2007 END OF YEAR SUPPLY STATS, 42,912 SINGLE FAMILY HOMES FOR SALE AS OF 1/1/08

Sorry, this is a little late being posted, but better late than never!

Every year through the holidays inventory levels drop, that was no different in 2007. It started a little later and was not as furious as in the past. I believe more sellers are understanding our market is drifting lower and the sooner you sale the more money you get.

Over inventory levels here in Maricopa county peaked, well they peaked first in June at 45,000 single family homes. These numbers are all collected from the Arizona Regional Multiple Listing Service, ARMLS. However, as our market was on the road to recover it received a punch in the nose. "Sub-prime II" hit in August and demand dropped by 25% from its already low level. That hurt. Demand had caught up to supply and it took 12 weeks to add 1,000 homes to inventory, where it had taken 2-3 weeks earlier in the year. Anyway, "sub-prime II" made inventory levels grow again. This time they peaked at about 47,800 homes in October. From there we dropped to 42,912 SFH, single family homes, by the first of the year. This was a good sign. Levels dropped by 10%.

Last year, 2006, our inventory levels dropped by 16% from their peak to the first of the year. They peaked in September at 39,950 single family homes according to ARMLS. Then by the first of the year the level dropped to 33,593. In 2007, the inventory leveled off earlier in the year. The Phoenix resale market was moving into recover and then boom. In August, it was like a bomb going off. However, the dust has settled and its time to get back on the road to recovery.

This Friday at Dodge Theatre, The Music of Led Zeppelin

Lisa and I went to this concert last year. We had a blast. I thought it was just the Phoenix Symphony performing the music of Led Zeppelin, it wasn't. This band called Zebra and their lead singer, Randy Jackson, are performing The Music of Led Zeppelin and backed up by the Phoenix Symphony. It was an AWESOME event. We are going again on Friday. I highly suggest any Led Zeppelin fan to attend! I believe tickets are still available.

Concert Tickets for: The Music of Led Zeppelin

The Music of Led Zeppelin featuring The Phoenix Symphony

Friday, January 11, 2008
Dodge Theatre
Doors: 7:00 pm Show: 8:00 pm

400 West Washington
Phoenix, AZ 85003

Sold in DC Ranch by The Cameron Team!

Whoops - forgot to mention this one in December! The Cameron Team sold a beautiful 3700 sq.ft. model home built by Engle to one of our buyers. This awesome home is located right across the street from a beautiful park in DC Ranch!

8904 N. 15th Lane - Pending in Central Cooridor

Our first sale for the new year and we found our own buyer!! The Cameron Team put this home under contract after diligently pursuing both buyer and seller to create a deal. We look forward to a smooth closing!

Another Cameron Team Listing Sold! 1401 N. Bel Air Drive

After being on the market with another agent for over a year, one of Jeff's clients referred this seller to The Cameron Team. In less than a month, The Cameron Team sold this home and successfully closed escrow on Jan. 4th, 2008!!

RECESSION ON THE HORIZON

I don’t know how anyone can argue against the fact that a recession is coming. The only question is how severe. Friday’s employment report showed a jump in unemployment of .3%, from 4.7% to 5%. I heard, on CNBC, every time since WWII that unemployment jumped this much a recession followed. The low unemployment has been keeping the consumer flush with cash and they do nothing but spend that money. The problems all stem from the housing and liquidity crisis.
The state of Arizona is in shock over the looming $1 Billion dollar budget deficit. How did they not see this coming? New home sales are down dramatically. Let’s look at how this affects tax collections. Every new home is taxed at about 5%, this tax is paid to the state as sales tax. So, in 2006 we built approximately 50,000 new homes with an average cost of about $325,000; then how much tax was collected? Well 50,000 x 325,000 x .05 = $812,500,000. And if in 2007, we sold 30,000 homes with an average cost of say $300,000; how much tax would that create? Well that would be 30,000 x 300,000 x 0.05 = $450,000,000. Therefore, the difference between $812,500,000 and $450,000,000 is $362,500,000. There is 1/3 of the budget shortfall.
Next look at the 40,000 Realtors and see how they can affect the budget. So, if on average they paid in $500 each that would be 40,000 x 250 = $10,000,000. Now with potentially 40% of the agents out of business you can add another $4,000,000 to the shortage. Not huge, but it keeps adding up. Now there are the loan officers, appraisers, title agents and all their assistants. Easily ½ but probably all of the $1 Billion state tax shortage can be traced back to housing.
I guess I went off on a tangent again!

December Jobs Report + 18,000 Jobs

The housing issues and liquidity crisis are starting to make their way into the rest of the market. A mere 18,000 jobs were created in December and unemployment jumped from 4.7% to 5%. I read before that it takes about 180,000 new jobs per month to keep up with the new job seekers, basically to keep unemployment steady. It seems high to me, but that is what the talking heads on CNBC reported. I hope the job frontier in Arizona bodes better. One thing the jobs report does not show is all the now unemployed Realtors and Loan officers that don't receive a regular pay check because they are on commission.

Here is the article about the jobs report.

Unemployment Up, Stoking Recession Fears
By JEANNINE AVERSA,
AP
Posted: 2008-01-04 17:15:45
WASHINGTON (AP) - Wary employers clamped down on hiring and pushed the unemployment rate to a two-year high of 5 percent in December, an ominous sign that the economy may slide into recession. President Bush explored a rescue package, including a tax cut, with his economic advisers.

http://money.aol.com/news/articles/_a/unemployment-up-stoking-recession-fears/n20080104171509990023