ALL PHOENIX REAL ESTATE

… not quite enough slides for everything, but you’ll get the idea.

Thanks for a wonderful 2008 and we’ll see you tomorrow in 2009!

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Normally I’d be posting absorption rate statistics but with the new year just two days away, I’m going to hold off until then.

Admittedly, the numbers will skewer with the expiration of a couple thousand listings as 2008 closes, but the year-end/year-beginning numbers will be of greater benefit going forward.

For those who can’t wait that long, as of this moment in time the Phoenix real estate market has an absorption rate of 10.1 months - 38,316 active single family detcahed homes against sales of 3,770 over the preceding 30 days.

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Here’s the cliff notes version of the story:

David Lereah, one-time chief economist for the National Association of Realtors, told Money Magazine that he was spinning the home data that he reported during his tenure.

If you look at my actual forecasts, the numbers were right inline with most forecasts. The difference was that I put a positive spin on it It was easy to do during boom times, harder when times weren’t good. I never thought the whole national real estate market would burst.

Admittedly without checking, I’ve got some doubts about the first setence. As for the rest, the admission only comes about two years and one book too late.

Somewhere buried in the archives here are calls for NAR to silence Lereah for all of our sakes which, of course, didn’t ever happen. So David (with help from many in the field) managed to take our industry’s credibility and flush it like Lehman Brothers stock.

Nice work.

In any event, I wrote a little more fully on the topic over at NAR Wisdom (more likely than not, to Jay’s surprise. It’s been a while since I’ve written there.)

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Over the past three months, the Phoenix real estate market has accelerated from slowing down to a steep fall down the rabbit hole. The over-arching question is how much deeper into Wonderland can the market fall. And for this, I’m afraid there doesn’t seem to be an answer. Logic is on holiday.

Those who argued - and rightly so - that it was illogical for real estate values to rise by multiple percentage points ever month back in 2005 would almost certainly have to argue it’s equally illogical for values in some areas to be dropping by percentage points over the past couple of months even after the gains of 2005 have been stripped away.

Of course, logic doesn’t have anything to do with this. In many areas, the state of the market is wholely due to the proliferation of bank owned homes and the banks’ desire to move inventory. It’s 2005 in reverse; recent comparable sales mean next to nothing when it comes to pricing property, aside from providing a baseline from which several percentage points can be shaved for a new listing price.

In some instances, the value of a given property gets lifted back to the past sales levels because of the presence of multiple offers. But that’s not a given. And that leads to banks putting almost ludicrous prices - prices akin to what my parents paid for their house in 1977 - on homes in an effort to elicit multiple offers and a far higher price.

Emotion has everything to do with the current real estate market. Fear has kept many on the sidelines. Yet when people do jump in, they’re more than willing to forget all that they have heard the past couple of years and start raising the bidding on one particular home when there are others available.

The best example I’ve seen recently was a bank owned home in Laveen that had a 3-car garage but no air conditioner. At one point, the bidding was more than $10,000 above the original asking price of $105,000 - this, for a home without air conditioning. There were a dozen other comparable homes, comparable in every way except for the 3-car garage … that lack of supply was causing the same hysteria we saw in 2005 to happen, just at 33% of the price.

An utter lack of logic permeates everything. The other day I read someone’s comment that buyers should just sit on the sidelines until the market improves. Which, of course, is impossible. Without demand, supply doesn’t diminish and prices fall further.

If you don’t need to sell, don’t. If the planets aren’t aligned correctly and this isn’t the best time for you to buy, don’t. No blanket statements here. For some it’s the right time to buy, for others it’s not. Plain and simple.

At least it seems plan and simple. But as we continue to delve deeper into the rabbit hole, fewer things seem cut and dried.

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He’s been by my side since the very beginning, though he doesn’t look much like he did when we started four-plus years ago. More and more though, as 2009 approaches, he’s showing his age to degrees I can’t possibly ignore.

No, not Tobey. Though he’s getting grayer faster than me.

I mean my original real estate website, Dalton’s Arizona Homes.

This may sound odd these days, but when I started selling real estate back in 2004 the necessity of a website still was up for debate. My goal was to have a website to generate business, not just to point at occasionally and say “hey, I have a website.”

And for the first couple of years it worked just fine. Better than fine, actually.

That was back before the blogs started dominating my existence (my first near-tragic post on RealTown appeared just under three years ago.) And since that time, I’ve spent next to no time on the website that started everything … even as it remained fairly high on the search engines.

The time’s come for a makeover … which means I now have two sites to make over, and a full website to create in my “spare time.” Odds are, the information will make its way over to a Wordpress site with a similar look as this and others of mine.

It’s a necessary change but not totally a happy one. Much time was invested re-working the code on that site until I had things the way I wanted them.

But that was then and this was no and there’s no going to back to then now.

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