Tucson Market Statistics - September 2007
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| Average Sale Price: | ||||||
| Existing Homes | $264,598 |  2.9% from Aug | ||||
| New Homes | $267,570 |  5.4% from Aug | ||||
| Median Sale Price: | ||||||
| Existing Homes | $206,000 | 3.7% from Aug | ||||
| New Homes | $235,496 | .3% from Aug | ||||
| Total Sales: | ||||||
| Existing Homes | 808 | 32% from Aug | ||||
| New Homes | 457 | 4.2% from Aug | ||||
| Active Listings | 9,190 | 2.6% from Aug | ||||
| New Listings | 2,497 | 6.8% from Aug | ||||
| Under Contract | 989 | 3.4% from Aug | ||||
| Ave. Days on Market | 73 | 12.3% from Aug | ||||
| *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 | ||||||
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Market Recap: By Michael Oliver
The Tucson Real Estate Market is still very weak. It does seem, in my opinion, that many bargain hunters are starting to buy at these price levels. Across the board there are many deals to be found by willing investors/first time buyers (or really any buyers) that can afford to wait out the downturn. The numbers suggest that the market is more than likely still headed down for the next couple months. How much? Well that's the real question. Some areas of town are very affordable (think NW). With the Fed dropping rates again, mortgage rates will follow, making the one two punch of lower prices and lower interest rates pull our local real estate market out of the downturn sooner than later. Even though the Tucson market got very very hot in the boom of 2005, it still did not get as hot and as overbought as other real estate markets in America, so in my opinion our real estate market should swing back quicker than other cities such as Miami, Phoenix, LA, or Las Vegas.
Although the market keeps getting cheaper due to price reductions and much lower interest rates, a lot of this current downturn (at this point and in my opinion) may be psychological. Remember, home prices are really more relative to financing and the monthly payments that a potential buyer can obtain than just the overall price of the home. The facts are that rates are headed to mid to low 5% range (incredibly cheap). Prices across most of the city are down 15%-25% from their late 2005 and early 2006 highs, and there are also roughly 33% fewer transactions being made. A lot of the down turn was due to over-speculation and a credit crunch, which allowed less money available to banks to offer borrowers to finance homes. The credit crunch meant lenders tightening up their standards significantly regarding who and what they finance. After all this, the bottom line in today's real estate marketplace is that a buyer can purchase a home at 15%-25% less than two years ago and obtain a lower mortgage rate than in at least two years. This results in an unbelievable affordability of homes for first time buyers, which is the real fuel to any real estate market. The more of them there are to buy the lower priced homes, the more people can sell and move up to a larger home at every level. I have to think that right now, all things considered, the affordability of a home is better now than anytime in the past 3-5 years. In addition, the Tucson economy currently is running at around a 4% unemployment rate. So in my reasoning, a lot of this part of the downturn is due to first time buyers (buyers in general, but specifically first time buyers) just being scared to step up and purchase because of the psychological fear that home prices may go down more and they may miss the bottom. Once the psychology changes and more first time buyers start to purchase, the downturn could come to a quick halt, and a stable 5%-6% appreciation rate should follow. The reality is that everyone wants to buy at the bottom, but no one knows where the bottom of this market is until 6-9 months after it passes. In the next 12 months, I feel very confident that we will have seen the bottom of this downturn, and in 2-3 years anyone that was willing to step up and buy will be very glad they did so.
Buying Opportunities
Across the board, while every property is not a buy, a few are true "buys". I like the buying of "Short Sale" properties, and as far as locations go, I still think Rancho Sahuarita is very affordable for what the community offers. Northwest Tucson seems to have very affordable prices not seen in years. Oro Valley, the Foothills, and the East side also offer very good deals in all price ranges. I think purchasing a new home from one of the new home builders will, all things considered, net you the best overall deals. The amount of inventory buyers' have available and the financing rates that are currently being offered are very enticing to all buyers that are willing to step up and make a purchase. The only people I would recommend not to buy are those looking to downsize and need to sell their larger home first unless they are able and willing to rent one of the properties until the current down market ends.
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 are headed 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. 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 apartment complexes built in years, and when the real estate market was super hot, many apartment complexes were converting to condos which also lessened the number of total rental units available in Tucson.
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