Depending on which news channel you watch or which website you follow, the economy and the world are either going to Hell in a hand basket or we’re exactly nine seconds away from entering Nirvana. We could go into the reasons for the differing perspectives, but since you’re reading this column, the only perspective that REALLY matters is mine, right? I say that with my tongue firmly planted in my cheek, of course, but I would like to take a moment and just point out a few things that are devoid of passions and politics that should help us all gain a little non-partisan perspective about the housing market.
I know I’ve written about this before, but it bears repeating: we are not approaching a bubble. “That’s your opinion, you filthy animal,” some of you may say, but let me give you some data to let you decide for yourself (data about it not being opinion – I can’t do anything, really, to dissuade you from thinking I’m a filthy animal). Using the Tucson, AZ, housing market as my data set, let’s take a look at a couple of things, and you can decide for yourself if my bubble comment is correct (and I hope you reconsider your opinion of my personal hygiene).
In April of 2007 at the height of the “Bubble Era” (I just made up that name), there were 10,387 houses for sale – that was the peak for the Tucson market, and the numbers started to decline from that point. In February of this year, the number of houses for sale was only 3,293.
Granted, those numbers are going to vary from market to market, and there will be exceptions, but I believe this proves the rule: we’re not even close to the numbers that we were seeing back in the Bubble Era.
Let me share a couple more pieces of information to round out this discussion on the state of the housing market – I’ll use Tucson again as my point of reference. In June of 2007 (the peak), the median home price was $225,000, average sales price was $293,443. In February of this year, the median home price was $207,000, and the average sales price was $249,095. For further perspective: the median home price in February of 2015 and 2016 were $168,900 and $194,000, respectively; the average sales price in February of 2015 and 2016 were $209,527 and $229,703, respectively.
While my stating the obvious may, perhaps, cause a collective “duh” to be uttered, I’ll do so anyway: home values are growing at a healthy but calm pace. Coupling that with the fact we’re not close to a bubble forming, you have reason to be happy if you’re a current homeowner and optimistic that a home is a good, solid investment if you’re a prospective buyer. I’m reminded of something a friend’s dad used to say each time they were on a road trip and my friend would ask, “Are we there yet?”. His dad would always reply, “No, son. We are always HERE.” Stop the hand wringing and embrace the now. The future is only the result of today.