The Tucson Real Estate Market is rousing from a deep sleep and January statistics show that Tucson  properties are beginning to catch the up wave. 

    The median sales price for a home in Tucson has risen $6,000 from $154,000 in December to $160,000 in January.  This represents a 3.90% increase in value although the average listing price has decreased from $211,281 in December to $210,592 in January. a decrease of a little more than .03%.  However, the average sales price rose $3.00 from 201,216 in December to $201,219 in January.

    This is significant because many buyers closed escrow prior to November 30 so they could take advantage of the $8,000 tax credit.  Tax consequences also propelled people to close escrow on a property prior to December 31.  Pending sales are up 36.36% to 1155 properties as opposed to 847 in December.  Significantly, the pending sales increased 22.74% year over year from January 2009.  This bodes well for the Tucson market. 

    January usually sees more properties coming on the market, as is the case this year when 6,618 properties are actively listed, up from 6130 in December, but down from last January’s numbers by 12.13%.  This is a good sign for inventory.  

   The most new listings are in the Northwest with 663, also an area where there are several master planned communities where extensive building occurred during the first decade of the 2000’s.  The central area has 306 new listings, and the North which encompasses the Catalina Foothills brought 268 new listings to the marketplace.  This corresponds with the numbers of total listings for those areas:  Northwest, 1772; Central, 822; and north 713 properties on the market.

    These numbers transfer to the percentage of sales in each of the areas during January.  The Northwest accounted for 29.67% of total sales volume in January; the north accounted for 18.25% and the central area,7.55%.  These three areas accounted for sales in more than 65% of the Tucson real estate market in January.

   However, relative to the numbers of properties on the market, 27.05% of all properties listed in the south, sold.  The average sales price is lower and reflects in dollar volume.  The southwest, which also has master planned communities, had 27.05% of properties in the 85746 zip code and 21.28% of the properties listed in the 85757 zip code sold.  This includes Midvale Park area and Star Valley.  the southeast, which includes the Del Lago master planned communities had 23.65% of the listed properties sold.

   The price range which is most active is the $200,000 to $249,999 range.  A three bedroom two bath home is the most popoular model sold.

   The number of days on the market for all areas has remained steady at 73 days for November, December and January.  The majority of people are financing with a conventional loan (248) and then cash (208).  Cash buyers may include some winter visitors as well as investors.  175 buyers preferred FHA financing and 56 buyers took advantage of their VA benefits.  Buyers paid 95.55% of the list price of the home, on average.  This is the list price of the home at the time of purchase and does not reflect price reductions or changes of agents.

    A full report is available on the Tucson Association of Realtors website listed below.  Another link provided below accesses the map which delineates the various areas of the Tucson Multiple Listing service.

    if you need help searching for properties or understanding the Tucson marketplace, contact me at terry@terrybishop.com

Tucson Multiple Listing Service January statistics:

 http://www.tucsonrealtors.org/statistics.html

Tucson Multiple Listing Service area map:

http://www.tarmls.com/pdfs/areaboundaries.pdf

So what about the nasty little pesky association fees which can add anywhere from $20 to your monthly payment to upwards to $300 or more.  Most master planned communities have association fees as do many Active Adult communities, and of course gated communities.

When purchasing a property, remember that Association Fees go up, they very very rarely come down.  Every $6.00 at a 6% interest rate for 30 years can buy another $1,000 in property.  So if the Association fee is $180 a month, a home $30,000 more than the home being considered -without an association fee - costs the same amount.

People often want the convenience and ammenities of a home which has an Association fee.   But there are others, such as home owners who purchase to have a property to go to in the winter months, who may not want to pay an association fee year round.  For the price of the Association fee, a gardener can be hired, and remember, here in Tucson, we don’t mow grass, we rake rocks.  Hiring someone to come by once or twice a month to check on the property and trim up the landscaping may be less expensive. 

Checking the ammenities offered in a community with an Association fee is an easy task, especially with the help of a Realtor.  Some subdivisions are golf course communities, some have heated pools and other have pools, some subdivisions have a rec center and exercise room with new equipment, pool tables, card rooms, cooking classes, bocci, weekly get togethers, and common areas which allow for walking with one’s dog.  Take note of what is being offered and run cost comparisions about the different areas.

If there is an Associaiton, the Realtor should check the budget of the Association and determine there are no major capital improvements about to come due, such as a renovation of the Rec Center.  An assessment may be placed on all owners so funds are available for the project.  Ascertaining there are no lawsuits is also prudent.  A buyer doesn’t want to purchase in a new community and immediately get dunned  with addiitonal levies.

Some associations will tend to the landscape of the front yard but not the back yard.  Check to make sure what is included in the fees.  In Townhome communities or condos, often utilities  are included.  When computing the fee, estimate the dollar amount exterior insurance, water,  and electric would be , then deduct that from the fee to get a more realistic number. The homeowner has to pay utilities anyways; paying the fee may be beneficial.

Determine what is offered with the fee, and then judge the property accordingly.

When trying to decide whether or not to move to an active adult community, several personal behaviors should be considered.  Many people believe they should move to an Active Adult community because it means “immediate friends”. 

Moving from an established community where long term relationships had formed through neighborhoods, places of worship, or careers, to an area which is new and different, but where  the climate is beneficial can be daunting.   Many people feel the best option is an Active Adult Community,

Tucson and Pima County certainly have an abundance of Active Adult Communities; some are golf course communities, and some are not.  It is imporatnt for people who are retiring to think about what kind of life style they desire in their retirement years.

There is the classic view of retirement…sunshine, leisurely breakfasts, clubhouse, going to the green for a round of golf, a late lunch, jawing with new found friends, then home to do a few chores and get ready for friends and cocktail hour.   The brochures project this, bur rather than golf, there may be substituted an exercise room, exercise instructors, aerobic swimming classes.  

The question I pose to you…what is it that you want to do when you are retired? 

This is not an easy question to answer.  

The automatic reaction is “to do the things I’ve always wanted to do” and an active adult community, when reading the brochure, provides easy answers to thing you think you might want to do.

But let’s say you decide to live in town rather than an Active Adult Community on the outskirts, you are close to world class restarurants, many live theaters, The University of Arizona and classes offered to Senior Citizens, close to crafts and recreational programs offered by Pima County and the City of Tucson, close to a Pima College branch to take exercise classes, or classes in a foreign language, social sciences, science, mathematics, or an abundance of informational fun classes. 

Buyers should think about what they want in retirement community before they buy.  Buying the image will not satisfy.  Often buying the tried and true is the most satisfiying and can be kinder on the pocketbook because association fees may be much less.

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With today’s technology, people often begin their search for a new home on line, using any of a number of websites as well as google earth, or web sites of individual agents.  Many agents have IDX (internet data exchange) links on their sites so that people interested in real estate can input criteria, then a list of homes which meet that criteria appears.

To see an idx site, check my web site at:  http://www.terrybishop.com .  Clicking on the “Search Property” buttom in the upper right corner brings up a new page.  The left side of the page has a button titled “Search MLS/IDX” .   Clicking on that button brings up the IDX for the Tucson Multiple Listing Service.

Very often buyers think they know what they want, but when they actually look at property, their criteria changes.  However, there are some questions one can ask oneself to determine some basic guidelines:

     How many bedrooms?     Is one bedroom being used  as an office?    Or are there  “his” and “hers” offices?  This is the difference between a two bedroom home and a four bedroom home.

    What type of entertaining?  Formally with a dining room, or casually with a great room, or outdoor entertaining?  If the buyer is coming from a cold wintry state, the idea of entertaining outdoors year round probably is an anomaly.  This has implications for the type of yard and proximity to neighbors.  Having a rousing barbecue with several friends, in conjunction with the game on tv, may not make Mildred next door an endeared neighbor.   Entertainment needs govern lot size and lot configuration.

    Are children or grandchildren staying for long periods of time?  Watch the CC and R’s, covenants, codes and restrictions. to make sure children under a certain age can visit for long periods of time.

  Are medical concerns a priority?  Distance to the VA Hospital or other medical facility is an important consideration since Tucson/Pima County  is a vast area encompassing a 40 mile by 40 mile area.  Geographic location will be a prirority.  

    And what about houses of worship?  Places to take classes such as Pima Community College or the U of A, or parks and recreation facilities.  Is golf important, or just an inkling in the back of the mind?  A golfer who likes different challenging courses doesn’t need to live on a golf course or in a golf course community, but someone who plays golf religiously on the same course might find a golf course home of paramount importance.

    The New York Times Style Magazine carried an interesting article about Tucson a few days ago which gives a capsule view.  Check it out at:                                   http://travel.nytimes.com/2010/01/03/travel/03hours.html?

Tomorrow: Active Adult Communities vs regular communities.

   If you have any topics you, my reader, have any topics about which you would like me to write, please comment and let me know.

     Charles Dickens sums up my sentiments of this past decade, the start of the twenty first century succinctly in Chapter One of A Tale of Two Cities.

       “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way”

   So it has been with the gyrations of the real estate market, especially here in Tucson where property values soared more than 45% in less than three years, where people could buy a $400,000 home with no money down.  The Light shone upon all…and then it came wickedly crashing down to the season of Darkness.

      But now, people are acclimating to what is occurring in this market. Sellers desiring to move on to other places know that the price they get for their home is not the price they would have commanded in 2006…but then what they are paying for their new accommodations is substantially less than 2006 pricing.  A degree of Realism has set in.

    Snowbirds, arriving daily to escape shoveling snow, scrapping sheets of ice from car windows, slip sliding on black ice, or desiring just to get away from bone chilling temperatures and get warm, have a plethora of homes from which to choose, in all price ranges, and substantially lower in price than last year.

    Communities throughout the county have homes which are in distress.  Potential buyers should look for a Realtor who is knowledgeable about short sale and foreclosure properties as well as an agent who understands resale and new home construction transactions.  Checking the credentials of potential agents and insuring that agent is a Realtor should be the first order of business.  A Realtor abides by the code of conduct and ethics set forth by the National Association of Realtors.  Not all real estate agents are Realtors.

Tomorrow:  Looking for a Tucson home

     Many out of town people come to Tucson with the idea of purchasing property.  In today’s real estate market, they can cherry pick amongst bargain properties.  But now, with new requirements set forth by lending institutions and the federal government, a little planning goes a long way.

    From the comfort of one’s home in Anytown, USA, a future Tucson resident can use the websites provided by local lenders to apply for home loans.   It should be emphasized, local lenders, regardless of where you are moving, are the people who know and understand the quirks of the marketplace.   If  applying for a loan in Tucson, the lender in upstate New York has no idea what our market conditions are, nor should he/she be expected to know.  Conversely, a lender in Tucson does not know the market in upstate New York.  

    Many of the lenders advertised on television or the internet do not know the local market.  They sit in a huge room with a computer screen and sometimes the borrower does not even talk with the same person twice.  This may not be true for all internet and lenders advertised on television, but real estate agents have a bevy of horror stories because these lenders do not know or understand Arizona law.

    Using local lenders, (three are provided below) and talking with a Realtor who can make initial contact with these lenders, will get you the very best service.  A pre approval and  LSR (Loan Status Report) for the Realtor prior to looking at property, will insure the buyer of being able to make an offer without delay.

    A LSR is required for all offers.  This tells the seller and the seller’s agent, that the buyer has been preapproved for the loan requested and that the buyer has talked with a lender and provided the lender initial data requested.  Unless financial conditions dramatically change, the buyer should be able to consumate the transaction.  The purpose of the LSR is to prevent people from making offers on properties, (and tying up properties from future potential buyers) , which the original buyer cannot afford.

    While in the armchair comfort of home, the newcomer to Tucson can determine what documents will be needed by the lender and can either fax or mail copies of those documents.   Being pre approved streamlines the entire process, and in a market where interest rates jump from day to day, or from morning the afternoon, plus the new lending requirements regarding time frames and disclosures by lenders to the borrower, the soon to be new Tucson resident, sits in the cat bird’s seat.

Lenders:

Lance Dickson Nova Home Loans    http://www.lancedickson.com

Tom Heath   http://www.theheathteam.com

Jerry Sundt    http://www.sundtmortgagegroup.com

Realtor:    http://www.terrybishop.com  

                e-mail:  terry@terrybishop.com

   We have been working for a few weeks now trying to determine what type of property to purchase…single family, duplex, home with a guest house…for an investment property.   Trying to sort out what is most advantageous for a new investor is not always easy since there are so many things to consider. 

   What area?

   What type of property?  A property= high end;  B property=middle of the road; or C property= lower end.

    What price range?

    Who is the audience to whom the rental is targeted?

    Laying the appropriate groundwork is paramount to success; understanding the accounting when one owns rental property; understanding the advantages of a 1031 tax deferred exchange;  deciding whether to form an LLC,  all are important considerations.   This means talking with professionals; the accountant, the facilitator for information, and possibly an attorney.  Formulating some type of long term plan with short term goals so we are all on the same page regarding the map to success comes next.

   But in the meantime, we have been looking at various types of property to familiarize my client with the maket.  There seemed to be plenty of potential candidates for purchase on the market a month or so ago, but suddenly, she said, everything she liked has a contract on it.

   The real estate market is definitely stirring.  Properties priced correctly and which show well are not languishing on the market as they were a few months ago.   Second homes and retirement homes are showing signs of life.  Adding steam to the market is Tucson’s AARP designation as the number one place to live which is both an affordable and desirable retirement area.

    Real estate prices are still low, interest rates remain below 6%, and although requirements for loans have tightened somewhat, money is available.  People are putting their homes on the market, there still is an abundance of short sales and foreclosure properties, and savy investors are purchasing properties on the steps of the courthouse.

   A good cross section of housing is available and Tucson remains a buyer’s market.   It is time to scoop up there bargains because this market will not last.   It always boils down to supply and demand.  

   If you are thinking Tucson, now is the time to act.  Use a local lender who knows and understands our market here, and a good Realtor who listens to your needs and wants.  Take a look at my web site to garner information which will help you as well as provide the opportunity to input your own criteria and see what is out there, and if you don’t have a Realtor now, contact me.  I am always willing to help! 

   Take the comments of my client seriously…”all the good properties suddenly have contracts on them!”

Lenders:

Lance Dickson -  Nova Home Loans -  http://www.lancedickson.com

Tom Heath - The Heath Team   - http://www.theheathteam.com

Jerry Sundt - VIP Mortgage http://www.sundtmortgage.com

Realtor:    Terry Bishop  http://www.terrybishop.com

AARP has named Tucson the number one place to live for the “active adult” community, alias the “mature adult”  community.  Looking to a simple life, Tucson garnered top kudos over all other places in the nation.

And indeed, Tucson is a grand place to live.  I willingly traded months of  grey, drizzly weather…and shoveling snow for a couple of months of “dry heat”.   Early mornings are perfect for a meandering walk and after dusk lends itself to upbeat outdoor concerts.

Tucson has integrated culture which makes it a vibrant community, blending it’s history as a part of Sonora Mexico prior to the Gadsden Purchase, with that of Native American culture, and Chinese culture. The white man found Tucson  with the advent of the railroads and brought with them new ideas of architecture, lumber, and eastern accountrements.

Tucson is rimmed with mountain ranges; the Catalinas to the north-northeast, home of the nation’s southermost ski area; the Rincons to the east; the Santa Ritas to the south, and the newest mountain range, the Tucson Mountains, to the west.   The topography is different in all the areas, but all provide interesting and diverse hiking paths and birding areas, one of the criteria of the AARP study.

Combine that with exceptional cultural activities, it’s own Symphony, a myriad of live theaters, the Center for Creative Photography which houses the Ansel Adams collection, the Tucson Museum of Art, DeGrazia Gallery in the Sun, and excellent small galleries, Tucson is making it’s name in the art and music world.  With one of the best Jazz Societies in the United States, a vibrant Blue Grass Society, Chamber Orchestras, Pops In the Park, citizens can toe tap to any rhythmn.

As someone enthusiastically once said to me, “the healthiest I’ve ever been is when I lived in Tucson”.  There are various sports activities, Senior Olympics, city owned tennis courts, golf courses galore, an assortment of classes offered by Parks and Rec, and classes in all types of activities ranging from Pilates to Weight Training to Salsa dancing at Pima Community College. 

Combined with the bragging rights of 360 days of sun, Tucson offers its inhabitants low cost activities, the beauty of the desert, affordable housing in comfortable communities, local produce at Farmer’s Markets, a plethora of volunteer activities, and excceptional medical facilities.  (Scan previous blogs for information about the St. Philip’s Farmer’s Market, and a series about hospitals in the Tucson area.)

AARP really nailed it correctly!  Tucson is the place to live!

Resources:

Tucson Convention and Visitors Bureau:      

http://www.visittucson.org/

Tucson Chamber of Commerce:

http://www.tucsonchamber.org/

 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.