Real Estate News & The Tucson Housing Market

Tucson’s downtown needs serious work. Everyone who has lived or been downtown knows this it is Not a Secret. Little has changed downtown in 10 years. Yes, a courthouse was built and some other things were done, but by and large, it is still a very odd place to be on the weekends or past 5pm any day of the week. There are very few homes available for reasonable prices, unless you count those built before 1910. No new condos, townhomes, homes, or other residential properties have been developed downtown in a long time. The key to turning downtown Tucson Arizona around is making it an appealing area in which to live. Then there would naturally be demand for all the services and shops that are very badly missing.

As discussed in the previous post, appraisals are not worth much to anyone besides the lender. But if you’re a seller with a buyer under contract and a sale in escrow (not closed yet) and the appraisal come up short, you have a problem. What can you do?

1) You can reduce the price of your property to the appraised value. Problem solved, except for the fact that you just sold your property for less than your buyer was willing to pay.

You hear and see it all the time, “My house appraised for…” or “Just appraised for…” or “Reduced $50k under appraisal.” But what significance does that have? To me, very little. The public gets hung up on appraisals all the time, but the problem is that home appraisals are subjective. The same home can be appraised for a very wide range of values. I have seen some homes appraised for $200k and then re-appraised (sometimes by the same appraiser the same week) for $220k. How could this be? Appraisals are, simply put, one person’s OPINION of what a certain home is worth on a certain date. They have no bearing on what the marketplace will pay. Say your home is appraised for $450k and you list the home at $450k. After six months, the best offer you have received was for $395k. The appraisal was wrong! Your home was, in fact, only worth $395k — NOT $450k.

These stats are horrible! No one expected anything different, but to be honest, a surface look at these stats gives the impression that the market is in a complete freefall. But, I think you would be wrong. These numbers reflect the past, not the future. In my opinion, these are most likely some of the worst numbers that the Tucson real estate market is going to report. The market has taken its drop and is now in recovery mode. Why?

This article, including charts, links to previous reports, and a link to this month’s full MLS report, is continued on Michael’s website. Please click here to continue.

I think it’s obvious in the current real estate downturn that fewer builders around the country are willing to open new communities. There is too much uncertainty regarding sales prices the market will support. Builders don’t know if they will be able to make any money at all. Here in Tucson, very few new home subdivisions are being opened. Most builders are sitting on their land holdings, and others are trying to sell off their holdings to raise cash. However, Meritage Homes is opening (or has just recently opened) two new communities in Madera Highlands in Sahuarita. Far north of Tucson, Pulte is still committed to their extremely large master-planned community, Red Rock. They are not abandoning the “build it and they will come” philosophy. Red Rock was not much of a town, but since Pulte has been building there, the town’s population has increased overnight. Although I know that currently Pulte has to give homes away to sell them, they are still moving them at a regular pace. Other than these two areas of Sahuarita and Red Rock, few brand new subdivisions are popping up at all.

What exactly is “Full Service” when listing your home? I know almost every agent working for the non-discount companies (i.e., Long Realty, Century 21, Coldwell Banker, Long & Foster, Exit, Remax, and many others). These companies and their agents preach “full service,” and to be fair, overall you do receive a lot more with these companies than you would with a discounter (i.e., Zip Realty, Help-U-Sell, Assist-2-Sell, among many others). But, here’s the real question: is even full service ENOUGH in the tough buyer’s market of the past 2 years. Could it be better?

Can this be right? Lewis Management manages many Home Owner’s Associations (HOA’s) in Tucson AZ. We have recently discovered that if you are a member of one of their HOA’s and have engaged in a contract with a buyer for your home, you will owe Lewis Management $225 even if the deal does not close.

Many people have little understanding of the process of purchasing a home, especially when it comes to the subject of real estate purchase contracts. In this post, I will discuss contracts, explaining how deals fall apart and offering suggestions for how they can be strengthened.

Let’s say you want to “make an offer on a home.” You obviously have to decide on an offer price. Everyone knows that part. What people typically don’t realize is that there are literally hundreds of other points a buyer and seller can negotiate IF they know what makes sense. As a buyer, you can request other items at the time you write up the offer. The following pointers should help you prepare your offer in such a way that it will stand the best chance of being accepted.

When shopping for a new construction home, few potential buyers get into the important details that would help them make appropriate comparisons. One item that most buyers consider but don’t evaluate deeply enough are the standard items included in the price. Some builders are notorious for what they do or do not include. National builders, such as Toll Brothers, will include top of the line kitchen packages, efficiency packages, and floor plans that incorporate a lot of flair and distinction. At the other end of the spectrum, in most markets, KB Home will offer you next to nothing beyond the basics. Many buyers will be put off by KB and fall in love with the builder who offers more, even though the pricing per square foot is higher. I would strongly recommend that buyers evaluate the entire value of the home/property as a whole. This is very important. You want to compare apples to apples, not apples to oranges.

On July 14th, the FHA (Federal Housing Administration) changed their guidelines for the cost of mortgage insurance. Prior to July 14th, borrowers using FHA financing paid a monthly mortgage insurance factor of .50% and an up front mortgage insurance premium of 1.50% for any 30 year financing. It did not make a difference if you had NO credit score or an 850 credit score. Money down or no money down, all loans had the same monthly and up front mortgage insurance.