Pringles are the best chips ever made. That’s what my 7-year old daughter thinks. And given her vast experience in this area I have no reason to disagree with her. What chip is best? We had this discussion recently on our way to pick up her younger sister at pre-school. She was adamant about Pringles.
What about Ruffles I asked? Cheetos? Fritos? Or my personal favorite, nacho cheese flavored Doritos? Yes, Pringles are delightful I told her. But, it seems unfair to compare a snack food that comes in a tube to those that come in a bag. She didn’t see the difference and remained steadfastly committed to her chip choice. What can I say? My daughter does not understand packaging principles.
Do you know what else she doesn’t understand, at least until recently? Double dipping – whether it’s Dean’s French Onion, Frito’s Bean Dip or your garden variety Ranch dressing – that girl will plunge her chip in over and over again. She’s improved over the years for sure but it can still be an issue. I’ve explained to her that double dipping is unhealthy. No more double dipping I say! It must stop!
Equally unhealthy and even more disconcerting is all of this talk about a double dip in the real estate market. Yesterday morning I came across a blurb in the Arizona Republic – Home Prices Expected to Dip.
Here we go again. Another opportunity for the media types to pour fuel on the fire right? Actually, this time they got it right. Well, sort of.
For those of you who read my blog on a regular basis you know how much I respect Michael Orr of the Cromford Report. He’s a housing analyst that, along with his counterpart Tom Ruff of Information Market, studies everything real estate related in the Phoenix metro real estate market. Together they track Notice of Trustee’s sales, Trustee’s deeds, cancellation of trustee’s sales, normal sales, short sales, REOs, days inventory, contract ratios and more. I recently took one of Michael’s classes and he predicted there will be no second wave of foreclosures. But, that’s a topic for another day.
Michael accurately called the bottom of the Phoenix real estate market in April of 2009. The average price per square foot for a sold home that month was $83.82. The previous low was recorded in 2000. Since April of 2009, the average price per square foot slowly increased – peaking in May of this year at $91.83. Last month, the average price per square foot dropped to a new low of $82.49. It appears as though we have experienced a real estate double dip. Yuck!
However, if you analyze the data (which I’ll admit can be dreadfully boring) AND factor in the effects the tax credit had on our market, an argument could be made that there was no double dip. How? Consider this – since June home prices here have dropped approximately 7%. The median price in the Phoenix metro area is now hovering around $115,000. If you do some quick math you’ll find that the median home has dropped in value by about $8,000 since the tax credit expired. Interesting isn’t it?
So, if you’re not really paying attention it would appear as though we’ve experienced a double dip. That’s not what really happened. The home buyer tax credit artificially created a spike this summer and now home prices are going back to where they belong. My prediction is we’ll see some additional declines because of the holidays but start recovering in the spring.
Now pass the Doritos. I’ll try to keep my daughter away from the bean dip.