Archive for January, 2011

Tucson Realtors Hear Jim Stahle, Manager of Sahuarita at Summit…

Monday, January 31st, 2011

The four managers of the towns in Pima County spoke Thursday to the Tucson Association of Realtors® (TAR) with a prognosis of what growth is anticipated in each of the areas.

“Sahuarita is contending with today’s reality and planning for the future” said Jim Stahle, City Manager of Sahuarita, a town which experienced a growth of 9000 houses, with one half of this building in Rancho Sahuarita.

A total of 1700 housing permits were issued in 2006 and in 2010, only 311 permits issued, the same as 2001, he said. Quail Creek, a Robson active adult community, has seen 18% of those building permits.

Sahuarita has cut budgets, cut staff and is making tough decisions in order to maintain the service levels.  As a result, the town has become more efficient.

Challenges facing the new town include a commercial Community Facilities District (CFD), the cost of  which would be shared with developers.

Development is projected in the Rancho Sahuarita Town District which is ideally located between I-19 and Sahuarita Road, Stahle said.

The town conducted a psychographics analysis trying to determine what people would buy in such an area.

Determining if Sahuarita  will “get into the water business” or if water will remain under the purview of private business is another issue facing the town.  If the town decides to purchase the water company, the issue is how to structure the purchase, the fact it will then be subjected to state regulation, and how the town will pay for the water company, now in private hands.

Farmers Investment Company (FIC), the largest pecan grower in the nation, located in Sahuarita, has 6,000 to 7,000 acres it is eyeing for development in the future, possibly 15 to 50 years.  Much of the land is located in a flood plain zone.  Projected growth will impact the river management plan and the master plan. The town and FIC are working together for planned growth and development.

Sahuarita is looking for opportunities to attract well paying jobs, and is identifying areas which are capable of landing employment.  It also, like the other three towns, is considering annexation of adjacent areas.


Investor Activity is Up Says Marshall Vest, U of A Economist

Saturday, January 29th, 2011

“How can you afford not to buy a house now?  Just hold it for five years and you’ll make a killing,”  Marshall Vest, Chief Economist at the Eller School of Business, told a group of Realtors Thursday.   The investor activity in Arizona is ratcheting upwards.

Vest sees that job growth is forthcoming, “we need job growth to solve our problems in Real Estate,” he said. Unemployment in Arizona is 9.4%, in Phoenix it is 8.4% and in Tucson, 8.3%, but Yuma is 23.2%.  “We are now at the 1982 level of manufacturing and at the 1983 level in construction.”  He sees slow growth in employment during 2011 and by the second half of 2013, a recovery of jobs lost.

Additionally the local market did not see the 5-6% upswing in retail sales shared by the rest of the country, retail sales are at the lowest point, and because many of the municipals depend upon sales tax for revenue, they are finding it extremely difficult to balance their budgets.  Vest is looking at a 6 to 7% gain in retail sales this year, partially attributed to pent up demand.  He sees 2011 as much better than 2009, which he termed a “disaster” and 2010 which was better.  This will impact job growth positively.

Restaurant and Bar sales are up which is good for tourism and with the Gem and Mineral Show and Accenture Match Play around the corner, Tucson should benefit.

Credit creation is the key and will improve the mobility of people which will positively impact the absorption rate of housing statewide.  As credit expands, spending will improve which will lead to more hiring which will strengthen the housing market.  This will also help stabilize the public sector budgets.  New housing starts will increase then, but until that time, there is additional “pain”.

Vest attributed the market meltdown to the creation of subprime and Alt A paper, the securitization of housing loans to a pool of mortgages which were then sold off.  “We are now de-leveraging” from the expansion of credit and nationwide approximately 11% of all outstanding household credit is in some form of delinquency, Vest said.

Vest sees continued improvement and thinks by 2014, we should be back to “normal”, not the “new normal”.


Eller School of Business, University of Arizona

Marshall Vest sees housing continuing to improve slowly…2014 year of expansion…

Friday, January 28th, 2011

The economy is expanding, real Gross Domestic Product is up but the economy is facing some headwinds which include housing, the public sector, and the lack of mobility, said Marshall Vest,  Director of the Economic and Business Research Center at the Eller College of Business, University of Arizona.  Vest spoke Thursday at the Tucson Association of Realtors Summit.

Vest sees 2011 to 2013 as continuing to be economically better, but that expansion of the economy will not begin until 2014.  Credit is still shrinking despite fiscal and monetary policy which are at “full throttle” .   The housing and public sector will be a drag on the economy which will impact growth, and mobility rates are at a 60 year low.

On the brighter side, the economy has registered six quarters of positive growth and the GDP numbers being released today (January 28) should show growth in the 3 1/2% range.  It is anticipated the growth during the fist quarter of this year will be in the 4 1/2% range, Vest said.  (Numbers released this morning show a 3.2% GDP growth rate for the last quarter of 2010-see report in Resources below.)

Corporate profits are high and business is thinking about hiring which should ameliorate the jobs condition somewhat.

Household credit continues to decline and consumer confidence is positive compared to the last few years, “up over five full points at 60” which is still a recessionary level.   Consumers remain concerned about the value of houses and are cautious and business is still uncertain about taxes, financial regulations being considered by Congress, health care costs,  and weak demand.

Arizona has “an enormous inventory of vacant houses”, 130,000 or 4.9% of  housing when the normal vacancy is 1.5%.  The credit squeeze and the inability of people to sell houses in other areas impacts Arizona.   Half of the migrants to Arizona are from California, and California has been hard hit by economic conditions.  Vest said half of all Arizona homeowners are “upside down” .

Housing is “bumping along the bottom”; the tax credit has ended, building permits are down as are existing homes sales, home prices are down, and although foreclosures show a 4% decline from 2009, they are still high. Comparing 2005 to today, building permits are 2,000 verses 12,000; existing home sales are at an annual rate of 10,500 compared to 19,000 in 2005, and the median price in Tucson is now $140,000 and $120,000 in Phoenix.

Tomorrow: More of Marshall Vest


GDP Report January 28, 2010

What Can Statistics Tell You About The Tucson Real Estate Market?

Tuesday, January 25th, 2011

The comprehensive market reports released to the public by the Tucson Association of Realtors monthly are both fun and instructional and provide a wealth of data which can be mined with only an elementary understanding of mathematics.

Combining the data with a zip code map provides the basis of knowing where properties are selling and those which are languishing on the market.  This, in combination with absorption rates, (tomorrow’s topic) will divine where the great buys may be and where the “hot market” is currently.

If we look at areas where the greatest percentage of homes on the market sold during December, the Rita Ranch area takes the award with 27.73% of properties sold, but the 85747 zip code had only 154 homes for sale and a total of 35 sold.  Closely following is the Midvale area (85757) with 24.58% sold from a total of 118 on the market, which is 29 homes.  The 85714 area, east of Davis Monthan Air Force Base in the Irvington area had 22.86% sold, or 6 out of 35, and the area with 21.60% properties sold, or 35 out of 162 is 85756, south of Tucson International Airport east of I-10.

Now looking to the areas with the most homes available from the December statistics, there are nine zip codes with more than 250 homes actively on the market.  The Foothills-Sabino Canyon area leads the pack with 353 homes on the market (85750), closely followed by the Catalina Foothills zip code with 340 homes on the market, zip code 85718.  Many people wanted to put their home on the market but waited thinking the prices would increase.

The Green Valley area closely follows in 85714 with 292 homes for sale, followed by Corona De Tucson with 282 homes in the 85614 zip.  Both of these areas saw new construction during the mid 2000’s.   Rancho Vistoso in the 85755 area is offering 279 homes, and the Saddlebrook-Catalina area in 85739 has 270 homes on the market.  All of these areas may appeal to people looking to retire in the Tucson area or people looking for second homes.

The northwest, Lambert Lane area south of Tangerine between Cholla and Oracle in 85737, an Oro Valley zip, has 259 homes on the market.  From Golf Links north to Speedway in the 85710 zip, northeast of Davis Monthan has 258 listings, and Sahuarita, a new home subdivision area in 85629 has 252 homes on the market.

The absorption rate, which is a different statistics than discussed today is tomorrow’s topic for the various zip codes in town.  This will tell how long it may take to sell a property in a specified zip.


It’s True, Numbers Don’t Lie…Prices are Going UP!

Monday, January 24th, 2011

A contrarian doesn’t wait until national magazines and newspapers let the world know prices are on the way up.

Trend analysis is the tool used and is important for those people who want to “get in on the ground floor”.   The buy low, sell high mentality can’t wait for Time or Newsweek to announce home prices are up; by that time, the floor has risen considerably.

Sheer logic tells us this is true, think about the lead time needed for a reporter to first  realize prices are on the way up, then gather information to substantiate the claim, write the story, then the editor has to decide if this is a cover story or not…which may be a few more weeks.  Just as I am purveying this information after the fact, since prices are already on the way up, I too am late to the party!

Tucson Multiple Listing information for December 2010 shows that prices are up 3.13% from an average sales price of $180,736 in November to $186,399 in December.  The average list price of a home is up 3.04% from November, or from $191,637 to $197,457.

The median sales price remained approximately the same between November and December with a .29% decrease from $139,900 in November to $139,500 in December.

Although the total number of homes under contract in December decreased 7.37% from 1900 in November to 1760 in December, traditionally the months of November and December see fewer people putting offers on homes because of the Thanksgiving – Christmas holidays.

Yet the total sales volume rose 16.93%, an impressive amount, from $144,588,779 in November to $169,063,508 in December.  This represents an increase of 13.38% in total units sold within the Tucson Multiple Listing area, from 800 in November to 907 in December.

The holidays also see fewer people listing their homes.  Many wait until January, beginning the new year with new intentions, having put the holidays behind.  December new listings decreased 25.63% to 1,071 from 1,440 in November.   This brought the number of active listings in the Tucson Multiple Listing Service area down to 6,859 in December, which is a decrease of 7.99% over November.

New home construction prices are also on the rise.   In one subdivision I visited this weekend, prices on one model have had two increases in pricing within the last month.

Tomorrow we look at the various areas in Tucson and where the most homes are being sold…later this week we will revisit the numbers of short sales and foreclosures in the various areas.

Tucson’s Stately Saguaros Welcome You…

Thursday, January 20th, 2011

A stately saguaro in Saguaro National Momument WEst

Standing stately in Saguaro National Momument West and East are thousands of  tall heavy Saguaro cacti with their arms reaching out or towards the sky.   They are often pictured on postcards with captions like, “Welcome to Arizona” and the creamy white flowers which become a fruit are the state flower of Arizona.   The Saguaro blooms in May and June and the fruits become the basis of wine and jellies.

The Arizona Sonora Desert Museum sponsors fruit gathering outings where visitors learn how to harvest the fruit with the long and unweildy Cactus puller.  Fruit is usually harvested in the morning when it is cooler and the intensity of the desert sun is not as hot, beating down upon the workers.  The fruit can be eaten raw and is an excellent source of nutrition as are many of the cacti found in the Sonora Desert.

Birds feast on  the fruit and cactus wren, the state bird of Arizona which often nests in the Saguaro, derive much of their water source from these oblong reddish green “balls”.

The Saguaro is an amazing plant, weighing tons especially after monsoon season.   They are protected and removing them from their “home”  without proper permitting , and especially the desert is a crime.

It takes approximately 75 years for a saguaro to grow it’s first arm.   Plants like that shown are  100 years old or more.    The seeds fall or are carried by birds and bats which are abundant in the desert, and those seeds which are protected by other vegetation such as mesquite and palo verde trees are the most likely to grow and mature.  This is why one often sees a young saguaro near a willowly palo verde or lacy mesquite.

Holes and “scars” are numerous especially in an older saguaro.  These are the homes of numerous birds, bats, owls, and insects; the holes have been carved by these inhabitants to become a place to live raise their young.

It takes at least five years for a saguaro to die and the ribs of dead saguaros are used for building and for trim on furniture.   One might see part of a native home made of saguaro ribs or used as a building material, no part of the cactus is wasted.  The decaying cacti are a source of food and lodging for many beetles and insects which roam the desert.  Examination of  a decaying saguaro structure reveals an abundance of life which can only be seen close up.

The unique beauty of Saguaro National Monument is attributed in part to the regal Saguaros which dot the landscape.


Giving Back to the Community…CRS and Hearth

Wednesday, January 19th, 2011

The 23th annual Founder’s Day Luncheon, celebrated by the Arizona Certified Residential Specialists (CRS) and the Hearth Foundation, is a commemorative event open to the community at large.

Founder’s Day celebrates the founding of The Hearth Foundation by members of CRS and the Tucson Board of Realtors®.  Articles of incorporation were filed with the State of Arizona November 12, 1987 with the mission of establishing housing for homeless women 18 years of age or older with children 12 years or younger.

Since that time, Hearth has broadened its scope to include homeless women caring for children and has embraced the community at large, not just Realtors®.  Hearth supplies transitional housing as well as emergency short term housing for homeless women with children and derives its funds from fundraisers sponsored by the organization as well as donations from the public and other civic organizations.  Programs are provided by Our Family Services and New Beginnings.

CRS is an organization of Realtors®  under the auspices of the National Association of Realtors®.  Only four per cent of Realtors® hold their CRS designation, earned from both extensive continuing education as well as production, yet CRS agents account for 25% of the transactions nationwide.  CRS agents are known for their skills and knowledge which serves clients well.

In the past, the Arizona Chapter of CRS has been named national Chapter with the Heart for its support of Hearth.

Reservations for the luncheon, which begins promptly at 11:30 am, can be made at the link below.  The cost is $25 per plate.  Westward Look, a renowned Tucson resort off of Ina Road just east of Oracle, is the venue and valet parking is available.  Menu choices are available at the registration site and include:  Herb-Roasted Breast of Chicken with Prickly Pear Glaze, Garlic Mashed Potatoes and the Chef’s selection of Fresh Seasonal Sauteed Vegegtables or a Vegetarian Ravoli.    The luncheon will end promptly by 1:15 pm so attendees can get to the TAR Summit by 2 pm.  Make your reservation at:

Click here to register

The Buyer Advisory…An Excellent Resource

Tuesday, January 18th, 2011

If you are considering purchasing a home in Arizona, your agent should provide you with the Buyer Advisory, a document which is nine pages and provides information about items a person should know prior to purchasing a home.

The document, written by the Arizona Association of Realtors, is designed to allow the consumer to check  issues he/she should consider when purchasing a home.  It contains links to many websites which can answer consumer questions.

Information concerning neighborhoods is not static, changing frequently, and the Buyer Advisory is revised periodically.  The websites referenced in the Advisory also change their information frequently.

Crime statistics are important and the Advisory references the various sites in Arizona cities where these statistics can be obtained.  An agent cannot know all of these facts and the knowlegable consumer will reference the Buyer Advisory to find answers to his/her questions.

The Buyer Advisory is also a document which a homeowner can use to ascertain answers to questions he/she may have regarding where to go for tax information, zoning information, information about area schools, and the ever famous sex offender information.

If you are considering purchasing property outside of Arizona, the Buyer Advisory is an excellent guideline to questions you may have and potential places to obtain the answers in that state.

Take advantage of this resource, it is part of a buyer’s due diligence when purchasing a property.   A link to the Arizona Buyer Advisory is provided below, you may be surprised at the amount of information it contains.  Use this information for your advantage.  A knowlegable buyer is a good buyer.

Preparations underway for the Gem and Mineral Show…

Monday, January 17th, 2011

White tents dot Tucson in preparation for the Gem and Mineral ShowPPThe

The big white tents are beginning to dot the city;  from Palo Verde on the south side of town, up through the Frontage Road along I-10, to the center of town across from the Tucson Convention Center.  Preparations are underway for the Gem Mineral and Fossil Showcase.    The show, which takes over the city, brings vendors and buyers from all over the world.   Tucson truly becomes a melting pot.  Language students are in their glory!

This year’s theme is Minerals from California.    The main show at the Convention Center will feature colorful multi faceted minerals and gems from the state speculators flocked to during the gold rush.  Incidentally, Tucson was made a part of the Gadsden Purchase because it was the best route to California for those with gold rush fever.

Begun originally as a local show in 1955, the Tucson Gem and Mineral Show has grown to become the largest show in the world which other shows wish to emulate.  The Showcase has grown up around it.  Many of the “shows”  allow only professional buyers with tax identification numbers.    Buyers from throughout the world are here to buy and sell precious stones and minerals which will become part of investor collections, part of a precious piece of jewelry, or a museum item.  Millions of dollars change hands.

Hotel rooms become the bartering place including the very upscale resort hotels here in Tucson.

But the fun shows welcome the general public and the flavors represent all parts of the world.  If you spent the entire time the show is up and running, you could not see everything.  African art, beads from throughout the world, fossilized plates, huge piece of crystal, delicate rings with gemstones, diamond earrings, rugs, crystals, meteorites… on and on.   It’s an education unto itself!

Grab a comfortable pair of shoes and get ready.  The Showcase opens January 28 and will run through the second week of February.  The Gem Mineral and Fossil Show at the Convention Center opens February 1o through the 13th.  This show will dazzle, but the fun is at the many and varied Showcases in the big white tents.  And there is “show food” too, but don’t forget your bottle of water, this is after all, Tucson!

road from

In Rememberance…

Monday, January 10th, 2011

Saturday, a beautiful, sunny day in Tucson, turned  murky and dark with the events on the southeast corner of Ina and Oracle.  The shooting of the 19 people at the Safeway Shopping Center casts a pall over Tucson.

Residents, this Monday morning, continue to look at each other and  murmur about the irrationality of one man’s act which  claimed six lives and put others in jeopardy, including Congresswoman Gabrielle Giffords.

Each life, precious in it’s own right, but the death of the nine year old girl who has not even experienced “life”, is unfathomable.  And Gabe Zimmerman, always professional and polite when I’ve spoken to him,  half the age of some of the victims, about to begin life in a new chapter as a married man, leaves huge voids in the lives of those who love him.  Those victims in their 60’s, grandparents and parents, mindlessly cut down by “an unstable” person, leave a vacuum in the lives of their family and friends.

We begin our week going back to our jobs, our routines, but we will not forget the events of Saturday.  We keep the victims in our thoughts and prayers, and  appeal to the powers that be for a full recovery for those victims who survived this horrific day.