Tucson Market Statistics - October 2007
| Average Sale Price: | ||
| Existing Homes | $258,518 |  2.4% from Sep |
| New Homes | $268,992 |  .5% from Sep |
| Median Sale Price: | ||
| Existing Homes | $202,000 | 2% from Sep |
| New Homes | $229,278 | 2.7% from Sep |
| Total Sales: | ||
| Existing Homes | 919 | 12% from Sep |
| New Homes | 508 | 10% from Sep |
| Active Listings | 9,313 | 1.3% from Sep |
| New Listings | 2,399 | 4.1% from Sep |
| Under Contract | 993 | Unchanged |
| Ave. Days on Market | 70 | 4.3% from Sep |
| *Information provided by Tucson Association of Realtors Multiple Listing Service and The Arizona Daily Star | ||
If you would like more detailed statistics, a comprehensive PDF document produced by the Tucson Association of Realtors/MLS is available for viewing HERE. | ||
| ARCHIVED STATISTICS | ||
Market Recap: By Michael Oliver
As advertised, the Tucson real estate marketplace is still in a dismal state. Overall sales levels are down 30% from last year at the same time. While I don't have the exact number, I am sure that overall sales are down over 50% from the absolute highs of September/November of 2005. This has led to a very high number of sellers who bought in the prior 3-4 years or refinanced and used ARM's to obtain excessively low payments for a set time frame of 2-5 years. Now many of these Adjustable Rate Mortgages are resetting and borrowers are defaulting on their loans at levels never seen before. Since the market has dropped in price significantly, there is not much the borrowers can do and a "Short Sale" is really their only option for getting rid of their home. I predict in the next 6-12 months, we in Tucson and Phoenix will see a record number of "Short Sales" taking place, and this will put even greater pressure on prices as neighbors start selling homes for less then they owe. Other neighbors who didn't refinance or perhaps bought 10 years ago, will have to contend with the much lower prices. I still see the local market stabilizing in late 2008 to early 2009, and most likely, once we do feel a stabilization in the marketplace, the pent-up demand will show itself. We in the industry and sellers will see a mini-rally in sales activity and maybe even prices because many home builders have severely slowed production and supply of new homes is predicted to be at its lowest levels in 10 years in 2008-2009. This holding back of new supply is typically the last event to play out before a market can stabilize itself. I also see interest rates set to go down in the coming months as the FED drops rates aggressively to try to help the real estate market get its legs back under itself. Any one who is financially able to buy real estate in Tucson should seriously consider stepping up to the plate soon, and my belief is that come 2010-2011, you will be extremely glad you did. Tucson's population growth rates will not allow the current real estate bear market to exist for much longer, and anyone who looks into the numbers can readily see the long term price trends for the Tucson market can only go in one general direction -- UP! Read more about this in one of my latest blog topics.
Buying Opportunities
I still like the master planned community of Rancho Sahuarita. Also, I think buyers who start looking for homes to buy and hold in historic districts, the foothills, or anywhere that there is little availability of new housing, will be rewarded when the market stabilizes. As noted before, the Tucson population growth rates will be pushing people further and further out to areas such as Red Rock, Casa Grande, and Benson to find affordable housing. This in turn only makes the case that owning property or several properties in high demand locations that have no ability for new supply to be added to the area will shoot to the stratosphere as the demand will far outstrip the supply. In the current, market it seems impossible to believe that prices will ever start to go up again, but the real estate market moves in cycles. This current "down" cycle is no different from what has happened in the past. The only difference is that Arizona — especially the Phoenix and Tucson areas — are experiencing unbelievable growth rates and very healthy local economies that have to push our prices up.
Investment Opportunities
REO's, short sales, and most rental properties should be good buys, assuming you know what to look for. I think rental rates will head up as many speculators leave the marketplace and the demand for rental homes increases because of tougher lending standards. Small apartment complexes, duplex, triplex, and 4-plex, also should yield good returns as rents increase. Due to the credit crunch, the commercial side of things should keep it from getting too hot, and long-term commercial real estate in Tucson AZ looks very promising. If you're a larger investor, developing an apartment complex could yield nice returns as well. Tucson has not really had any new residential apartments complexes built in years, and when the real estate market was super hot, many apartment complexes were converting to condo's. This lessened the total number of rental units available in Tucson.
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