CNNMoney.com has an article about how wealthy neighborhoods across the country are faring under the real estate slump.
Housing crunch, 90210
NEW YORK (CNNMoney.com) -- Across the country, real estate agents and home sellers in wealthy neighborhoods who grew accustomed to seven-figure bidding wars during the boom are feeling the sting of the housing crunch.
Three of the nation's richest zip codes saw particularly steep home-price declines in the three months ending April 30, compared with the previous three months.
In Palm Beach, Fla. (zip code 33480), median home prices fell 38% during that period, according to the real estate Web site Trulia. Prices in Greenwich, Conn. (06831), dropped 15%, while homes in Wayzata, Minn. (55391), are selling for 28% less.
Those are enormous price swings for such a short period of time, so enormous that they're hard to believe.
Seeing that, I had to take yet another look the million $+ market here in the Tucson Foothills to see how it compares to what's happening in Palm Beach and Greenwich and the like.
Keep in mind that in Palm Beach and Greenwich virtually everything for sale is a million $++ home, and I mean +++, while here in the Tucson Foothills, sales of million $+ homes account for only about 13-18% of the overall Foothills market. So they're different markets.
But with that in mind, and pulling data for the same period as CNN reports, here's what's happened in the Tucson Foothills million $+ home market during that time period.
From January 1 through April 30th of this year the average sale price of million + homes in the Tucson Foothills was $1,731,500 vs $1,529,290 for the last four months of 2007, an increase of 13%.
And the median sale price fared even better, $1,575,000 for 2008 vs $1,177,500 for 2007, a whopping increase of 33%.
Prices Up 13% and 33% in that short time, that's just as hard to believe as the enormous price drop in Palm Beach.
And I don't believe it, not for a minute. This is not a true reflection of the price trends of million $+ homes in the Tucson Foothills.
And I bet it's not a true reflection of the market in Palm Beach or Greenwich either. But it makes a good headline,
Housing crunch 90210, cute.
A few very-very expensive homes did sell here earlier this year, and that's jacking up the numbers some, and maybe it's also a reflection of the seasonal nature of sales here.
September through December are slow months for sales of high-priced homes in the Foothills, while January through May is prime time.
So comparing those two very different periods does not make for an equitable comparison.
I think a better way to get a sense of price trends is to compare sales for the same time period from one year to another, and the longer that time period, the better.
So here's a look at sales of million $+ homes in the Tucson Foothills for the period of January through May, from 2004 through 2008.
| Year | # Sold Jan - May | Avg Sold $$ | Median Sold $$ |
| 2008 | 29 | $1,609,259 | $1,475,000 |
| 2007 | 41 | $1,543,868 | $1,400,000 |
| 2006 | 69 | $1,542,674 | $1,275,000 |
| 2005 | 42 | $1,418,881 | $1,265,500 |
| 2004 | 24 | $1,539,292 | $1,412,500 |
And though this presents a much more sober picture, it's a more telling and accurate reflection of price trends for million $+ homes here in the Tucson Foothills.
2004 was a banner year for selling high-end homes, maybe even a year of irrational exuberance, and from then on prices were either down or remained virtually flat until 2008.
Between 2004 and this year the average & median sale prices are up just 4.5% & 4.4% respectively. Considering inflation, that's a net loss if you bought in 2004 according to these figures.
With about 100 to 125 million $+ homes selling per year, the high-end share of the Foothills market is relatively small, yet prices range from $1.0m all the way up to about $8.0m, so short-term sales comparisons can easily be skewed and therefore misleading.
Year to year is best, and I'll do that next.
see my web site thefoothillsToday.com
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