Tucson AZ is a prime secondary home (winter home) market. Every year, hundreds of people decide to buy a $1 million dollar + home in Tucson. So what does $1.5M get you? We’ll check it out. In case you’re wondering, there are 239 properties listed at $1,500,000 or greater as of today (March 29, 2008) in Tucson.

This property (courtesy of Russell P. Long of Long Realty) is currently listed for sale at $1,595,000.

This home is 4050 square feet, located in the ultra-high-end community of Pima Canyon Estates, on a lot that is over an acre is size.

The Tucson real estate market is still in a downtrend, as it has been for the past 2-1/2 years. It has gone from wildly overbought to — as I have been saying for the past 2 months — what seems to be oversold (or under priced). Now, it can be argued that outside influences have had a greater effect on the local real estate market than any other factor. This means that the very serious credit crunch has disturbed the market much more then anyone, even at this point, can predict. The unavailability of credit is seriously affecting everything in the economy, and Tucson real estate is no different. My guess is that if this credit crunch had not occurred on the scale we are currently seeing (wishful thinking), the local real estate market would have already completely bottomed and would be, at least, stable. I feel that we may not yet have touched absolute bottom. (If we did, I’m not good enough to pretend I could call it spot on. Frankly, NO ONE IS!) I do feel very strongly that current prices are very reasonable, In many areas, homes can be purchased at 2002-2003 prices. Interest rates are lower than they have been historically, even when compared to the boom years. I saw a 30-year-fixed at 5.0% in February with no points. (That’s like FREE!) Now interest rates have gone up, but are currently just under 6.0% for a 30-year-fixed. Considering that the supply of new homes is dwindling, this should help to stabilize things sooner rather than later. BUT, there is one major problem.

Tucson’s commercial real estate market seems to be slowing along with the rest of the economy. All sectors (retail, office, apartment, and industrial) seem to be in line to see slowdowns in expansion (new construction). Higher vacancy rates are expected as well.

Though retail real estate should start to see slowdowns due to the overall weakening economy, I do see Tucson holding up better than many other areas of the country. Its growing population puts direct demand on all sectors of real estate. Large retailers, however, will be very cautious about taking on new space. Smaller retailers feeling the pinch will most likely look for concessions from landlords to help get them through if the downturn is more severe than predicted.

WOW, YOU MADE IT TO PART 2! You actually have a chance of producing a real sale of your home.

Let’s not stop now. OK, PRICING IS THE ABSOLUTE MOST IMPORTANT PART OF EVERY SALE. You can mess up all the other stuff and still sell the property if the price is low enough. No doubt about that! But what you NEED to have is the highest price that will still allow a sale to happen. For instance, pricing a 250k house for 260k to allow some “wiggle room or negotiation room” is absolutely the dumbest way to sell anything and absolutely the best way to kill your entire “just placed on market” momentum. Yet, I would be willing to bet a lot that 95% of FSBO’s do exactly that. I could write a book on pricing alone, but here are the highlights. People, for the most part, know what is in the ballpark. If you price too high and attract no takers, it looks like desperation when you lower. Keep in mind that the first 30 days in which a home is on the market are 100 times more important than the rest of the time the home is on the market. Why? Well, because all the neighbors and their friends and relatives and all buyers looking in that area will immediately take notice of your home going up for sale. If you disappoint them with too high a price, these potential buyers will grab the flyer and promptly dismiss your home. You probably will not get a second chance with them. You missed. When pricing, EMOTION HAS TO BE LEFT AT THE FRONT DOOR! Only stats and true comps can be used! Don’t be like every other seller who thinks, “My house is worth more because of x,y,z.” It’s probably not true. If you’re using honest and true comps, you can decipher the price difference between homes with pools and those without, and homes with granite and those without. Just to make myself clear: only true comps and sales statistics should be used to establish a market price.

How do you get those? Well, you could go to Zillow.com, which is somewhat accurate. Or you could ask a real estate agent for comparables and see what price they think they can get you. Or you could even pay an appraiser to see what he predicts your home is worth. Of these strategies, I think the appraisal is the most useless and the real estate agent providing comparables is the best since they will have the most accurate and available info. Do remember one thing. Past sales are exactly that — past. You MUST consider where the marketplace is trending. If it is trending downward, you must account for this and price less then the numbers suggest. If your market is advancing and prices are in an uptrend, the opposite may be true and you could try pricing a little higher than the numbers suggest to bring you closer to the true market price of your home. There is a lot of guesswork in proper pricing, even for me, and I have hundreds of sales’ worth of experience. The best piece of advice I can give is that you will know your pricing is not correct if your advertising does not result in calls and showings. In that situation, unless your marketing is just completely off, you will need to lower the price quickly and aggressively. DO NOT WAIT! JUST RE-PRICE FAST so that you don’t lose more momentum than you have to. Lets move on to marketing of your property.

I’m going to give you the playbook. Take it and save thousands.

Now before we even get into this explanation and plan, I know 99% of people will not do this. Or if they do, it will only be a half-baked attempt, and then they will most likely hire a half-baked real estate agent and no sale will occur. That seller will say, “See, I should have never even listed with “XYZ Realty” or “Agent ABC.” They did nothing that I couldn’t or didn’t do myself. So, here is the advice you won’t listen to anyway. If you want to sell your home but you’re not going to take this approach seriously and don’t do it just as I describe, then DON’T TRY TO SELL YOURSELF. It is only going to cost you money and time and hurt your potential home sale. Just hire a top-producing real estate agent who gets results and nothing but. DO NOT hire the co-worker or relative who just got his license last month and is “trying real estate.” That will lead to even more frustration and expense. Believe me, I talk with those sellers and it’s the same story repeatedly, with both the FSBO who isn’t totally hardcore serious and the real estate agent who has no clue. It is useless. Honestly, it’s a waste.

OK HERE WE GO (I hope you have your seatbelt on)!

Let’s start from the beginning — the very beginning. Your home has to look good, and I’m not talking about just running the vacuum and doing some dusting. Here’s the deal. If it has been more then 3 years since the interior has been painted, REPAINT your entire home. Only use neutral colors and colors that work well together (creams, tans, beiges, whites, etc.). Please do not paint your home bright blue and orange saying: “I did what you said and painted it bright blue. I think it looks great, but no sale occurred. Michael, you’re an idiot for making me do that.” NO. What I am telling you to do is only use neutral colors, period. I don’t care if you don’t like them or think they are “not vibrant enough for your home.” One more thing: if you are not a skillful painter, you need to hire a professional. No halfway decent job is going to cut it here. Enough said about paint, but it is extremely important. Again, you must be serious about selling or you’re just wasting your time. It’s really up to you. I can almost guarantee a well-done neutral paint job will get you all your money back in the sale and make your home sell much faster.

High-end foreclosures are starting to show up in the Tucson marketplace. Homes above $1 million are coming up as REO (Real Estate Owned Properties). The reasons for this are many, and I predict that these high-end foreclosures will continue to escalate in number. One reason that this is happening is that many would-be developers decided real estate was doing so well in 2005 that they were going to buy a parcel of land and develop a million dollar or multi-million dollar property. From point of decision to completion, development time is 9-18 months. Now in 2008, the market is severely depressed and the amount the developers thought they could sell the property for is not even possible, and the cost to build is more than the market value of the home. This leaves the developer in a tough situation unless they have major reserves to hold the property or pay out of pocket to get it sold. Many of these would-be high-end developers do not have reserves or did not anticipate cost overruns that pushed the costs up on their home, making them too expensive to sell and netting them a foreclosed property.

Continental Reserve, on Tucson’s northwest (NW) side was built as an extension to Continental Ranch in 1998-2006. The homes in Continental Reserve have a contemporary look thanks to their exterior paint schemes, rooflines, and floor plans that exhibit large open living spaces. Several major homebuilders developed communities in Continental Reserve. A.F. Sterling’s Sierra Ridge community offers large lots and all single-story floor plans. Their Sierra Crest neighborhood is Continental Reserve’s only gated community, and also includes a pool and spa for residents. KB Home’s Stoneridge is a neighborhood of all single-story homes ranging in size from 1558 square feet to 2481 square feet. All feature tile roofs and many of their floor plans have great room concepts. US Home also built a large community in Continental Reserve that is named Summit Point. This community offers both one- and two-story homes ranging in size from 2000 square feet to over 3000 square feet. These homes sit at the rear of Continental Reserve and some lots offer unmatched flawless views of Sombrero Peak and virgin desert landscape. The community lies adjacent to Saguaro National Forest, named after its rich growth of saguaro cacti. Pulte Homes offers the Jubilee community, one of the last communities built out in Continental Reserve. These homes are some of the finest in the area due to their size and the finishing touches that were included in the neighborhood. Meritage Homes offers homes with a very contemporary look and feel. They were originally constructed by a local builder known as Monterrey Homes which was later purchased by national homebuilder, Meritage. Home sizes range from roughly 1800 square feet to just under 3000 square feet. These, like Pulte’s, offer owners higher-end finishes and dramatic homes that feature large open kitchens, extra-high cathedral ceilings, premium exterior architecture, and often include unique living spaces that other builders do not include in their homes.Other communities within Continental Reserve include Amber Crest, Coyote Trails, and Pinnacle Vista by Lennar, Paseo Crossings and Entrada by Monterrey (now Meritage Homes), Eagle Ridge by US Home, Continental Reserve Block 7 & 8, Continental Reserve Block 10, Continental Reserve Block 13, and Continental Reserve Block 17-19.

A new listing that will be on the market soon is 5340 W Sunstone Pl, Tucson AZ 85742. This home is located in the master-planned community of Countryside, developed on Tucson’s northwest (NW) side in the late 1980’s through the 2000’s. This particular home was built in 1993 and is a single-story with almost 2000 square feet (1958 square feet, to be exact). The home offers 4 bedrooms and 2 baths. This home has new upgrades that include new carpeting and paint. The home also features lots of tile, a large kitchen with an island and breakfast bar, vaulted ceilings, lots of arches, 3-car garage, a large covered patio, and a water feature in the rear yard. This home is one of the few in Countryside that has a tile roof and very contemporary exterior and interior design. This home shows extremely well and should sell quickly due to its reasonable price of $224,900. On the northwest side of Tucson, a home in Countryside is very desirable. Children would attend school in the Marana Unified School District (MUSD). The elementary school for this neighborhood is Degrazia, the middle school is Tortolita, and the high school is Mountain View. If you would like additional info on this home or would like to physically view it, please let me know.

Have $750,000 and want to know how far that will get you in the Catalina Foothills of Tucson? In many large cities like San Diego, Los Angeles, New York City, Chicago, Seattle, and many other areas of the country, $750,000 will not get you very much at all. But Tucson offers climate, scenery, and an economy that (while not as diverse as some of these mega metro areas) is very vibrant. Here in Tucson, we have passed 1 million in population and this has pulled many high-end businesses and retailers to the area. Just off of Sunrise and Campbell, La Entrada is fully leased with premium retailers for high-end fashions and services to residents who demand luxury items. In addition, the Tucson area is dotted with many exclusive resorts that cater to residents and guests alike with world- class golf, spas, and recreation that cannot be surpassed by any desert climate in the world!

I have to give it to the Fed and Ben Bernanke. He made a major change in how the Fed operates. Many mortgage companies, banks, and investment companies are holding mortgage-backed securities that absolutely no one will buy in this turbulent real estate market. The Fed has stepped up big-time and said they will now accept these securities as collateral for treasuries that they then will lend to the institutions asking for the loans. Here’s a rundown: