As earlier reported in the Daily Star, the number of new home permits in Tucson for July was down more than 40% year over year. It also stated that new home prices are down 5.9% from July of 06. As I have been saying for a while, the new home industry is in trouble in Tucson. Currently, many homebuilders are losing a tremendous amount of money and are now severely limiting the homes they are building. In most cases, they are only building homes for very well-qualified buyers with a full earnest money deposit before building will start. Spec homes (especially finished) are where some of the best deals are to be had right now. Homes that in 05 or early 06 where selling for 400k are currently sitting on the market with builder incentives of 50-75k or more!

Selling a home in Tucson’s current marketplace can be difficult without the right action plan. First and foremost, the property must be priced right and when I say priced right thats not to say within $10,000 of the other homes so that there’s some “negotiation room.” I’m talking priced right on, if not a couple thousand less, to really bring in the buyers since Tucson’s marketplace has been in decline for over 18 months. Each month homes sell for less — not more. I run into people selling their own home all the time and they say, “The home is priced right — 2 years ago my home would have sold for this price in a day.” What they are saying is true, but it’s also not 2 years ago. It’s hard to be precise, but in most areas the Tucson real estate market is down at least 5%-10% from 2005 levels. Now, there is no doubt in my mind that home prices are headed up and this past 18 months will only seem like a small bump in the road, but the fact is that prices are well off their highs of two years ago. To get properties sold in today’s market, you need a right-on price and a marketing plan that shoots your home out in front of the other 9000 homes currently on the market. The latter is a very difficult feat for the power real estate agent, and much more difficult for an average or even “FSBO” owner. I see “motivated seller” and “below appraised value” on just about every listing. It’s more the norm than the exception it used to be.

When purchasing (buying) your first home there are many items that you should consider before you even start looking. The first place to start is “How much home can you afford?” If you’re not sure, then you won’t know what you’re even getting into when looking. Many people have a good idea how much they can afford for a payment but have no idea how that translates into purchase price. The general rule of thumb in the current market (where interest rates are right now 6%-7.5%) is about $7-8 per $1000 financed. For example, a $100,000 loan amount would cost roughly $700-800 a month for a payment. Now once you understand this, let’s say you can afford a payment of $1400-$1600 a month. You should be able to buy around a $200,000 home — maybe even higher — depending upon the exact interest rate you qualify for.

I have been selling real estate in Tucson for 5 years. During the past five years, I have been able to close well over 150 homes. I specialize in new construction and selling homes that are difficult to sell. I have an extensive amount of new construction experience, having worked for a major home builder in Tucson prior to entering the resale side of the business.

In my personal life I have a 2 year old named Dylan, and a fiance, Marissa. Marissa is also a loan officer who specializes in first time home buyers and general re-finances of real estate. When not working, I enjoy playing cards — specifically NL Hold’em and PL Omaha– and have played and won several tournaments.

When buying a home, many people don’t even consider a new construction home built by a local or national builder, i.e, KB Home, Lennar, Pepper Viner, AF Sterling, etc., but they definitely should in my opinion. Just about any new home will be more efficient, covered with a warranty from the builder, and in current market conditions many times cheaper then the resale homes available in the marketplace. Since I personally spent years selling for a major home builder, I feel there are some major advantages to buying new, but you also need to truly think out what you’re having built. You’ll need to carefully consider the floorplan, lot, builder options, and choice of builder. Whenever looking at a certain area, ask your real estate agent what new homes are also available to see. It might make you think twice about new homes.