September 17th, 2009 by Michael Oliver

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Market Recap: By Michael Oliver

These zip codes are the ones with the highest absorption rates (the ratio of sold homes to active listings).

The Tucson real estate market is again showing strong gains versus any point in the past 3 years. Active listings are sitting at the lowest point of the year at 6,062, a 21.91% decrease over just one year ago. I still personally feel the active listings need to be around 5000-5500 to have a truly balanced market, yet at just over 6000 the Tucson real estate market is getting very close. Pending contracts are up over 45% from last year. In my mind, that has a lot to do with $8,000 tax credit pushing buyers into the market as they now only have roughly 2 months to close on a new home to receive the credit. What will happen after the tax credit is lifted? No one really knows how much demand that is spurring into the marketplace. However, after reading a Business Week article this week, my feeling is that the numbers suggest the tax credit is not as responsible for buyer demand as many think. Other price points are starting to show promise, too. It’s just not the first time buyer market. In Phoenix (the closest market to Tucson that Case-Shiller reports on) prices ROSE 2.6% in the low price range, and also went up 0.6% in the high price points of the Phoenix real estate market. The medium price range still fell 0.5% but the large losses of the prior three years seem to be subsiding. The same thing is happening in Tucson as the low end of the market is demand-driven due to extremely high affordability. On the higher range, buyers are becoming more confident about purchasing as the stock markets and real estate markets seem to be clearly doing better than last year.