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

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

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

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

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

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

Resources:

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

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

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

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

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

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

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

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

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

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

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

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

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

Resources:

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

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

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

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

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

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

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

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

Tomorrow:  Pricing

Resources:

Tucson Association of Realtors – June 2009 Residential Sales Statistics

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

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

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

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

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

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

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

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

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

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

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

 Resources:

Arizona Department of Real Estate:

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

 http://159.87.254.2/publicdatabase/SearchDevelopments.aspx

Tomorrow:  Numbers

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

     In all the media doom and gloom, (which of course sells papers and viewership for news programs) one can look closely and see there is positive impact out there – interest rates as low as 4.675% – for someone willing to pay a one per cent loan origination fee.

    “Rates have not been that low in at least six years” said Lance Dickson, Senior Vice-President of Nova Home Loans in Tucson.  People not desiring to pay a loan origination fee for a 30 year fixed mortgage can obtain a mortgage for about 5%. 

     Jerry Sundt of President of Sundt Mortgage in Tucson is offering the same low rates for people with good credit scores.  Twenty per cent down is required for an 80-20 Loan to Value.  For every $100,000 in purchase price, the borrower needs to put down $20,000 for a 20% equity stake. 

     This  is an ideal time to refinance a higher rate mortgage if you have at least 20% equity in your home.  Many people are now in 6 1/2 % or 6.75%  mortgages.  We’re looking at good credit scores of about 740.  But rates are much lower for people with lower credit scores too!

     To understand how interest impacts payment, $100,000

               at 6.75% for 30 years, the cost is $648.60; 

              at 6 .25%, for 30 years, the cost is $632.07;

              at 5%, the cost is $536.82; and

              at 4.675% the cost is:  $517.14. 

    If you are thinking about selling your home within a year or two, refinancing may not pay.  You, your lender, and/or your Realtor, should do a break even analysis to determine if a lower rate will save you money. Calculate the closing costs including the loan origination fee to determine whether this works for you. 

    The media does not emphasize that people who have been in their homes prior to 2004 and have not refinanced to the hilt, should have some solid equity in their homes. 

   A previous blog dated July 28, 2008 and titled “Bring on the Numbers” traces the increase in home pricing in Tucson from 1993 through 2007.  With a 45% increase in three years between 2005 to 2007, the lamented decrease in home value of about 25% still leaves the homeowner who bought in  2004 or before, with at least a 20% increase in equity.  The only article I’ve seen about this phenomena was written by Kenneth Harney who is “right on” in his analysis.

    With more than 600 homes in Tucson on the market for $120,000 or less, now is the time to “sieze the day!”    A gander at the blog yesterday which shows all the active listings and the breakdown by both zip code and price range combined with the lowest interest rates in years will get savy people moving. 

    It is a well known fact that by the time the media says we are pulling out of the doledrums, prices have already moved up — and when that happens, interest rates will move up too!  The media uses lagging indicators!

    So to the savy out there, Carpe Diem!

 Resources:

Ken Harney Articles:  http://realtytimes.com/rtpages/kennethharney.htm

Lance Dickson -Senior Vice President – Nova Home Loans:  http://www.lancedickson.com/

Jerry Sundt – President – Sundt Mortgage http://www.sundtmortgage.com/

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

     Although the average price of a Tucson home in November this year decreased more than $10,500 from October of this year, the average sales price of a Tucson home was closer to the September price of $217,397 or less than $1,500.  The median sales prices dipped $2,000 to $178,000 from $180,000 in October.  

    These numbers mirror November 2004,  the beginning of the real estate boom.  The average sales price in November 2004 was $214,183 and the median sales price in November 2004 was $177,000.  

      Reflecting the beginning of the holiday season when home sellers and home buyers are less active, sales in October totaled $186,356,109 and in November, $137,104,343.  This is a decrease of more than $49,000,000.

    Many buyers remained on the sidelines waiting for the outcome of the November Presidential election.   In any Presidential election year, home sales tend to decline, a factor pegged to “uncertainity” about a new administration and fiscal policies.   Fear about the economy was certainly parlayed into an election year mantra and such talk does not bode well for home sales.

    Active listings on the Tucson Multiple Listing Service increased by a mere 8 listings from 7,988 to 7,996.  This shows that inventory is stabalizing.  A total of 635 units were sold in November, a decrease of 185 homes.  New listings to the market decreased by 417 listings, from 2032 in October to 1615 in November.  If this number holds throughout the next six months, inventory levels will abate to pre run up levels. Pending contract, those contracts waiting for close of escrow, also decreased from 755 to 677 contracts.

   The majority of homes on the market now fall between the $200,000 and $249,9000 price range (1,043).  521 listings are priced between $120,000 and $139,999; 592 between $140,000 and $159,999;  636 homes between $160,000 and $179,999; and 590 homes priced between $180,000 and $199,999.  Approximately 600 homes in the Tucson Multiple Listing Service are priced below $120,000.

   Between $250,000 and $299,999 there 758 homes on the market;  985 between $300,000 and $399,999; 503 homes between $400,000 and $499,999; 669 between $500,000 and $749,999; 294 homes between $750,000 and $999,999;  and 358 homes on the market priced at $1,000,000 or above.

Resources:

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

      The average sales price of homes rose from $217,397 in September to $226,435 in October, an increase of more than $9,000.  By comparison, the average home price in October 2007 was $259,557, representing an annual decrease of 12.76%.

  The number of homes sold during October  (823) decreased by 111 units from September  (934) while the sales volume decreased by 8.22% from $203,048,605 in September to $186,456,109 in October.   This is a reduction of more than $16,500,000.   

    It is believed many potential home buyers stayed on the sidelines during September and October waiting until November 4 when the Presidential election would be decided by the American public.  Constant political rhetoric about the economy for all levels of political races, put the “economy” front and center in the minds of potential home buyers, and that factor, combined with the swings in the stock market, put a damper on home buying.

    Once November 5 came, the day after the election, there appeared to be more interest by buyers looking at homes.  We are swinging into holiday season, a time of the year when buyers and sellers tend to put their plans on hold until after the first of the new year.  But with the new programs announced by the Government regarding re-working existing home loans, additional inventory may be taken off the market and help stabilize the market.

     We are also now entering the period of time when winter visitors arrive in sunny Tucson,  and many look at purchasing second homes tp get away from the snow and sleet of the northern states.   Canadians are also buyers in this market.

     Pending contract decrease by 9.69% to 755 units from 836 in September and the active listings increased by 1.65% to 7,988 from 7,858.  Inventory has decreased by 1,325 units from last year.  New listings decreased by 7 units from 2,039 in September to 2,032 in October. 

    The median sales prices of homes sold in October decreased only $500 to $180,000 from $180,500 in September.  In October 2007, the median sales price was $30,000 more at $210,000.

    The following is a breakout by zip code of active listings and those sold within each area.  A full 13 page breakout of these numbers is available by clicking on the “Resource” below.               

Resources:

Tucson Association of Realtors – October Statistics, In Depth Report

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

   Families who want to begin the school year in a new home made their purchases during the summer.  Likewise, parents purchasing homes for University of Arizona students made their  home selections  in July,   Generally, there is  a spike in homes sales in June, July, and August when school is out.

            A total of 934 units sold during September which is 160 more units sold that at the same time in 2007.  However, the median sales price declined $5,500 from the August price of $185,000 to September’s $180,500.  In September 2007, the median sales price was $215,000.  This can be attributed in part to the numbers of foreclosure and lender on properties on the market.

            But the average sales price was $217,397, declining 8.85% from the August number of $238,504.   The change from 2007 to 2008 is a negative 20.19% when the average price was $272,396.

             Home sales volume totaled $203,048,605 a decline of 5.72%over August.  However, in 2007, total sales were $210,834,713.   

            The numbers of pending contracts decreased by 42 units to 836, 4.78% over August, which was 878.  In September 2007, 989 units were pending.  The number of active listings rose to 7,858, a 1.22% increase over 7,863 in August but a 14.49% decline over Septebmer 2007 which was 9,190.

             A breakdown by zip code shows the following:                                   

      As Tucson begins to work it’s way through excess inventory, especially in large master planned communities, the price of properties is beginning to stabilize.  Older, more established neighborhoods are not seeing the same degree of downtrend as the newer homes built in 2004 to 2007 when prices skyrocked. 

     Winter visitors will soon be here and will find an array of solid properties on the market with very attractive prices, combined with extremely attractive interest rates. Now is the time to purchse a winter home in sunny Tucson, Arizona!

Resources:          

http://www.tucsonrealtors.org/tar-v2/stats_sept_08.pdf

      Although August 2008 brought only $215,369,442 in sales as compared with July which showed $240,837,426 in sales, more than a 35 million decline, the numbers this month indicate that the Tucson market is reacting to the numbers of foreclosures and short sales, but is continuing to stabilize.

    The average sales price declined another 6.42% month over month, and is now $238,504.   The average sales price in July was $254,854.   At the peak in March 2006, the average sales price was $281,819.

     Likewise the median salesprice also declined 7.45% from $199,900 in July to $185,000 in August.  For  people thinking about entering the market as a buyer, this may be an excellent time.   The high median sales price of $226,465 occurred in November 2005.

      The number of active listings in multiple listing declined 1.43% from 7,876  units in July to 7,763 units in August.  This is a level seen last in March 2006 when 7,577 properties were on the market.  At the high point of inventory there were more than 10,300 properties on the market.

     Pending contracts declined 8.54% from 960 in July to 878 in August.  This goes back to levels of January 2001 and may reflect heistancy on the part of buyers who may have been waiting for intervention of the federal government and the interpretation of the Housing Bill.  Interest rates have once again declined with the government take over of Fannie Mae and Freddie Mac.

      There was a rise in new listings from 1679 in July to 1,952 in Agust, an increase of 16.26%.  Still this number reaches back to January 2005 levels when 1947 new listings came on the market.  With the exception of December when new listings dramatically fall, from that point in 2005, the numbers of new listings continued to soar to nearly 3500 at the peak in January 2007. 

        The number of properties sold declined 4.44% month over month with 903 sold in August and 945 sold in July.   Sellers appear to be pricing their properties to the market since only 545 properties expired; the listing  period endeed and the property did not sell.  This is down from 813 in January. 

       Properties are staying on the market an average of 77 days, down one day from July at 78.  Days on the market in July-August 2005 were a low of 25 days.  Properties at the higher price end though are staying on the market longer periods of time.

       The following chart shows the numbers of active properties for sale in each zip code within the Tucson Multiple Listing Service, the number of properties sold within each zip code during August, and the percentage of properties sold during the month.

    Readers can further parse and analyze the MLS numbers by clicking on the resource link.

Resources:

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

     The Tucson Association of Realtors has released the July numbers and the market appears to be stablizing.  The average number of pending contracts is up by nine from 951 in June to 960 in July.  Active listings have decreased by 264 listings from 8,140 in June to 7,876 in July.

    New listings have decreased by 416 to 1,679 in July from 2,095 in June.   A total of 945 home sales were processed through Multiple Listing in July down 89 units from June.  The total sales volume decreased from $266,202,280 in June to $240,837,426 in July.   Although the average sales price has decreased to $254,854 in July from the June price of $257,449, the Median sales price is about the same at $199,900 in July verses $200,000 in June. 

    The breakdown of homes for sale by zip code indicates 422 homes for sale in the 85706 area which is around Davis Monthan Air Force Base.  A total of 417 homes are on the market in the Catalina Foothills 85718 zip code.  Next to that is the 85641 zip code which is south of San Xavier Mission and west of I-19 with a total of 358 homes for sale.  Then the 85641 Vail area has the fourth greatest number of homes for sale at 358.  A total of 336 homes are on the market in the 85743 area which is the Continental Ranch area. 

   Areas which have few properties for sale is the central downtown area, 85701 with only 10 active listings, and then the 85619 area which is Mount Lemmon -Summerhaven area.

   It follows that the majority of areas where the most properties are for sale are those areas where Builders put up homes in master planned community areas.

    To further understand the numbers, this blog post could be read in conjunction with: July 28, 2008 – Bring on the Numbers and July 29, 2008 A note of Apology…and More Numbers.

For a full report see:

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

For information from Charlie Kentnor on the Sonita numbers, check:

http://www.realtown.com/ckentnor/blog/market-trends-and-statistics/sonoita-market-report-july-2008