Tucson Market Statistics - August 2008
| Aug 07 | Aug 08 | % change | |
| Home Sales Volume | $299,005,952 | $215,369,442 |  27.97% |
| Home Sales Units |
1092 | 903 | 17.31% |
| Average Sales Price |
$273,815 | $238,504 | 12.90% |
| Median Sales Price |
$220,900 | $185,000 | 16.25% |
| Pending Contracts* | 1024 | 878 | 14.26% |
| Active Listings |
8954 | 7763 | 13.30% |
| New Listings |
2337 | 1952 | 16.47% |
| Average Days on Market |
68 | 77 |  13.30% |
*Has not yet closed escrow. | |||
| Information provided by Tucson Association of Realtors Multiple Listing Service | |||
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Additional information and a complete run down of the Tucson real estate market is available HERE. This MLS report is sent to all Realtors in Tucson, and is complete with color graphs and charts to help potential clients get a better understanding of the underlying real estate market conditions. Michael assists potential clients in this manner with NO COST to them! | |||
| ARCHIVED STATISTICS | |||
Market Recap: By Michael Oliver
Again, the numbers are not looking good if you are a seller or plan on becoming a seller during the next 6 months. These numbers were expected and, again, one must realize that these numbers are a rear view mirror of what has happened. I personally watch inventory levels to see which way the market is trending (active listings). This number is down. However, this month vs last month, the actives are only down a little over 100 listings. I would have liked to see a reduction of 250+ homes, as has been the trend most of the year. This less than expected reduction could mean a lot of people are realizing the market is getting a little better for sellers and want to sell now. It also could mean that the REO/Bank Owned property market is topping out -- more homes have been foreclosed upon and placed on the market. I think this period of high numbers of REO's hitting the market is nearly over, and we should see the numbers slowly coming down over the next 2 years. Another item to note is that many people who planned to rent a home or apartment have realized that buying property now is about the same monthly investment as a rent payment. In the past year, I have represented many first-time buyers who realized it would only cost them $25-$75/month more to purchase their own home. When home prices and interest rates make purchasing a home the equivalent of renting a decent apartment, the decision for most people is already made. They will decide to own rather then rent. This will continue to be the case as long as homes in Tucson stay at their current price levels and interest rates stay below 7%-7.50%.
As mentioned in the past few recaps of the Tucson real estate market, I think the market is definitely in a "bottoming" state. I personally think the bottom was touched in late June and early July of this year. Having negotiated several deals in the past couple months, it seems like more homes are priced right the first time and there are fewer reductions occurring. This means there is a little more price stability than there was last year at this time, without a doubt. Last year this time, taking a listing and having to reduce the price several times to entice a buyer was the norm. Now, with all the REO's and other homes for sale, most sellers are pricing low and getting their price or at least getting a lot closer to their price vs. the never-ending price reductions of 2006 through early 2008.
Buying Opportunities: I think REO homes and builder's homes are, in most cases, relatively inexpensive and should be considered. The outlying areas of Sahuarita, Bensen, SW Tucson, SE Tucson, Vail, and Marana are where prices have fallen the most, especially in Vail, Sahuarita and the SW side of Tucson. I think most of the outlying areas have had their fall, and with oil prices coming down -- making gas cheaper -- more people will be willing to take on an additional 20 minute drive and own a newer home for much less then they would find closer to town. Areas like the Catalina Foothills, Oro Valley, and other upscale areas such as Dove Mountain and NW Tucson have also seen price declines. However, their desirable "upscale image" combined with depressed prices has enabled more people to afford to purchase a home there, so while their real estate markets are not great, they are better than those of the above-mentioned outlying areas. If you have always wanted to live in one of these areas, I would suggest looking soon. As this market improves for sellers, these upscale areas will rebound first due to the overall demand for those areas and limited supply.
Investing Opportunities: I don't think there are going to be many real estate investment options for a long while that will give an investor a quick turn profit like 4-5 years ago. However, I do think buying and holding land in premium areas should be a good move. In addition, buying REO properties and renting them until the market shows much more strength should also be a good move. If you're looking for your own home, a good investment may be to pick up a higher-end, newer REO home. Many can be found in the $500k+ range. When the market rebounds, those properties may again be worth the $750k that they were just a few years ago. This only applies to the upscale home areas of the Catalina Foothills, Oro Valley, Dove Mountain, Central Tucson, and the NE side of Tucson. This does NOT apply to areas such as Vail, or Sahuarita, or other outlying areas of Tucson. It will be a long time before the upper-end homes there are worth anywhere near what they were at the top of the market. Some of those $500k homes in the outlying areas of Tucson are now selling for 50% of what they were worth. Upper-end buyers have realized that those areas are too far out and that with all the supply available, they can purchase in a premium area with access to a wide range of nearby services and amenities.
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