at least the next 10 years. They don’t need jobs. They do desire the weather. They also are coming from parts of the country where real estate and property taxes are much higher than Tucson. To them our homes are very affordable.

    Usually this group of people are in some ways insulated from the economy. Like my Dad who is retired and has all his money in CD’s. He isn’t making as much on his money but he isn’t loosing any either.

    Chris, I’m not offeneded. You ask some great questions. We actually work with about 80% buyers and 20% sellers. We are relocation specialists working with a lot of buyers from out of state and even out of country. It is one of the reasons I know why the traditional rule doesn’t apply here.

    There is a lot more I could say about why we have and will continue to have a lower number of foreclosures in Tucson and Pima county than say in Maricopa. If you want I’ll be glad to address this topic in an email to you as this comment has already grown quite long. I think I covered most of your points.

    http://tinyurl.com/8kwu2c this is a link to an article on investing in Tucson in which I contributed a lot of content on this topic.

    Thanks for your input it helps to further the discussion and clarify some of the issues.

    Have a Great Weekend (it is the weekend again isn’t it?)

    Dave

  3. As you say, a long but interesting reply. Since many more people read than post, I think they may learn from this exchange.
    We mainly differ on the prospects for the baby boomers ability to retire with cash, or good credit in hand. I am more bearish than you on the economy and Obama’s being able to float the debt required to pay for the programs you mentioned. Thus far it’s been easy & cheap as people like me have their money parked in T-Bills at zero % interest. Is there no limit to debt carrying ability at all government levels? TWT (time will tell)

    Chris

  4. @chris swenson – As to the boomers retiring with Cash, that is true for the time being. What we are currently seeing coming into town aren’t boomers getting ready to retire, but people who have already retired and been winter visitors here for several years. They are finding prices and interest rates the best they have seen since starting to winter here.

    If the boomers are in the Stock market their liquidity is pretty much gone. If they moved into money markets they are holding with funds which makes Tucson real estate look like a good investment with low prices and low interest rates.

    The first 100 days of the Obama administration will be interesting. I am bearish on the economy as a hole. But the recovery will start in housing, I think almost every economist has stated such. This means it will lead the way. Real Estate in Tucson started being recessionary in 2006 and it took a couple of years for the rest of the economy to be shaken.

    Seems like about 14 month periods with the Mortgage meltdown in Aug 2007 and the rest of the financial sector following in Oct 2008.

    One thing is certain, it won’t be boring in 2009. As you say TWT.

    Dave

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