December 13th, 2009 by Michael Oliver

Share This Post

The Tucson market is continuing its rebound from the bust it went through from the end of 2005 until as recent as a couple months ago. Sales are way up, listings are way down, and pending contracts are way up also. From last year to this year, the numbers are impressive. However, most may forget that last year, from November until at least March, the Tucson real estate market (like a lot of real estate markets nationwide) was dead. Very few deals were closing and buyers were scared to make a purchase of any kind due to the economic storms facing the country. So, that being said, the numbers are impressive, but the gains should be weighed against last year’s economic conditions.

Overall, buyers are more competitive in making offers on homes, and sellers are more willing to make deals in the home sales I have been involved with this year. The market has continued to improve every month since March on a seasonal basis, and I attribute a lot of this to the Federal tax credit enticing first time buyers to buy. When this goes away, I’m sure the first-time buyer market will shrink. It has accelerated home purchases by first-time buyers, and the result will be reduced demand after the incentive ends in April of 2010. However, for the time being, foreclosures are being sold and the market — while prices are still in decline — is becoming a much easier place for buyers to find amazing values and sellers willing to make deals with buyers.

Under the $200k price point in Tucson is currently a seller’s market. While prices are not going up, the demand is strong for homes priced right and in decent shape. Under $150,000, the market is downright hot, and bidding wars — especially on foreclosure real estate — seems to be the norm as buyers push to get into this price bracket. On the other side of the fence, luxury housing in Tucson is dead or barely existing as a market. Higher priced homes do sell, of course, but from what I have seen, the demand is extremely weak. Even the high priced foreclosure homes seem to take a while to sell and usually sell for a lot less than their initially listed price. If you are a buyer in the $500k+ end of the Tucson housing market, you should be able to command leverage and negotiate a great deal, especially during the holiday season. Many buyers put off their home search plans until well after New Year’s. This causes some sellers to fear their home will never sell giving buyers additional negotiation leverage.

For the rest of the year, I predict the market will remain steady and sales will continue to increase over last year’s levels. The real estate market and economy is in a much better position than it was 12 short months ago. For me, personally, I have been busier this holiday season than ever — even during the boom. Many buyers want to buy and get into a home now vs. waiting until after the holidays. For the most part, I believe the worst is behind the Tucson real estate markets. However, I am somewhat concerned that banks seem to be holding off placing foreclosure homes on the market until it can handle the additional supply. Most real estate experts believe this is occurring. On the other side, the market is easily handling the foreclosure supply and high volume of distress sales hitting the market. So, assuming demand increases with the buying season and the supply isn’t just dumped on the market, Tucson should stay in a somewhat balanced marketplace.