What Kind of Financing do Central Tucson Home Buyers Use?

October 6, 2009 | By Kelley Koehler | Filed Under Home Selling, Loans and Financing

I was talking to someone the other day about the current market in Tucson and about home buyers having more cash than before, and using more FHA financing than ever before. Clearly, there’s been a large change in home financing rules. In my recent experience, I’m helping people buy homes here in Central Tucson largely with FHA financing – or with cash.

So I ran some numbers this morning. Because that’s what I do.

So far, in 2009, the financing for closed home sales in Central Tucson break down like so:

263 cash transactions, with an average sale price of $144,401, which is 30% of the sales.
342 conventional loan transactions, with an average sale price of $223,091, which is 39% of the sales
246 FHA transactions, with an average sale price of $157,661, which is 28% of the sales

Compare that to 2007, where cash transactions were 13% of the market, conventional sales were a whopping 82% of the market, and FHA was a mere 2% of sales in Central Tucson.

And in 2005, FHA was just 1% of the Central Tucson market. (Conventional was still 82% and cash was 14% of sales.)

Big shift? Yes indeed. The cash is back – but it’s quiet cash and those folks are picking up the bargains, many of them investment properties. And FHA is bigger than ever. If you’re trying to sell a home in Central, it might behoove you to make sure the house will meet FHA financing requirements. Otherwise, you’re cutting out a large chunk of the home buyers out there today.

tags: fha, financing, home buyers, home selling, market shift, tucson

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