January 2nd, 2009 by Michael Oliver

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After doing some research today I found the found the following stats: Currently there are 8197 Active listings in Tucson Arizona and of those 8197 listings on the market:

-11.7% Or 961 of the listings are a “short sale” these sellers are trying to work out a sale for less then the principal due. Most of these sales will not actually go through and the “sale” will end in the home being foreclosed upon (sold back to the bank at “Trustee Sale”). The “foreclosure rate” (the rate of short sales that DO NOT end up being sold and become foreclosures to be resold by the lender.) runs about 90% of ALL SHORT SALES! So what this means is that about 96 of these 961 short sales WILL Go THROUGH while the overwhelming rest of the short sales will become new REO/ Foreclosure/ Bank Owned Properties for sale within the next 6-12 months.

-8.3% of all the homes on the market ARE FORECLOSURE HOMES. (Also called: Lender Owned Homes, Bank Owned Homes, REO’s, etc) The exact number of foreclosure listings on the market is 681 properties. The majority of these homes (unlike the Short Sales) will be placed on the market and re-sold relatively quickly. Most foreclosure homes in Tucson AZ are on the market bought and close escrow in less then 75 days. SO the majority of these homes will be sold and have new owners by the end of February 2009.

-Total homes on the market in Tucson in some sort of “distress” = 20% or a total of 1642 listings out of Tucson’s 8197 active listings. (On the market)

I am going to be keeping track of this number because I think it may serve as the best (one of the best) indicators of how weak/strong the Tucson real estate market is or how it changes throughout the year. A high number of distressed homes puts a lot of downward pressure on Tucson home prices. At 20% I would say that’s a very high number think of it this way: 1 out of every 5 homes for sale is a short sale or a foreclosure home right this second! The market will gain strength when this “distress” ratio eases in my mind a “healthy” market should have NO MORE then 5%-7% of the total active homes in distress. Now having said that right now there is a tremendous amount of newer very nice homes available for sale at low (super low) prices due to the banks having to foreclose on them and now the banks just need to dump inventory. I have seen several of these A+ foreclosure homes just in the past couple weeks. This “availability” of good condition foreclosures will not be around forever and in my mind at a 20% distress ratio as a buyer you could not ask for much more in market to #1 be able to locate great homes at great prices and #2 for those homes to be in good enough shape that a regular homebuyer could move right into them and not have very many issues. This “move-in ready concept” is VERY RARE when buying foreclosed real estate historically.