Real Estate News & The Tucson Housing Market

The newest listing in northwest Tucson’s very desirable, active-adult community, Sunflower, is 1296 square feet, 2 bedrooms, 2 baths, on a corner lot. This home features an extra large screened-in patio (grandfathered in as these are no longer allowed in Sunflower), high ceilings, new carpeting, new paint, window coverings, and water softener. The flagstone front patio area, complete with low stucco wall, gives the home dramatic curb appeal few homes in Sunflower attain. At least one of the residents of a home in Continental Ranch’s Sunflower active-adult community must be at least 50 years of age. Residents of the close-knit, master-planned Sunflower community can enjoy full access to the clubhouse that houses a fitness center, community pool area, spa, game areas (think cards and other games), tennis courts, botchy ball, horseshoes, and many other activities. In addition, many residents are involved in clubs and groups that meet regularly. If you’re looking for the advantages of an active-adult neighborhood, Tucson’s Sunflower Community in Continental Ranch on Tucson’s northwest side is almost impossible to beat. This home is priced to sell at $219,900. If you would like additional information, please feel free to let me know. This property should be very attractive to potential buyers in the marketplace. For more details and photos, please click here.

People constantly ask me, ‘Which builder gives the most for the money?” My answer is, “Depends.” In this post, I’m only going to discuss the largest production builders selling homes in Tucson. For a discussion of semi-custom builders, please refer to the previous post, Which Builder Builds the Best Quality.

Every buyer client I have ever taken on always asks the same question, “Which homebuilder builds the best quality?” I will try to explain the differences and quality issues as I see them. First off, unless you’re talking about a full-blown custom home, there’s not a significant difference in quality for most homes under $500k. The municipalities govern the homes being built through building codes and plan approvals. They ferret out a lot of bad building practices from the onset. However, the municipalities are not working for you, the customer, in any way. They are just making sure homebuilders are abiding by the ordinances and building codes. If they are, then they do nothing to point out better practices or the way something should be done but isn’t by the builder.

For foreign buyers — especially from Canada — purchasing real estate in the United States can be fairly simple. With the U.S. dollar falling in value against many foreign currencies, American real estate markets are inexpensive now compared with 5 to 10 years ago. The current U.S. real estate recession means homes can be purchased for 50-60 cents on the dollar when considering dollar depreciation. A Canadian buyer can purchase a nice home with amazing views in Tucson AZ for $250k. Ten years ago, with their currency devalued and home prices up, the same homes would cost 120%-130% of what they cost now. Essentially, homes are now on sale for 50% off! This is why interest in American properties is rapidly growing. So how do you obtain a home in the United States?

OK, I’ll admit it. I like to help people, sometimes to the point where it takes a lot of my time and I feel like I have to play catch up. Here’s a post I think will help the overwhelming majority of FSBO’s AND new real estate agents (or those that have yet to realize what they should be doing). I am taking the time to write it because I see so very many horrible home pictures! It’s hard to believe that some people don’t seem to know they can and should do a better job. I am in no way pretending to be a professional photographer. However, a few common sense techniques will produce above-average pictures that will get people interested in a home. As a disclaimer, some homes are hard to photograph because of their layouts and other issues. But, lets start from the beginning.

Looking to buy a second or winter home in Arizona? Think Phoenix is your only option? Want world-class desert landscapes, golf, and services? Think Tucson Arizona for all this. Many Canadians think that Phoenix is the only option if they want to purchase a property in Arizona for winter. While Phoenix does offer some opportunities, in my opinion, Tucson offers advantages Phoenix cannot touch. Tucson is a much smaller city than Phoenix. The population is just over one million, which is comparable in size and growth rate to Calgary, Alberta. Tucson has world-class golf year round. The Accenture World Match Play Championship draws a large crowd, and is a very prestigious tournament. Tucson is also home to the annual Gem Show each February, which brings in super-sized crowds every year. Tucson is home to spring training for the MLB, and is roughly a one-hour drive from the Mexican border for quick day trips into Mexico.

After having recently taken several buyers out to find homes in different parts of Tucson, I have discovered that the absolutely best deals are the builders’ spec homes. These homes are completed or almost completed, but unsold. Many potential buyers these days are hung up on the foreclosure deals, from which there are plenty to choose. However, after having negotiated several of each, it is obvious that the homebuilders around town have concluded that they need to move product fast. Banks, on the other hand, are tending to hold tight to their set prices on foreclosure homes and are willing to wait to find a buyer for their properties at that price.

For whatever reason, FHA loans are getting harder and harder to obtain. An FHA loan is simple to understand. The federal government determines the criteria that borrowers must meet, and as long as the borrower qualifies, the government will guarantee the lender against losses if that particular borrower defaults on the loan. If the borrower stops making payments and the lender needs to foreclose on the property, the federal government will step in and pay the lender for all losses on that loan. It’s the highest mortgage guarantee a lender can receive because the federal government itself is backing the loan. However, in the past few weeks, I have been hearing rumblings from lenders that banks are not accepting FHA loans in the same number that they have for the past few decades. WHY? I have no idea, but it is happening. Could these banks be worried that the federal government may not be good for all these loans if they go bad? That is the only reason I can think of. Why else would a bank make it harder than it has to be to get an FHA loan? See, the FHA does not lend any money. It just sets the guidelines that the banks and borrowers have to abide by to get the FHA loan. It’s up to the banks to accept FHA loans. Why would banks start imposing more than the minimum for these loans to occur when they have the federal government’s guarantee that they are insured against all losses on those FHA homes?

The numbers are staggering when you look at the change from 2004, just less than four years ago. In 2004, only Yahoo had more than 2 billion dollars in web advertising revenue, with Google not far behind. By 2006, the numbers were up dramatically. Google came in close to $4 billion — a 350% increase in 2 years! Yahoo increased to just less than $3 billion, which was also a very large increase in just two years. Now the projections are out for 2008, courtesy of The Wall Street Journal (see chart below), and the numbers are mind boggling in terms of growth. Google looks to be ready to scoop just under $8 billion, and Yahoo $3 billion. Even AOL (which uses Google for its text ads) and MSN (currently trying to purchase Yahoo) look to be over the $1 billion mark. All this is in just 4 short years! I guarantee you these numbers will continue to increase exponentially for the next 20 years. There is no doubt in my mind about it. The Internet is becoming the preferred way to advertise due to the ease with which marketers can track and display ads to the precise target market for the product. How or where else can a person who wants to sell a product display advertisements directed only to those people who are actively searching for that exact thing? Furthermore, people are increasingly using the Internet every day for more complex things like watching videos, heavy research prior to making a purchase, and social activities that keep them glued to the computer all day. This makes it even more opportune for advertisers to get involved with the Internet and push their products to those looking for them online. This includes homes.

The Tucson real estate market, while still in a depressed state, is showing stats that coincide with a market on the rebound. If these trends continue, Tucson’s market place will emerge from its downtrend and get its legs beneath it for the first time since late 2005. What indicates this to me is the fact that pending contracts have been up substantially for the past two months, meaning that more people are getting under contract to purchase a home. Also, active listings continue to keep coming down. Now the supply (active listings) needs to come down a whole lot more before we are in what I would call a balanced market. I would say active listings need to be around 5500 to suggest a balance. However, one important item to note is that the statistics no longer include the far outlying areas of Southern Arizona (places like Tombstone, and Cochise), so the decrease shown from March 2008 over March of 2007 is not 100% accurate. That being said, there are fewer listings on the market. In addition, the new listings prices are also down roughly 10%, meaning fewer people are trying to “test the market.” (That’s what sellers who overprice their home and want their real estate agent to work super hard to find a buyer at their inflated price call it.) Sellers in Tucson right now are realizing it is not a good time to “test. ” In fact, you need to be at or under the comparables to facilitate a sale these days, and any property outside of those comparables is almost impossible to sell. Plus you will need to get your property exposed and marketed in a very effective manner because of the overwhelming number of properties. Buyers have many, many options now, and if your home isn’t pushed to the forefront, even a low price may not be enough to get their attention.