November 17th, 2009 by Michael Oliver

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Market Recap: By Michael Oliver

The Tucson Arizona real estate market is still in recovery mode, however the tax credit has added immense pressure on buyers to make a purchase, as evident in the October statistics. Pending contracts were up over 70% from October of 2008. On a side note, October, November, December, and January of 2008-2009 were very bad months for the Tucson real estate market and the next 3-4 months worth of stats for the Tucson market should show large gains in pending contracts, unit sales, and sales volume. Something that’s not in these October statistics but worth mentioning is that the Tucson real estate market is still very slightly still going down in price. In October, the average sales price was $195,733, down 0.52% from September’s average price of $196,755. New listings are also causing inventory levels to increase. October over September, active listings are up 3.41%, showing more sellers are coming on the market to try to make a sale in the improved conditions this real estate market is showing over the last couple of years.

As already mentioned in previous market reports, I think the Tucson real estate market hit bottom a few months ago and is on the upswing. That being said, however, I think the reason we still see average price declines and median sales lower that a high percentage of home sales are to first-time buyers. First-time buyers generally are going to purchase in the sub $150k price range. This pulls down the averages in price for the Tucson region. The new tax credit has a provision for move-up buyers to cash in on a $6,500 tax credit for moving to a new property as long as they have lived in their current property for at least 5 years. This should encourage hesitant sellers to get their home sold and move to the new property they have been wanting. That in turn should force the Tucson price averages up slightly as higher priced buyers are now also getting an incentive to buy. A problem with that segment of the market remains, though. Those move-up buyers would still, in most situations, need to sell their current home before the tax credit runs out in April of 2010.