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Arizona Agents Rate the Market

December 2, 2009

I’ve started participating in a monthly market survey from the Arizona Association of REALTORs.  I look at a lot of data, compile monthly numbers myself, and figured that since I know the Tucson real estate market, I’d be a helpful association member and start taking the survey.

After I completed the survey, there’s an option to look at the answers of everyone else.  I must admit, I was a little surprised how other Arizona agents answered the questions.  Here’s the results, of 125 responses:

 

Current	Weak	Stable	Strong
Residential Sales	42%	45%	13%
Residential Listings	26%	53%	22%

 

6 Month Outlook	Declining	Stable	Improving
Residential Sales	16%	38%	45%
Residential Listings	16%	48%	35%

 

What do you think?  I’m not sure I agree…

Home Prices near the University of Arizona

November 16, 2009

Got a question from a reader the other day about home prices near the University of Arizona.  In my October 2009 Market Report, I looked at how quickly home prices were decreasing per month, on average.  A reader asked me how the University area compared.

So.  If we look at the region between Stone and Country Club, Grant Road to Broadway, single family homes only, we find that the average home sales prices are:

 

2009 to date: $267,656

2008: $272,992

2007: $307,299

2006: $313,649

2005: $296,582

2004: $246,315

 

If we compare to Tucson area statistics, you can see the University area has higher average sales prices in general than the rest of Central Tucson.  This area includes some in-demand neighborhoods though: Sam Hughes, Blenman-Elm, West University – that tend to hold their value well. 

And like the rest of town, 2008 was a rough year for the average sales price.  In 2009 to date, we’ve had a much more moderate decline. 

Will Mortgage Rates and Home Prices Continue to Decline in Tucson?

November 2, 2009

Question from the blog today – will rates and home prices keep going down?

Answer – depends on what time period you look at. 

Let’s start with home prices.  Will they continue to go down over the next month?  Most certainly.  Over the next year?  It’s likely.  Over the next 5 years?  Maybe not.  Over such a long term, there’s no way to accurately predict.

If you look at the average sales price for homes in Tucson over the last few years, you can see the decline.  I’d argue that the drop in home prices is slowing a bit, but there are several factors in play that could make that change – the availability of financing, the levels of inventory, the economy as a whole impacting salaries and the ability to buy and sell a home.

If we look at mortgage rates, there’s some seasonality there too.  I talked about that earlier in this post about rates going up or down.  History says rates go down in the fall.  But again, there are larger factors at play. 

AND – rates are changing rather quickly, as Dan points out in this article about how long a rate quote lasts over the past 2 months.  Lenders are changing their pricing often, which changes your rate often. 

So why ask if rates and prices will continue to decline?  Trying to time the market, buy at the best possible price and rate?  I guess you can try.  But you’ll never know if we’re really at bottom until we’ve already left it.  It’s all just part of the risk you take by deciding to buy or sell at any particular time.

Tucson Distressed Housing Market – Sales by Type and Area

September 17, 2009

I was curious today to know exactly how much of our market was distress sales. So I bring you the extra lovely chart, below:

By area of Tucson, this shows you what percent of sales in that area are short sales, REO properties (foreclosed homes sold on the resale market), and what percent were regular sales. This includes all sales from 8/1/09 to today.

Clearly, the REO market is larger than the short sale market – at least in terms of sales that are actually closing. Regular non-distress sales still are a large portion of the market in some areas – but check out the South. Well over half of the sales in South Tucson are distressed properties of some kind.

Citywide, by the way, that makes our market 10% short sales, 28% foreclosed properties, and 62% regular properties. Now that the Tucson MLS has added a short sale and REO property flag to listings, these numbers ought to be quite a bit easier to track.

Tucson Real Estate Market Overview – Fun with Charts

September 2, 2009

I don’t know if you’ve seen this chart that I’ve got over on the home page of Housechick.com:

This is one of my favorite market charts that I maintain.  You get the whole story of what has happened to the Tucson housing market in one glance.

The black bars show months of inventory, or absorption rate.  Basically, the months of inventory is the rate at which homes are selling, the speed of the market.  You calculate months of inventory by dividing the number of homes available for sale by the number that sold.  So if there are 5 months of inventory, it means that if no other homes come on the market, at the current rate of sales, it’d take 5 months to sell all those homes.

Generally, anything around 5-6 months is considered balanced – buyers and sellers have equal power.  Anything under 4 months or so is considered a Seller’s market, and anything over about 7 months is a Buyer’s market.  The higher the number, the slower the market, generally.

The yellow line is the citywide average sales price, as I calculate it.  Which means it includes only the 9 major regions of Tucson, single family homes, town homes, and condos only.

See down there on the left hand side back in 2005?  Back when the supply of homes was so low that we had 2 months of inventory some months?  Look what that does to the average sales price – lack of inventory and high demand leads to higher sales prices.  And you can see the whole market shift over the next few years.  As inventory levels rise, average sales prices start leveling out, and then dropping as inventory shifts yet higher.

So where are we now?  Well, inventory has been dropping.  Over the last 3 months, the average sales price has been going up ever so slightly.  But we were also seeing that happen over summer, which is our high selling season anyway.  Will it all hold as we head into winter?  Only time will tell for sure.

Declining Home Values in Tucson and Zestimates

June 11, 2009

Excerpt from my inbox: "The Zestimate dropped $5000!  Should I still buy the house?"

Zestimates, for those of you not hip to the lingo, are estimates of home values from Zillow.  Zillow isn’t a bad place, a decent starting point.  However, it isn’t as accurate as I can usually be – I’m not an automated system, after all.  And by their own calculations, the median error in Pima County is 9.5% – meaning half the homes sold were within 9.5% of the zestimate and half were further off.

So am I worried about one house’s zestimate dropping $5k?  Not so much.

Look – we know prices are still declining in Tucson – in some price brackets faster than others.  If you’re wanting to flip a house or sell it in 6 months, then yeah, $5k might matter.  But those of us that live in homes for 5, 7, 10 years…

We’d all like to save that $5000.  But if I’ll spend $850 in rent for 6 months waiting for prices to bottom out, then where did I really save that?  Buying now isn’t the right choice for everyone.  But for some of us, it still makes sense.  Declining Zestimate or not.

Tucson market stats will be posted tomorrow… stay tuned!

How’s the Market in Tucson?

May 29, 2009

I did a bit of traveling this week and as I’m talking to this group of people from across the country, the questions I’m asked are always the same – How’s the market?

Don’t get me wrong.  I know my local Tucson market conditions.  But it isn’t an easy question to answer without more information.  Here’s why:

From $0-$200k, single family homes in Central Tucson, in April 2009, 66 homes sold, and there are 347 homes on the market.  That’s 5.3 months of inventory, or 2 homes selling every day.

From $0-$200k, single family homes in Northwest Tucson, in April 2009, 108 homes sold, and there are 473 on the market.  That’s 4.4 months of inventory, or 3 homes selling every day.

From $800k-$1mil, single family homes in North Tucson, in April 2009, 4 homes sold, and there are 69 on the market.  That’s 17.3 months of inventory, or 1 home selling every 8 days.

So it really depends on your particular market segment.  You’ll encounter vastly different market conditions depending on not only area, but price band.

Home Sales Down in the Tucson Luxury Market?

January 15, 2009

Question from the audience – rephrased: How are sales doing in the higher end price ranges?  Specifically in the $700k range?

Answer: Not so hot.  The chart below explains.  That’s the number of sales over 2007 and 2008, in the $600k-$700k range, and the $700k-$800k range.

 

Generally, sales are down in those price ranges, year over year.  I was running my stats for December last night, and sales are up over last month, months of inventory are down in several areas – but not really in the upscale parts of town.  The North and the Northeast both – typically the highest priced areas – are suffering.  The luxury market is over-saturated.  Combine that with decreased sales, and you’ve got a problem: high months of inventory, rapidly decreasing average sale prices.

Did the Arizona Daily Star Just Declare Bottom?

December 29, 2008

Wow.  I think the local newspaper just declared bottom, in a round-about way.  Bold move?  Not the typical spin, anyway.  Read it here.  http://www.azstarnet.com/dailystar/273542 (It’ll hide behind a free registration in a week.)

Getting Help

December 14, 2008

One of my clients just sent me an address of a property that looked interesting.  I did a little research, and discovered it is a bank-owned home, looks like a light fix-up, in a decent Central neighborhood.

I looked at the history of the home, and the owner didn’t try to sell it before the foreclosure.  It looks like they just let it go.

The thing is, they had two mortgages on it – fairly small ones, actually.  The first lien could easily have been satisfied at a sale, the second one would have been partially covered.  Did the owner just give up?

It’s not the first time I’ve seen that.  In fact, a friend of mine recently lost her home to foreclosure.  I had no idea she was even in trouble, she didn’t try to sell it, didn’t try to renegotiate, didn’t talk to anyone about it, nothing.  Just, poof, one day she moved out and the house was the bank’s. 

Look – poo happens.  But you don’t have to take it lying down.  You do, however, have to talk to people and figure out your options – talk to your lender, talk to your agent, go talk to the free county housing resource folks.  There’s help out there, but you can’t go get it unless you tell someone you’ve got a problem.

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