Tucson Market Statistics - May 2008
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| May 07 | May 08 | % change | ||||
| Home Sales Volume | $395,081,716 | $257,072,764 |  34.93% | |||
| Home Sales Units |
1418 | 1025 | 27.71% |
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| Average Sales Price |
$278,619 | $250,803 | 9.98% |
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| Median Sales Price |
$223,000 | $201,000 | 9.86% |
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| Pending Contracts* | 1191 | 1485 |  24.68% |
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| Active Listings |
9721 | 8527 | 12.28% |
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| New Listings |
2960 | 2282 | 22.90% |
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| Average Days on Market |
62 | 77 | 24.00% |
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*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! | ||||||
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Market Recap: By Michael Oliver
In my opinion, the Tucson market has touched bottom. It will take several months for the numbers to indicate this, but by all indications that I see and hear, the market is getting better instead of worse. (Believe me it's slow progress, but progress, nevertheless!) These numbers indicate that buyers are starting to warm up again to buying (1485 contracts pending), and that sellers are holding tight where they can (active listings down to 8527). Both have a ways to go, though. I would like to see active listings around 5500 to indicate to me that there is a real balance. With the way the numbers are heading, we should be to this 5500 active listings number (again this is a guess) around May of 2010. It will take this long for the market to clear itself out and become balanced again. I predict that beginning in 2010, there will most likely be a small acceleration of prices because few new homes and projects will be coming on board, lessening the supply of homes available.
I have a friend who sells REO (bank-owned properties aka "foreclosures"), and right now, they cannot keep up with the number of listings they are handling. I think this will be the case for the next 6 months as banks will continue to offload their foreclosures at bottom dollar prices. After 2009 has passed, I see this slowing dramatically due to the strict lending practices that have been adhered to since last summer during the credit crunch. On a big picture scale, Tucson's economy is still relatively strong. However, $4 per gallon of gas will certainly slow things. If Tucson's economy does show a real slowing, then all bets could be off. My thinking is that Tucson, due to its very large Raytheon missile plant, will continue strong. In addition, not many people know this, but solar energy producing companies are coming to Tucson in droves and have (with $4/ gallon gas) a lot of margin and demand to produce solar panels for alternative energy resources. Do not be surprised if in 5-10 years, Tucson Arizona is a leading producer of solar technologies in the U.S. These companies are leasing large amounts of space and developing new technologies currently.
BUYING OPORTUNITIES: I really think a buyer should be able to make great deals on foreclosures or new homes from a homebuilder. Both of these options are where bottom dollar prices are to be found. If you want a nice new home, make sure you or your real estate agent negotiate for MAX incentives. They are there. If you're OK with making a lot of fixes, or want to buy that investment property you have been putting off for the past 3 years, then a foreclosure is a golden way to go as well. The banks right now are literally overloaded with inventory and have to move it, so what do they do? They are unloading it at super cheap prices just to keep up with all the new properties coming back to them daily. A real estate agent who understands REO properties and the REO process could be your ace in the hole. The process is intense and the banks are difficult to deal with for those clients (or agents) who are not used to dealing with them. If you're looking to buy a REO, let me know. I handle these types of sales regularly and am very familiar with all the processes/negotiation techniques the banks use.
SELLING OPPORTUNTIES: NONE unless you're looking to sell in order to buy a larger, more expensive property, thus "moving up." In this market, that move makes sense, but unless you have to sell, I would recommend against it. A REAL ESTATE AGENT WHO TELLS THE TRUTH? Yes, there a few of us agents who will tell a client the truth about not always having to buy or sell. Most agents always say it's a good time to buy or sell a property regardless of the market or a client's real needs. I don't do things this way. In my opinion, it's not a good time to sell unless you MUST or are moving up. Enough said!
INVESTMENT OPPORTUNITIES: As already noted, buying REO property could be a great move, especially come 2010-2015 when the market should be back to a seller's market. Other than this, if someone had extra cash lying around, buying a parcel of land might also be a good investment. Land is cheap right now due to the overall market being so soft. Since land doesn't really bring in revenue, a lot of people have a real problem on their hands and would like to sell it at "dirt cheap prices" (pardon the expression). So, that may also be a wise investment. But I would caution that a land investor should be paying cash for the parcel or have other revenues that will be available because the investor will have to sit on the land holdings for a couple of years before being able to resell it, hopefully, to a developer once the market swings back to a seller's market.
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