Thursday, July 8, 2010

Home sales: It's about the job market, folks

I may be away temporarily from my day job as a real estate reporter, but that doesn't mean I'm indifferent to what's going on in the marketplace. Today I read that Arizona State University's Realty Studies research department tracked foreclosures in the metro area for June and they're up, some 600 homes since May. The June number is 3,800. Though that number is below a year ago, it's only by 200 homes.
I bring these numbers up because some of the most vocal real estate consultants, many retained by local homebuilders, have been saying for more than a year that the worst is over. Last summer some were proclaiming that we were just a few months away from a healthy industry restart. I was doubtful. Some said I was doubtful because I'm a typical negative journalist. OK, so I'm naturally skeptical. I've been fooled one too many times by smooth talkers. But without going too deeply into my psychological make-up, here's the main reason for my doubt about the housing market in Phoenix: Few new jobs. I'd even venture to say that many current homeowners still are worried about whether they will have a job by the end of the year. The last thing on their minds is buying a new home. Most of us are treading water and hoping for the best and not thinking about buying a new house. It's kind of sad given how low interest rates are. But when you're not feeling secure about income, the interest rate is irrelevant.
Given these factors, I'm shaking my head that the developer of Optima Camelview luxury condos in Scottsdale has already received approvals for yet another residential project at the corner of 68th Street and Camelback Road. What am I missing here? There are several unfinished luxury condo projects within a mile of that neighborhood and even finished ones remain vacant. I don't "get" the developer's thinking other than wanting to be ready for when the economy changes.
There is nothing that leads me to believe that the economy is changing here or nationally in a positive way any time soon. Another thing I don't "get" is how politicians across the Valley and the country are expending energy on everything but job creation. The housing market is not going anywhere soon without jobs. Secure jobs.

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