Tucson real estate market trends begin to appear with numbers analysis over a period of months, often providing suprises.  Relative to the numbers of properties sold compared to the number of listings in the area, the locations of Tucson showing the greatest number of sales include the Central area, the East, the South, the Southeast, and the Southwest.  Each one of those areas in June had greater than 22% of listings sold. 

Tracking the numbers, we can see improvement in almost all areas.  Many homeowners, however, are keeping their properties off the market until the price points improve.  This is particularly true in high dollar areas.  Many properties which have been on the market more than six or nine months, are taken off the market by their owners.

The numbers of days on the market for listings sold was 83 in January, 85 in February, 85 in March, 78 in April, 85 in May and 80 in June.  Sellers know in order to compete in today’s market, properties must be priced “ahead of the curve” and show better than competing properties.  Much of the competition today is in short sales and foreclosure properties. 

By far, the greatest numbers of properties currently on the market are priced between $200,000 and $249,999.  This is followed by properties between $300,000 and $399,999.  Collectively, about three times as many properties priced between $100,000 and $200,000 with approximate $20,000 steps, are listed. 

On the upper end of the price scale, as of June 2009, 432 properties are listed between $400,000 and $499,999;  519 between $500,000 and $749,999; 258 properties between $750,000 and $999,999 and 301 properties priced $1,000,000 or above.

The chart below shows the numbers of properties sold each month since January 2009 and the total number of listings for each of the 14 Multiple Listing areas.   Looking at the percentages, one can discern where the properties are moving,  The upside is most all areas have experienced increase in sales since January 2009.

Resources:

http://www.tucsonrealtors.org/tar-v2/MLS_Stats_June.pdf

Again, thank you Scott Weidamoyer who compiles statistics from where I generate these numbers for the Tucson Association of Realtors.

   When people don’t know what is about to transpire, they do nothing.  The total Tucson real estate sales volume between January 2009 and June 2009 definitely reflects that sentiment with an 88% increase in  June over January.  In February, the stimulus bill passed and people felt relieved that they now knew what Congress was doing.  The sales numbers reflect people coming out of hibernation to purchase property.

The median sales price crept up slightly from $163,500 to $165,000 or about 1 1/2%.

Two years ago in June, the median sales price was $225,000.  That is a drop of more than 26%.  However, the average sales price tops $200,000 and is within a little more than one percentage point in June over January.

Tucson has 14 Multiple Listing Service areas and once again, the average sales price in the North- the Catalina Foothills area is the highest at $387,629, followed closely by the extreme Northeast which is the Redding Pass area at $375,000.  The Northeast area follows with an average sales price of $342,160; this is the Sabino Canyon area.

Dropping to an average sales price of $263,894 is the Northwest area which encompasses Dove Mountain, Oro Valley, and Continental Ranch.  From that price point, decreasing in value is the extreme south at $201,082–the Green Valley Sahuarita area.   From there, the extreme southeast or the Vail area is at $191,743.

The west side average price is $182,821, followed by the central area which includes the University of Arizona area at $180,320.  The east side of town includes areas around Davis Monthan Air Force Base and is next in line at an average sales price of $161,749.

The extreme northwest or west of the Tucson Mountains in the Arva Valley area has an average price of $136,050, followed by the extreme southwest where STar Valley master planned subdivision is located and Diamond Bell Ranch, at $125,449.   The southwest encompasses Midvale Park at $107,664 and finally the south area of Tucson at $97,291.

Price points follow the value of land and in the north, few building lots are available, whereas in the southwest, building lots are readily available.  However, one should remember 82% of all the land in Arizona is held by some type of governmental entity.  Only 18% of the land mass is available for development.

Zip codes also tell a story of what areas are selling, compared to the numbers of properties active on the market.

Click the following link for a map of Tucson and Zip Codes.

http://www.tucsonaz.gov/planning/maps/city/wardzip.pdf

Resources:

http://www.tucsonrealtors.org/tar-v2/MLS_Stats_June.pdf

Once again, thank you Scott Weidamoyer of the Tucson Association of Realtors who compiles the statistics which I use on these blogs.

   Don’t  believe what people say.  Look at the empirical evidence.  The stimulus package was signed into law by President Obama on February 13 of this year.  Human nature attests when people do not know or understand  what is transpiring , they often do nothing.  This certainly has been true of the real estate market since the August presidential conventions.  Once the stimulus bill passed, the Tucson market began to emerge from hibernation—not because of the stimulus bill, but because people understood government action.

The chart below shows the total unit sales for each month between January 2009 and June 2009.  There is an 85% increase in total unit sales from the January numbers to the June numbers.  Putting the numbers further into perspective, this represents more units sold in a month since July 2007 when 1182 homes closed escrow.  Althought on one hand, this is good news, we will see tomorrow,  prices have declined dramatically.  The monthly inventory in June is 18.5%  + less than January.  Each month, inventory  has been steadily decreasing.  Decreasing inventory bodes well for a stable market.

Total new listings also decreased almost 20% since January.  Pending contracts have risen by 52% from 941 in January to 1432 in June.  These numbers further indicate the housing inventory is gradually decreasing.

This is all good news for the Tucson real estate market.

According to the Tucson Multiple Listing Service, the monthly comparision of the types of properties which sold, is as follows:                 

Once again we see an increase in the sale of single family homes, townhomes, and condominiums.  Manufactured homes and mobile homes are a much smaller part of the housing inventory.  Sales remain steady at the January levels during the subsequent six months.

Tomorrow:  Pricing

Resources:

Tucson Association of Realtors – June 2009 Residential Sales Statistics

 http://www.tucsonrealtors.org/tar-v2/MLS_Stats_June.pdf

Statistics come from the June housing report produced by the Tucson Association of Realtors prepared by Scott Weidamoyer.

    Our real estate market here in Tucson is beginning to show signs of life, although it is predicted there is a great deal of “shadow inventory”.   This is inventory held by the banks from foreclosures, and has not yet been put on the market.  Short sales and foreclosures continue to be prevalent.  People who do not have to sell their homes are staying put for another year or so.

   Tucson is considered a distressed area and appraisals are often coming in low.  Money is available for people with good credit scores – both FHA financing with 3.5% down, and conventional loans.  For veterans, VA loans are available and anyone PCSing to Davis Monthan Air Force Base for a tour should definitely consider a VA loan to purchase a home. 

    The areas which seem to be hit the most are the master planned communities. These are the areas which grew rapidly and the areas where new home subdividers/builders had relationships with lenders such as Countrywide and offered zero down loans, option arms, 80/20 loans with the 20% being adjustable. These are the areas where “creative financing” reigned supreme.

    People flocked when builders held lotteries for lots, potential homeowners camped out to get a lot.   It was a feeding frenzy.   The media lapped it up.  These too were the areas where prices jumped thousands of dollars in a week during the heyday of the boom.   Prices changed from morning to evening.  I had a client with a price point of $140,000 and we went to a new home subdivision, and when we walked out, I said “let’s look at a resale”.  And now these are the areas where homeowners are experiencing negative equity, where foreclosures are rampant, and where people are walking away.   My client is just about even in his resale home.

    Homeowners are not the only ones hurt in this market.   Subdividers and home builders are also feeling the pain.  People considering a new home should check with the Arizona Department of Real Estate to make sure the builder is not in financial distress.

    If possible, any earnest money deposit should be put in a neutral escrow.  If the house for some reason is not finished or does not close escrow, the home buyer can petition the escrow company through his or her real estate agent, to have the earnest money returned.  Generally the earnest money in a new home subdivision, goes to the builder and is used as working capital.  If the builder goes under, the buyer loses the earnest money.  It is prudent to remember that with new home construction, real estate agents have difficulty altering the builder contracts which are written by a bevy of contract attorneys.  Err on the side of caution…and if the builder balks, walk away!  Don’t forget, builders are hungry these days and if they feel the financial position is sound, a neutral escrow should be fine.

   These are not times to try and save on a real estate commission, especially if you do not know how to navigate the desert.  Sign a buyer’s broker agreement and agree to pay your agent whatever percentage if it is not being paid by the seller.   Find yourself a good real estate agent who knows what is transpiring and who is not afraid to holler in your behalf.  You need representation, especially in this market.  Remember a California dollar and a New York dollar are not the same as a Tucson dollar.  They may be worth the same amount, but they don’t buy the same goods and services!

Call me at 520-884-7201, leave a message if there is no answer.  If you need a good agent in any other part of the country, I can help you with that too.  You can also e mail me at terry@terrybishop.com

    There are all kinds of bargains out there…I sold a two bedroom, two bath townhouse for $37,000!  This is rare, but possible.  I sold a townhouse in the Catalina Foothills for $275,000 which would have sold for $450,000 a few years ago…but patience was the price…it took nearly five months to close escrow.  This is a buyer’s market, but only if you know the pitfalls, the time frames, and the costs.  Rely upon your Realtor.

 Resources:

Arizona Department of Real Estate:

 http://www.re.state.az.us/INFO_FOR/CONSUMERS.html

 http://159.87.254.2/publicdatabase/SearchDevelopments.aspx

Tomorrow:  Numbers

  Rather than trying to give each month since January 2009 a blog page, I am going to attempt to try and combine all six months so that you, the reader, can discern some type of trend.  This may take a few blogging days.

    I’ve had a bit of a hiatus from blogging, and if truth be told, I miss it.  But I stopped blogging in January/February.  I became paralyzed and found myself unable to do much of anything …  oh I took real estate classes, and was not literally paralyzed, but I was in a real blue funk, as if something had sucked the joie de vivre from my innards.  

   Needing to get out of this melancholy, I finally realized the root and the extent of my problem.  Congress was trying to get the stimlus bill passed … that bill which was suppose to be a panacea to the problems of the economy…but seems to be ladened with pork…GM and Chrysler were in the throes of financial crisis. Much had been made of the bonuses to AIG, and then the powers that be gave Fannie Mae and Freddie Mac bonuses far in excess of those to AIG…and everyplace there was news, there was a comparision to the Great Depression.  Barney Frank and Chis Dodd paraded pompously in front of the cameras with their “just so”  hair, seemingly oblivious to the true impact of what they had orchestrated years earlier.  Connect the dots and cause and effect are not a part of their thought processes.

  The sound bites were inane…the people writing about the Great Depression did not have much of a background in economics, they seemed to parrot what the members of the House and Senate desired.  The kicker was the more than 1200 page stimulus bill which no members of Congress read…but upon which they voted.   I didn’t think that this was democracy as I believed…I didn’t think it was responsible government. 

     It was pandering to the whims of lobbyism and I understand that lobbyism will go on ad infinitum…as soon as people get elected to the House or the Senate, they begin filling their war chest for the next run…and so we don’t necessarily have thoughtful government…we have goverment based upon what interest group  can pony up the most cash…or so it seems to me. 

   And so I did the only sane thing I could…I stopped reading the newspaper and I turned off the news.  Alas, it saddens me but at every instance, I will tell people, look beyond the sound bites…the press releases, and think for yourself.  Don’t believe everything you read or hear…not that I did.  But I suddenly realized what an impact the news has upon people…and how important little gestures are in getting to the truth…and so I am blogging again…about Tucson, about real estate…and maybe once and a while, a tangent like this!