When RealtyTrac released its 2014 Election Housing Scorecard report recently, suggesting it could be used to predict results in the upcoming election, we had to give it a try.
Based on five factors that impact housing health over the past two years, the theory is people may be tired of the slow economic recovery and the place they feel it the most is when affecting their own personal investments. Americans don’t save much, so the majority of their investments are in their homes, when housing health is impacted it affects all of us. The vote is the only way we have to send a message to elected officials whether we feel better or worse off and demand change.
The five factors RealtyTrac used are: median home prices, seriously underwater homeowners, foreclosure starts, housing affordability, and unemployment rates. RealtyTrac analyzed 1547 US counties, including Arizona; based on these final scores, county housing markets were categorized as Better-Off, Worse-Off or a Toss-Up depending upon the score.
Here’s the methodology:
1) Median Home Price is the median sales price as per Tucson MLS in Pima County and RealtyTrac in other counties. Home price change is the percentage difference in median home prices from August 2012 to August 2014.
2) Underwater data was determined by RealtyTrac information. Foreclosure starts are based upon the number of either new auction or default foreclosure in the state. Properties that are considered to be seriously underwater are any properties with a loan-to-value of 125% or more. A total of 15%, or 8.1 million, of US residential properties with a mortgage is seriously underwater as of the third quarter of the year, representing $1.4 trillion in negative equity, according to a new report from RealtyTrac released today.
3) The two year foreclosure starts were calculated using August 2012 to August 2014 foreclosure start numbers.
4) The affordability percentage was calculated as the monthly house payment for a median priced home divided by median household income in August 2012 compared to August 2014.
5) Unemployment data by county was taken from the Bureau of Labor Statistics between July 2012 and July 2014 as from RealtyTrac with verification. A negative percentage means unemployment decreased which is a positive effect on employment.
RealtyTrac went on to predict several Senate races using this formula along with candidate polls. For full story and senate race predictions click here.
We wanted to test the formula ourselves on the two Arizona Congressional races, CD-1 and CD2, that have been receiving so much national attention and disrupting our regular television viewing lately. So here goes our very first attempt at political race calling.
Picking Democrat incumbent Ann Kirkpatrick will hold the seat in CD-1, based on her housing market scorecard. This district runs through six Arizona Counties: Apache, Coconino, Navajo, and portions of Pinal, Mohave and Gila counties. All these counties are ranked Better-Off in the housing market score than two years ago.
Median home prices have improved compared to 2 years ago: Coconino (14.29%), Apache (55.71%), Pinal (19.47%), Mohave (11.25%), Gila (1.61%) and Navajo (13.90%).
Percentage of homes underwater in Coconino and Gila is below the national average although above the average in the other counties.
Foreclosure starts compared to 2 years ago have declined or remained the same as in Apache County: Coconino (-44.68%), Apache (0.00%), Pinal (-41.54%), Mohave (-12.77%), Gila (-56.67%), and Navajo (-71.70%).
Affordability of homes compared to 2 years ago is improved: Coconino (5.05%) Apache (7.10%) Pinal (2.85%), Mohave (2.77%) Gila (0.98%), and Navajo (3.50%).
Unemployment 2 year change: Coconino (-1.30%), Apache (-3.70%), Pinal (-1.90%), Mohave (-1.80%), Gila (-1.40%) and Navajo (-1.40%).
The housing market seems to be in a recovery others can envy and that doesn’t bode well for Andy Tobin, the challenger in this district. Note to Andy: you might want to wait to actually move into the district.
Picking Republican challenger Martha McSally to win with a slight edge in CD- 2, based on the housing scorecard in this district.
The CD-2 housing market score favors a change. This district is comprised of Cochise County and portions of eastern Pima County that extends into the Foothills and Casas Adobes to the north. The 1-1/2 term Democratic incumbent Ron Barber is in the fight of his political life according to the polls. It was Retired Colonel McSally who lost by fewer than 3,000 votes to Barber in 2012.
Pima County median home prices are up (11%) compared to two years ago, small compared to other counties in the state. The percentage of homes underwater is above the national average.
Foreclosure starts are down (-30.70%) and home affordability 2 year change is 4.45%.
Unemployment change for the 2 years is down if only slightly (-1.30%). Pima County on its own would be a Toss-Up county for all these reasons, however look at Cochise now.
Cochise County residents should be ready for change. Housing is Worse-Off than two years ago. Median home prices declined in the past 2 years (-12.75%). Percentage of homes underwater is above the national average. Foreclosure starts for the 2 year change (128%). Affordability during this time (-1.59%) and Unemployment is unchanged from 2 years ago (0.00%).
If all things were equal, which we know they are not in politics, this housing analysis compared to two years ago may be just the tide that lifts Martha McSally over incumbent, Ron Barber.
Election Day is November 4th and as both campaigns, Democrats and Republicans alike have told us, “It all depends on the voter turnout.”
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If you want to cast an Early Ballot for the Nov. 4 election, you have until 5 p.m. October 24th to request one. Pima County voters can request an early ballot online at the link below, or call 724-4330. In order for your vote to count, ballots must be returned and received before 7 p.m. on election day. Request an Early Ballot from Pima County Recorder's Office: https://1.usa.gov/1zmlVWn