We enter the Tucson real estate market with enthusiasm, looking forward to an up year.  2013 saw prices rise more than 10% to an average list price point of $197,805 as of the end of November, and an average sales price of $191,763.

The median price point in November was 159,500; half the properties sold were less than that price and half were above that price.  A total of 15 homes were priced at $29,900 or less and one property sold for more than $1,000,000.

Tucson and Arizona in general, felt the pain of the real estate market debacle long before much of the rest of the country.  I was in a coaching program at the time with three other agents from the east coast and a coach from the northwest.  These professionals gave me the impression they believed I was just lazy because I kept talking about our market and what was occurring .  Little did they realize there was a lesson in what I was saying – far beyond laziness- and this too would hit them.

Because Arizona is a non judicial foreclosure state, which means lenders do not have to go to court in order to foreclose on a property, the shortest length of time given a lender to foreclose, is six months.  Much of the distressed property has been sold, and unless Congress reinstates the Mortgage Forgiveness Act, homeowners will be paying taxes at their marginal tax rate, on the amount of forgiveness.  This may cause people to try and work through their financial situation and wait for their home value to appreciate with the market.

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

“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”.

Resources:

Eller School of Business, University of Arizona

http://ebr.eller.arizona.edu/newsroom/video/

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

Resources:

GDP Report January 28, 2010

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

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.

Resource:

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

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.

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.

    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

The average price of a home in Tucson is down less than $4,000 since a year ago, but up more than $2,000 from November.  The average housing price, at $202,376, in Tucson is comparable to prices at the end of 2003 and the first quarter of 2004.  Likewise the median price is down from $163,000 in January 2009 to $154,262 in December, which again reflected first quarter 2004 pricing.

Looking at 2009 the numbers are:

   yearly-statistics4– (Please open for yearly statistics – click “Notify” and the page should open)

The greatest number of properties sold in the 85757 zip code where Star Valley is located as well as several other new home communities built during the boom.   A total of 42.22% of the listed  properties on the market sold. 

35.83 per cent of the properties listed in 85706 zip code sold;  an area roughly bordered by Irvington Road to the north, south to Valencia, a bit east of I-19 to just east of Benson Highway.  The area, 85746, which encompasses Ajo to the north, including the Tohono O’Odham nation, south to Pima Mine Road,  west of I-19 and east of Sandario Road, had 32.87% of active listings sold.  This includes the Midvale/Mission Road area where many homes were built in the 1980’s and later.

The area where properties are selling most rapidly is considered southwest Tucson.  Ironically beyond Sandario only 6.90% of the homes have sold, but this is also know as the Brawley Wash area and includes Three Points, aka Robles Junction. 

The greatest number of homes on the market are in Oro Valley in the 85755 zip with 244, and in the 85737 zip with 237 homes. Also in the Northwest, 85739 which includes Saddlebrook Active /Adult Community, 244 homes are on the market.

 The Catalina Foothills in 85718 has 296 homes on the market, and 85750, also foothills has 284.  Much of this is considered District 16.  Looking southeast into the Vail area which includes Rancho Del Lago, another master planned community built in the mid 2000’s, 304 homes are on the market. 

Tax credits are still available and bond money for foreclosed homes is also available, with some restrictions.  Interest rates remain low and FHA requires only 3.5% down.  In some instances, with lender own properties, there may be help for buyers to purchase foreclosed homes. 

Talk with your Realtor and ask what is out there for financing as well as what types of homes are available in your price range.  Your Realtor is there to help you.  Or you can call me or e mail me at terry@terrybishop.com for professional assistance.

Resources: Tucson Association of Realtors Monthly Housing Statistics:

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