The Tucson real estate market is experiencing some steam with an increase of 23.08% in volume from $130,258,440 in January 2011 to the $160,319,228 in February 2011. This number is about $15,000,000 higher than February 2010.

Are we out of the woods yet?

The average sales price increased 9.22% from January 2011 to February of 2011;  $166,998 to $182,388 in February, but still short of the 2010 numbers which were $201,219 in January 2010 and $195,996 in February 2010.

The average list price increased 8.43% from $177,036 in January 2011 to $191,957 in February 2011.  This compares to $201,219 in January 2010 and $206,843 in February 2010 .

The median sales price in February 2011 is $137,000 a decrease from February 2010 of $13,000 ($150,000) but an increase from January 2011 from $134,250 or 2.05%. The median sales price in January 2010 was $160,000.

A total of 2,272 properties were under contract at the end of February 2011, an increase of 60.34% from February 2010 when only 1,417 were under contract.  This is a 12.87%  increase  in February 2011 from January 2011 when 2,013 properties were under contract.  This compares to January 2010 when only 1,155 properties were under contract.

Total sales units in February were 879 compared to January 2011 when 780 were sold, an increase of 12.69%.  This is more than January 2010 when 712 units were sold and 741 in February 2010.

The numbers of new listings too have declined which may bode well for the Tucson market, maybe signaling that inventory is decreasing.  February new listings total 1,487 as compared to 1,949 in January and 2,104 in February 2010 and 2,424 in February 2010. The month over month 2011 decrease is 23.70%, a substantial number.

Active listings have declined from January when 7,147 properties were listed, and February numbers of 6,947 active listings, down 2.80%.  This is still higher though than 2010 numbers when 6,739 properties were listed in February and 6,618 in January 2010.

The area with the greatest number of properties on the market is the Northwest with 1772 active listings.  This is followed by the Central area with 869 properties for sale and the North Catalina Foothills areas with 727.  Only 17 properties are available in the extreme Northeast.

Looking at price points, the majority of homes sell between $100,000 and $159,999.   Running the gamut however, Tucson has 44 active properties priced at $29,999 or lower and at the other end of the spectrum, 194 properties price at $1,000,000 or higher.

The average number of days to sell a home in Tucson is 107 days.  The extreme Northwest properties sell in an average of 51 days while the northeast properties take 130 days.

The majority of people are paying cash for their real estate purchases (336), followed by Conventional loans (251) and then FHA financing (195).  VA loans totaled only 55.  The cash purchases may be reflective of the fact investors are active in Tucson.  Resort and second home buyers are also cashing in on the “bargains” here and many second home buyers also pay cash.

Prices are similar to the end of 2003 and the first month of 2004.  As Marshall Vest, Chief Economist at the Eller School of Management at the University of Arizona told the industry at the Economic Summit, “buy all you can buy, hold it for five years, and make a killing!”

Resources:

http://www.tucsonrealtors.org/tar-v2/statsFeb2011.pdf

“We live in a beautiful part of the state, we have incredible weather, and our issues are unique” Gilbert Davidson, Town Manager of Marana told a gather of Realtors® at the Tucson Association of Realtors® Economic Summit, last week.

Marana has higher sales revenues, projected to be up 5.3% through the first half of 2011 over the same period in 2010.  But the town does have budgetary concerns and is trying to cut back on programs which do not impact the long term growth of Marana.

Additionally, there is some building of new single family homes in Marana.  A total of 343 building permits for single family homes were issued in 2010, an average of 28 homes a month. Comparatively, a total of 75 building permits were issued in 2000.    Certificates of Occupancy totaled 42 in 2010.

The Twin Peaks Interchange, now opened, provides a commercial corridor and runs from I-10 to Dove Mountain. “It is the gateway to the Ritz Carlton”, Gilbertson said.  There is ongoing home building as part of the Ritz project.

With the assistance of Congresswoman Gabriel Giffords, Marana secured a federal government grant and built the 70,000 square foot LEEDS certified Marana Health Center.  It is located near the government offices.

Sargent Aerospace and Defense has expanded facilities in Marana and provides jobs.  “The University of Arizona is a gigantic economic engine” and Marana is looking to workforce connections and internships. “We must support the University,” Gilbertson urged.   Marana is a business friendly community and is courting business especially with U of A partnerships.

Marana hosts top PGA players from throughout the world February 21 through February 27 for Accenture Match Play.  The PGA tournament is televised to more than 200 countries.  Marana is on display to the world and Match Play is a tremendous advertising vehicle for Marana and southern Arizona.

Resources:

Marana Health Center

http://maranahealthcenter.org/

Sargent Aerospace and Defense

http://www.azbiz.com/articles/2010/06/23/news/doc4c222c7d7edf0983802864.txt

Accenture Match Play

http://www.pgatour.com/tournaments/r470/

Town of Marana

http://www.marana.com/

With five new town Council members, fresh priorities are focusing on being a “business friendly” community, Jerene Watson, Town Manager of Oro Valley,  told the Tucson Association of Realtors Summit last week.

Two economic development summits resulted in the town’s ability to knock off a year in the development and permitting process.  “We are open for business and are continuously reaching out” to entice business to the community.

Ventana Roche is bringing 500 new jobs to OroValley and the town is courting new corporations in the bioscience, high tech and educational areas, Watson said.

The University of Arizona Bio 5 Oro Valley opened and is a research arm, developing potential new medicines.  Basis Charter School Oro Valleyhas students and took only five months with the new approved development plans.  Additionally Pima College Oro Valley campus is operational.

Private/public partnerships are being explored for potential leases of town owned property which will benefit the residents. Focus is on arts, recreation, and culture.  The Town Center development will offer incentives for potential entertainment or businesses and county bike and pedestrian trails provide recreational facilities for residents.

Like the other town managers at the summit, Watson said general fund revenues are down 20%.  Oro Valley does not have a property tax, but relies upon the sales tax.  Single family residential building permits decreased to 50 is fiscal year 2010 compared to 285 in 2008.  This represents a 50% drop in construction sales tax.  The construction sales tax was 40% of the budget and is now at 19%.  Belt tightening is the order of the day.

Unlike federal and state governments, towns cannot resort to gimmicks and tricks and need to come in with a balanced budget.  The town has courted new business to bring in local sales tax revenues.  Financial dash boards are on the website, she said.

The town is also looking at strategic annexation, and in particular 14 acres to the north bordering state land.

“We are positioning Oro Valley as a desired place to live and raise a family” she concluded.

Resources:

Town of Oro Valley:

http://www.orovalleyaz.gov

Basis School:

http://explorernews.com/news/pima_pinal/article_60ac0118-a8bb-51fb-b398-ae2e58cfbfb0.html

Bio 5:

http://azstarnet.com/news/local/education/college/article_eed8d524-3c78-5c71-8108-f94ede670c85.html

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.

Resources: http://www.ci.sahuarita.az.us/

http://www.pecanstore.com/Aboutus.asp

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.

Traveling to another state gets us out of our routine, but for fellow out of state Toastmasters out there, Arizona has many Toastmasters’ clubs.  Guests are heartily welcomed.   It’s a great way to meet people and get their take on the Grand Canyon state, what they like and what they don’t.

Taking advantage of attending a meeting such as Toastmasters offers the opportunity to chat with people and get the locals’ perspective on the area.  Formulating a list of questions may be a good idea such as:    Where would you buy a property if you were buying today?  Where would you definitely not buy?   How is the traffic to get to xyz place?  Is there anything you think I should be aware of such as new building, roadway expansion, commercial development coming soon?  How is the crime in this area?  What about drugs?

Real estate agents must be careful answering questions such as these so they are not guilty of steering.  But asking locals such questions is perfectly permissible.  Getting the “take” of area from a cross section of the area’s residents, rather than residents who just live in that particular subdivision, may provide a more realistic viewpoint.  People who live in a specific subdivision will paint the picture brightly and  may not talk about any “downside” to the neighborhood.

An agent can refer buyers to websites such as the crime site or sex offenders site, but this may not give the information a buyer desires to make an informed decision.

Taking an hour or two to attend a local Toastmasters meeting, Rotary, Lions Club, or place of worship with the intent of talking with people who live in the area can reap big rewards.  A buyer may find information which the Realtor® does not know.

The added benefit is discovering local haunts, “good hole in the wall restaurants” which can’t afford to advertise in the slick magazines, places to see which may be out of the way, or a local event which is not well advertised.

If you are thinking about a trip to a locale where you are considering purchasing a home, go that extra step, attend a meeting and ask questions!

An 11.36% increase in Tucson, Arizona homes sold during August statistically illustrates positive movement in the real estate market, and coupled with a decline in inventory of 21.82% and an increase of 39.19% of total listings under contract, the figures demonstrate the numbers of homes on the market in Tucson is decreasing.

This is good for the real estate market. In July 990 homes went under contract and in August 1,378 had contracts. A total of 792 homes were sold in July and 882 or 11.36% more homes sold in August. The median sales price inched up $750.00 from $150,000 to $150,750. and the number of new listings decreased from 1861 in July to the August total of 1,455. However, the total of active listings rose to 7,180 from 6,668 or 7.53% reflecting spillover inventory.

Looking at the percentage of homes sold in each zip code, the areas with more than 20% of homes sold include the downtown area with 23.33% where 7 out of 30 active properties sold; 85746, the southwest area which includes Midvale Park, where 24.86% of the properties sold or 45 out of 181 properties, and 85738, Catalina, where 100% of the properties sold or 1 out of 1 listing.

The Northwest area of town has the most properties on the market with 1,826 homes for sale. During August, 219 homes sold. That is followed by the central area of town which includes the University area, with 921 homes on the market and 102 sold in August. Rounding out the top three is the North section of town which includes the Catalina Foothills with 676 properties on the market and only 69 sold during August.

Price wise, the properties between $120,000 and $250,000 had the most sold and also accounted for the most inventory. Less than 10% of the properties priced above $250,000 were sold in August.

Types of financing were nearly evenly split between FHA loans which 242 buyers selected, conventional loans for which 275 buyers opted, and 245 buyers elected to pay cash. The remaining financing was split between VA loans, owner carry backs, cash to loan and other types of financing.

The average sales price decreased 2.9% from $192,072 in July to $186,562 in August while the median sales price increased about one half of one percent to $150,750.
The average number of days in the market increased by four days to 91 from 87. West side homes took the longest to sell on average at 114 days, while the extreme northeast only took an average of 59 days.

When looking to purchase or sell property, studying the statistical data can give you insight as to how long it may take to sell property and where the price points are located for people looking to purchase property. It also shows up/down movement in the market. Make sure you have the latest Multiple Listing Monthly Statistics to help you make a good decision and ask your Realtor® to help you interpret the data for your specific need.

Resources:
Tucson Association of Realtors August 2010 Monthly Statistical Report:
http://tucsonrealtors.org/tar-v2/aug10.pdf

There are plenty of active adult community properties for sale in Tucson less than $200,000. This is the time to look at your southwest sunbelt home. Check properties now while you still have the best pickings…before the majority of winter visitors arrive.   Enjoy January through April here in beautiful Tucson while your neighbors shovel snow, dig out their car, and bundle up in winter gear just to go to the store.

The price of property in Tucson is at 2003 levels and interest rates are at a historical low. This equation equals an opportunistic time for people who always coveted a retirement home or second home in the southwest sunbelt to purchase that dream.

Tucson and the surrounding area is home to several active adult communities and homes in these areas have decreased in price.   Prices are down 15 to 25% from three years ago.

In the entire Tucson Multiple Listing Service, 91 properties sold during the past three months (since June 22, 2010) in active adult communities at an average list price of $262,873 and an average sale price of $248,302.

That is an approximate 5.5% discount to list price. The median asking price is $249,000 and the sale price was $230,000 or a 7.6% discount to list. And the low price was $92,800 with the sale price of $92,000 or a .08% discount to list. The high end property which sold during the past three months, had an asking price of $599,000 with a sale price of $569,000 or a 5.0% discount to list.

Currently, as of this morning, there are 460 properties in active adult communities on the market, four of which are more than $1,000,000. The average price of those properties is $297,942 but of this total, 45 properties are $500,000 or above skewing the average prices upwards. The median price is $249,700, the low price is $52,500 and the high price is $2,800,000.

Most people seeking an active adult community will be purchasing property below $500,000 and the 415 properties on the market have an average price of $251,827, with a median price of $239,000, a low price of $52,500, and the high price of $499,900. These are asking prices.

Using the discount to list price during the past three months of 5.5%, one may be able to purchase an average active adult community property for about $237,000 if we use the entire domain of properties to $500,000.

To use an old cliché, “the early bird catches the worm”. For more information about Tucson active adult communities, contact me, terry@terrybishop.com for more information and a relocation package.

So, what is my property worth anyway? Is the market up or is the market down?  Whom are we to believe?

It seems as if you can take your pick of economists to whom you listen. Some say we are coming out of the doldrums. The big announcement today said the recession ended in June…and yet other economists say the other shoe is yet to drop, they foresee another 18% drop in home prices.

Part of it is political, it’s almost believe what you want to believe at your own peril. Caveat emptor prevails!

That leaves the home seller/homebuyer in a real quandary. Don’t believe the national media, they are slanted to whatever political perspective they subscribe. The markets are regional, areas which did not see the escalating increases in prices between 2003 and 2008 and remained fairly stable, are still stable.

Areas like Arizona which saw a 45% plus overall increase in housing prices within three years are still reeling from the deflationary impact.

But, there are parts of Arizona, and in particular Tucson, (which is the market I serve) that are harder hit than other areas.

In order to truly value a home, one has to look at what is happening locally, and that is by zip code, and sometimes by subdivision. Those subdivisions which faced overbuilding during the frothy times of 2003-2008 are in far worse shape than areas where homes are older and do not turn over rapidly.

I took the better part of an afternoon to compute the numbers of bank owned properties and the numbers of short sales in every Tucson zip code as of August 30, 2010. I then computed the percentages of each and the combined percentages and found that more than 50% of the homes on the market in some zip codes are distressed properties.

Generally these are places where large master planned communities were being built; Gladden Farms, Star Valley, Rancho Del Lago, Sahuarita, Quail Creek, the Irvington Road/Escalante area, Cortaro Farms near the highway, and Corona de Tucson.

And there are areas where there are less than 20% of the properties in distress; the 85704 area which includes some of Oro Valley and the Casas Adobes area, the center of town near the university in 85716 and 85719, the Diamond Bell Ranch area, Saddlebrook and Catalina,  Mount Lemmon,a portion of the Catalina Foothills, some of Green Valley, and the prize goes to 85646, Tubac with only 7.143% of the homes underwater.

When you are pricing your home to sell, make sure your Realtor® knows the numbers and knows the trend in the area in which you live. I priced three homes today and pulled the numbers from the last six months for the zip code. The pricing differential in all three areas was significantly different. One was in 85747 where 43% of the homes are distressed; one was in 85704 where 19.5% of the homes are underwater, and one was in 85745 where nearly 35% of the homes have problems.

You as the buyer and or seller need to know this because the appraiser is obligated to take distressed properties into consideration when appraising your property.  As someone once said, “the distressed property in this area is the market” and unfortunately everyone suffers whether or not they are in the same predicament.

    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