The Housechick Blog

From the Tucson Association of REALTORS.

Quick Facts:

• Average Single Family Home Sales Price: UNKNOWN***
• Median Single Family Home Price: $245,000
• Average Townhome Sales Price: $208,561
• Median Townhome Price: $182,500
• Average Condo Sales Price: $160,364
• Median Condo Price: $150,000
• Average Days on Market:69
• Citywide Months of Inventory: 8.8 months
• Number of Units Sold: 1019
• Number of Active Listings: 8954
• Number of New Listings: 2337

***The August Statistics Report shows the Average Sales Price for single family homes in August 2007 as identical to that of July 2007, down to the dollar, which I find highly unlikely.  When I calculate average sales price directly from MLS for single family homes for July 2007, I get $301,891, and the report says it was $295,399.  When I calculate the same for August, I get $302,963, and the August report says $295,399.  WTF?

In addition, there’s an unknown percentage value assigned to each average sales price:

Single Family Homes 39.9%, Townhomes 22.86%, Condos 17.58%, Manufactured Homes 15%, Mobile Homes 11.37%.  All of which add up to more than 100%.  I have no idea what this percentage means.  Single Family Homes are much much more than 39.9% of our market.

Is there a point to looking at this report further?  I used to work in a department called “Engineering Estimating” which are two words that usually don’t go together.  Is this statistics estimating?

Moving On:

Everything can’t be completely wrong, right?  (help me out here…)

Interesting to note is that 30.9% of listings are selling in the first 30 days, and 24% are selling in 30-60 days.  That’s 54.9% of all sales that are selling in 60 days or less - over half of the sales are happening in less than the average days on market.

Unit sales are trickling downwards.  Sometimes we get a little spike in August, but it didn’t happen this year.  We’re heading into our winter slowdown - time to price things to sell and get ‘em gone if you’re serious about selling.

Average sales price (…sigh) and the median as reported by the MLS haven’t made any big shifts since early 2006.  I’ll break it down by area and calculate my own numbers next week, see if we can find any better info.  It’s been a pretty flat 18 months or so for many areas.  No big surprise there.

Tucson still has double the inventory that it would typically carry in our pre-boom years.  Inventory tends to go down as we hit the holiday season at the end of the year - but so do sales.  However, our number of new listings each month has been making progress downward into more reasonable numbers.  Still a couple hundred more new listings than I’d like to see, but the trend is a nice little ray of sunshine.

More on months of inventory, average sales prices by area later next week.

Is a picture worth a thousand words? (Still having trouble with displaying tables nicely, sorry…)

History of Months of Inventory, from January through July of 2007, also called the Absorption Rate. Generally, 4-6 months of inventory signals a balanced market, less than that would be a Seller’s market, more than that would be a Buyer’s market. Interesting to see that some areas are generally overloaded with inventory, while others are not so terrible.

Data from the Tucson Association of Realtors, deemed reliable, but not guaranteed.

I work all over the greater Tucson area, but there’s a special place in my heart for Central Tucson.  I’m a sucker for a red brick house with some charm and character, and for me, Central Tucson is the place to be!

In our MLS, boundaries of Central would be River Road to the North, Wilmot to the East, 22nd on the South, and Oracle-ish on the West.

Here’s another reason to love Central Tucson:

That’s a graph of Months of Inventory for all types of Central Tucson real estate, from January 2007 through July 2007.  See that nice little downward trend?  Declining months of inventory in this case is an indicator that we’re returning to more balanced levels of supply and demand in Central Tucson.  Ideally, that should keep prices steady, if not cause them to rise, in the area.  In theory, a balanced market is between 4-6 months of inventory, and Central Tucson is sitting cozily in the mid 5 months mark at the moment - signaling a balanced market for the area.

Speaking of prices, let’s see what the average and median are running for Central:

More often than not, all of Tucson takes a dip in Average Sales Price and Median in July.  In fact, when I ran this analysis with the other areas of town, all areas save one had a reduced average/median sales price in July 2007.  Since the last reported month is the one where we traditionally dip, we’ll have to wait a couple months to see if the dip is a seasonal effect or a sign of something completely different.

Altogether, I’d say Central Tucson real estate is doing okay.  Because the houses tend to be older, a lot of the homes have funky additions, or other homeowner projects that turn what was a lovely house into an odd little place.  The good stuff, in good condition, priced right, will always sell fast in Central because of the inherent demand.

Stats just released from the Tucson MLS today!

Quick Facts:

• Active Listings: 8692 units
• Number of Sales: 1098 units
• Average Single Family Home Sales Price: $295,399
• Median Single Family Home Sales Price: $235,000
• Average Townhome Sales Price: $202,050
• Median Townhome Sales Price: $182,000
• Average Condo Sales Price: $157,399
• Median Condo Sales Price: $145,888
• Average Days on Market: 65
• Citywide Months of Inventory: 7.9 months

Pending Sales and the number of Units Sold were down from last month - no surprise as they take a dip nearly every year in July.  Usually, both figures take a short trip higher in August, and begin a slow decline into the slow-down at the end of year holiday season.

The Average Sales Price ticked down to $268,983, down from $298,447 last month.  When the $298k figure came out last month, there was hubub about luxury homes skewing the average sales price figure, causing a big jump from May to June of this year.  Now we’re fluctuating the other way: I’m waiting for the reports of fire and brimstone for the Tucson real estate market based on this figure from the media.  Average price goes up, it’s just those darn million dollar homes.  Average price goes down, worlds collapse.  I prefer to watch the median sales price.

Median sales price came down to $218,750 in July, from $229,000 in June.  A little perspective: we’ve been bouncing between $210k and $229k since June of 2005.  A $10k drop feels like a lot, but we had a similar move between February and March of 2006, between August and September of 2006, and a $10k rise between January and February of 2006, with a bunch of little moves up and down inbetween.  However, the downward move in median sales price is certainly something to keep an eye on.  I think anyone buying or selling right now has felt the relative flatness of the market.  Was anyone expecting record citywide appreciation this year?  No?  Okay, me neither.  In fairness, some areas of town seem to be experiencing a small, healthy amount of appreciation.  We’ll break those down in a separate post.

We had 8692 active listings in July 2007, roughly the same as last month.  We had a nice little downward trend in the number of listings over the past couple of months - is this a plateau?  We’ll have to wait and see.

Average days on market for July 2007 was 65 days.  We’ve been in the mid sixties for 9 months now.  If you’re a regular reader, you know DOM isn’t my favorite figure.  We’ll do some months of inventory calculations in a separate post, which I feel is a more accurate assessment than DOM.

So that’s July 2007 market statistics for Tucson.  Give me a day or two to break down months of inventory and other interesting figures by area, and I’ll report back in.

Well, our MLS system made an interesting decision yesterday.  Unfortunately, the decision made by the MLS board may impact our clients adversely, and for a while yet to come.

Here’s the short story:

The MLS board decided to enforce the rule that commission amounts should be marked with either a dollar symbol or a percentage symbol.  Notice was given at the start of the month to all agents.  Upon receiving the notice, our office administrator asked for a clarification of the rule, never received a response, and was never given a deadline to have all listings corrected until about 3 days ago - when they said that all listings would be withdrawn temporarily if the were not in compliance with the rule.

So yesterday, about 3000 listings were withdrawn from the MLS system, in one fell swoop.

That’s about a third of our inventory in the Tucson MLS.

I can argue that notice was given, and that there was plenty of time to bring all listings into compliance, and I can even support having a deadline and consequences for not following the rule.  But instead of handing out fines, they decided to withdraw the listings - which can do a lot more harm to our clients than it does to ourselves.

So what about the agent and seller, who priced a home yesterday when some of the Active competing properties were shown as Withdrawn from the market?

What about the home buyer searching the MLS online yesterday? 

What about some of the smaller, one-agent brokerages?  What if they are out of town and haven’t corrected their listings?  What happens to their Sellers?

What about the monthly statistics put out by the board?  We’ll have anomalous data for a while yet.

What about all the home buyers that are on auto-prospecting systems, where new listings are emailed out to them?  They’ll be emailed with properties, seemingly “new” on the market because of the change in status from Withdrawn to Active, although the houses may have been on the market for a very long time.

So I’m sorry, folks.  As an agent and member of the MLS in Tucson, I think a poor decision was made, that could adversely affect my clients.  The actions of the MLS board punished not only those agents whose listings weren’t in compliance with the rule, but they impacted you, and me, and potentially a huge portion of the home buyers and sellers out there.  Kind of a cluster….fudge. 

The Tucson MLS has released the numbers for June 2007.  Here’s the quick numbers:

• Average Sales Price: $298,477
• Median Sales Price: $229,000
• Average Days on Market: 64 days
• Active Listings: 8725 listings
• New Listings: 2820 listings
• Number of Sales: 1226

So what does that mean?

Well, the average sales price is actually the highest recorded for Tucson, up about $18,000 from last month.  Median sales price is usually regarded as the better indicator, the theory being that a couple properties selling on the high end of the scale could throw off the numbers.  The Median sales price was $229,000, also a record high number for Tucson, up $5500 from last month.

Breaking it down into types:

• Average Single Family Home Sales Price: $324,526
• Median Single Family Home Sales Price: $245,406
• Average Townhome Sales Price: $202,887
• Median Townhome Sales Price: $163,750
• Average Condo Sales Price: $157,406
• Median Condo Sales Price: $149,950

Remember that a Condo is a form of ownership, and a Townhome is a style of housing!

Average Days on Market is not a good measure for the Tucson Real Estate market, as DOM can be reset very easily.  A better figure is the absorption rate, which would be how long it would take to sell all the existing inventory, at the current sales rate.  Balanced markets are usually in the 4-6 month range.

The absorption rate for all residential types is about 7 months.  This continues our downward trend in absorption rate, which would signal a slow return to a more normal market.  Here’s a graph - the dip in months of inventory was during our rush in 2004, you can see the buildup over 2006, and a slow decline in 2007.

We’ll get to absorption rate for the various areas and types of housing in another post.  Let’s stick to broad strokes here.

Positive indicators: a lower absorption rate, higher median sales price, and a drop in new listings (we’re pretty flooded at the moment)

Negative indicators: number of sales are down from last month when they more typically go up in June (and down in July), and our sales volume for the year is still lower than last year.

And that was June 2007 Tucson Real Estate Market Statistics!  Watch for a more detailed absorption rate analysis in a couple of days (for all you numbers geeks out there).

The Tucson MLS just released their statistics for May 2007. 

In short:

• Average sales price (all residential types) is $280,589.
• Median sales price (all residential types) is $223,500.
• Active listings are at 9721 listings
• Number of sales units is at 1313 units.
• Average days on market is 61 days.

The Average Sales price is still trending upwards, and the Median Sales price is inching up as well, though not consistently as the Avg Sales price. 

The number of listings has actually taken a small drop for the first time this year, which is a trend I’d like to see continue.  Inventory has been rising fairly steadily since 2006.  We’re still near record-setting levels of inventory, so it’s nice to see an adjustment downward for May.

The number of sales has been about the same for the past 3 months, which is a trend to keep an eye on.  The Tucson real estate market should be starting the summer sales season, when more houses trade hands than in any other time during the year.

Days on market isn’t my favorite measure, for reasons you can read in other places in this blog.  However, 61 days on market is a decrease in that figure.

Calculating Months of Inventory, using the global Tucson MLS figured provided, we’re at 7.5 months of inventory, a small decrease from last month.  It seems like we’re making a slow wiggle downwards in months of inventory, which is a nice trend as well.  Time will let us know if this will continue or not.

It’s been a long couple of days.  I’ll break out some of the per area and per residential type figures a little later on this weekend.  Questions?  Comments?  Anything in particular you’d like to see in market statistics for Tucson?

I’ve been thinking about using months of inventory (or the absorption rate) instead of days on market as a more reliable market status indicator.  Given that homes can be withdrawn and relisted to “reset” the days on market counter, we know that DOM isn’t the best figure for evaluating Tucson’s market. 

Months of Inventory makes sense to me: that’s the number of months it would take to sell off all the inventory.  There’s a myriad of ways add context to this figure, but let’s keep it simple for now.

Here’s what I’d like to learn from months of inventory:

• If all price brackets are “Buyer’s Markets” or if some price ranges are still balanced
• If certain areas of town have a higher glut of inventory
• How Months of Inventory has changed over time.  We’ll save this one for later.

If we wanted to take this a step further, we could break down price brackets per area of town.  For example, we could show numerically that the market for a $300,000 house in the North would probably be a Seller’s market, while the market for a $300,000 house in Central Tucson would favor the Buyer.  Wouldn’t that be a fantastic way to help a Buyer understand why they would have to compete for the $300k house in the North, instead of having a large selection of homes in the same price range in Central Tucson?

Let’s see what Months of Inventory tells us.

Note: I’m only considering Single Family Homes, and only in the Metro Tucson area.  I’ve excluded all of the outlying areas from these numbers, as those are markets unto themselves.  I’m using the last 30 days of sold data, and I’m not including Active Contingent or CAPA properties, as they are generally not shown nor considered when a Buyer looks for a house.

I calculated Months of Inventory per price bracket, in this chart.  The price point listed in the chart is the upper end of the bracket.

I expected to see slower sales (that is, a higher months of inventory figure) for the higher price brackets, but was really blown away by the months of inventory in the under $200k market.  The price bracket between $100k and $200k has 4.4 months of inventory, which is fairly balanced, and good news for Sellers in that price range.

In general, anything under 2 months is considered a Strong Seller’s Market, 2-4 months would be a Seller’s market, 4-6 months would be considered balanced, 6-8 months would be a Buyer’s Market, and anything over 8 months would be a strong Buyer’s Market.

I calculated a citywide figure as well: 6.7 months of inventory.

Let me restate that for emphasis.  Continue reading �

I’ve been playing with some numbers, trying to get a real (or at least an accurate) picture of our local market conditions.  Most notably, I’ve been looking at days on market and the sales price to list price ratio.

I’m hampered by the way our Tucson MLS system allows agents to access the information for Sold properties.  Exporting the information is crude, at best, so I’d say the results I’m getting are in the ballpark, but probably not to-the-decimal perfect.  I’ll keep futzing with it, to see if I can get real numbers for a broader area, and more accurate figures.

If you follow the market statistics put out by the MLS system, it calculates a straight average days on market for sold listings, but doesn’t consider any previous times that house was listed.  For example:

If 123 Elm Street was for sale by Agent X for 70 days, and then by Agent Y for 90 days, and then by Agent Z for 45 days before it finally sold, our MLS system would consider that 45 days on market (DOM), instead of the cumulative figure of 205 days on market (CDOM).

I want to know what the cumulative days on market (CDOM) is for the various parts of town.

For starters, I considered every single family home sold in Central Tucson since January 1, 2006.  Ideally, I’ll break that into quarterly figures, but for now, we’ll just average everything since 2006.

Result: Average Cumulative Days on Market from 1/1/06 to now: 95 days.

Days on Market as calculated by MLS during the same period: 47 days.

I also calculated the sales price to list price ratio, using the original listing price of the original listing.  When MLS calculates this figure, they consider only the last list price, and not the original list price.  For example:

If Agent Q lists a house for $350,000, then reduces the price to $325,000, and again to $320,000, and the house sells for $300,000, then we calculate: $300,000 / $320,000 = 93.75%.  The house sold for about 94% of the List price.  If we look at the original list price, then the house sold for 85.7% of list price.

Result: Considering the original price from the first listing, houses go for 80% of Listed price.

Considering only the most recent list price, houses go for 97% of List price.

I need more analysis before I can draw any real conclusions.  I have a good idea of what is going on, but I like to see numbers to back up my ideas.  Here’s a couple thoughts:

• Agents have been withdrawing and relisting properties to “reset” the DOM for a very long time in Tucson, it’s an acceptable practice in the area.  If the percentage of listings withdrawn and relisted has stayed fairly constant over the years, does that make the MLS reported DOM a better index of the state of the market?
• If the proportion of listings being withdrawn and relisted has increased (and I believe that it has), then calculating CDOM per quarter back through several years should show a large increase in CDOM over the past 16 months or so.
• Are Sellers overpricing their homes more rampantly than in any other time, at least proportionately?  I’d need to calculate the sales to list price ratio for several years back and watch for trends.
• I’m curious if days on market or sale to list price ratio changes for different price brackets or areas of town.  I’m also curious how days on market varies per price bracket and area of town.
• If a property truly sells in 30, 60, or 90 days, what is the actual ratio of sales price to original listing price?  I’d assume that the faster it sells, the closer it goes to the list price.
• What’s the average price reduction, and when does it occur?

You can tell I’ve got more questions than answers, and am frustrated by the restrictive data available to me.  Hopefully, we’ll get some interesting answers in the weeks to come.  I’ll let you know what I learn.

New Stats are out from the Tucson MLS for April 2007.  So what’s the state of Real Estate in Tucson?

Just the facts:

• Active Listings: 10,387
• Number of Sales: 1280 units.
• Average Sales price, Single Family Home: $298,876
• Median Sales price, Single Family Home: $237,000
• Average Sales price, Townhouse/Condo: $184,869
• Median Sales price, Townhouse/Condo: $167,000
• Average Days on Market: 65 days

Adding meaning to the Numbers:

Active listings are at record numbers.  People - If you don’t NEED to sell, get your house off the market.  Typical inventory levels for Tucson are between 4000-5000 listings, at least they were before the 2005 boom and the 2006 run-up in inventory. 

A good figure to look at is months of inventory, which takes into account both the number of listings AND the number of sales: at the current rate of sales, how long would it take for all of the houses to sell, if no other homes were to come on the market.

General rule of thumb is that anything around 4-6 months is a balanced market, under 4 months is Seller’s Market, and over 6 months is a Buyer’s market. 

In this chart, you can see our Seasonality: inventory drops during Summer, our peak sales time.  It looks like Tucson has been fairly balanced, until 2005 when our sales went crazy and inventory dropped.  Now, since 2006, months of inventory has climbed.  There was a small drop in March 2007, and we went back up a bit in April 2007.  It will be interesting to see if we’re going to bounce our way slowly back down to normal levels.

 Another way to consider active listings and number of sales is simple division: of the 10387 listings on the market, only 1280 sold - which is roughly 1 in 9 homes. 

Let’s restate that: One in nine homes sold last month.  More typical levels?  One in five.

Average and Median Sales prices have fluctuated fairly gently since the start of 2006.  They vary a little, month to month, but overall, no big movements are seen from January 2006 to today, in terms of Average and Median prices.  This indicates fairly flat prices.

Days on market has been dancing around in the 60s for six months now.  Since 2000, Tucson has averaged somewhere in the mid 50s for days on market.  Since we’re at 65 days for April, we’re still taking longer to sell than our traditional market would indicate.  Given that agents can restart the days on market clock by withdrawing and relisting the same house, this figure isn’t the best measure.  It’d be more interesting to see ACTUAL days on market, inclusive of past times a house has been listed and expired or been withdrawn.

Here’s my take: Inventory is still too high, but well-priced and well-marketed homes are still selling.  The number of sales took a small dip in April, but we’ve otherwise been following our yearly trend for number of sales this year.  It’s a good time to be a buyer, but understand that the best properties at the best prices will still move fast.  Sellers - either get serious about selling or get off the market.  Our market is still deciding where it will land.  If you don’t HAVE to sell, then don’t.  If you do have to sell, you’ve got to price aggressively and present the best home possible.  In this market, you can’t be lax about the housekeeping or the repairs if you want the best price.