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September 2007

How is the sub-prime debacle affecting the Sonoita market

Posted at 11:25 AM, Sep. 8, 2007

The most frequently asked question today by locals and people contacting my office is: "How is your market being affected by the sub-prime lending crisis and the down-turn in the real estate market?" The answer, quite honestly, is it does not appear to be affected at all! Our year-to-date and past two month statistics certainly indicate a strong market. My own sales and income figures support this. So, here are some numbers: Residential sales for 8 months 2007 were 26 homes with a total value of $13,209,000. (This includes 3 sales over $1MM.) In 2006, we recorded 21 sales with a total value of $7,361,065 (none over $1MM). (All statistics are from the Tucson MLS.) Land sales in the same period were 56 sales valued at $9,221,400 in 2007 and 61 sales valued at $10,604,673. For the most recent 2 month period ending August 31st, residential sales were 10 closings valued at $6,081,000 (Includes 2 sales over $1MM) versus 7 closings valued at $2,349,000 in 2006. Vacant land sales in the same period consisted of 7 closings valued at $644,000 and 9 closings valued at $1,573,000 in 2006. So, our housing market seems to be quite healthy, even the average time on market is down for both homes and land. What does this mean to buyers and sellers in this market? Buyers who are waiting for "better deals" because of what's going on nationally are possibly missing out on the home or lot they want to buy. I see some price adjustments because of an over-optimistic seller, but the general trend will be upward. Sellers whose home or land has not sold, are probably priced too high above their competition in the marketplace. If they don't adjust their prices to the market, buyers will "question" why the property has been on the market so long and will avoid making an offer for fear of "offending" the seller. Thus, attractive properties are going to linger on the market when they actually should have sold.