Following up with the Fannie-Mae/Freddie-Mac fiasco, the feds are considering a $300 billion dollar bailout program that will have a positive effect on the whole industry. This should only help our market here in Tucson, should it pass. Meanwhile, we are continuing to find ourselves in a relatively balanced market, thanks mostly to the ever-shrinking inventory of homes in Tucson.
It has widely been considered that a balanced real estate market contains an inventory of 6 months. Some of Tucson has more than 6 months of inventory, and others, like central and northwest Tucson, have less. Central Tucson actually has only 4.5 months of inventory! Months of inventory is calculated by taking all the deals that have been made in the past 30 days and dividing them by the number of homes currently for sale. New deals (pending sales) are down slightly this month, and values are still flat, if not slightly still decreasing, but less new listings are hitting the market, lots of homes are still selling and interest rates are still good (6.5% +/-).
NOW IS THE TIME TO TAKE ADVANTAGE OF OUR MARKET!
You are able to do your research, take your time and make intelligent decisions. If you recall those crazy times of late 2004 through most of 2005, you may remember that our inventory level was less than 2 months. Every home had interest from others; it seemed anything good already had an offer on it, plus another one or two "coming in". Realize that by acting now, you will assure yourself the benefits of a no pressure market, see some great deals out there, and find that you probably won't have to put up with multiple offers.
We are starting to feel the heat! Things have dropped back a notch as showings have slowed and the 4th of July saw folks vacationing, taking off extra days at work, and doing anything but taking time to look seriously at real estate. That said, we are still experiencing an increase in the sales of existing homes in central Tucson. Our supply overhang still exists, but we're moving in the right direction. Financial giants Fannie Mae and Freddie Mac are on the ropes, financially strapped and looking for bailouts. Interest rates are hovering at 6.5% for 30 year mortgages, so money is still relatively easy to borrow if you have good credit and income stream. Happy Monsoons!
The market is rolling along just fine, thank you. The high heat, departure of snowbirds, UA's summer break, and perpetual negative press we're constantly exposed to, have actually not impacted the strength of our market! More deals continue to be made and less inventory is coming up for sale. Buyers, that the little gem you've been slowly falling in love with may already have an offer on the table. For the first time in a long while, buyers are experiencing more competition from others.
Though we are a ways from finishing with the down-market hangover, we are starting to make strides. It could be several months before the market starts to mitigate the downturn in value (Tucson is generally hitting about 13% off peak, and central Tucson is slightly less). Thus, it is still a fantastic time to make a purchase. It is like you have rolled back time to 2004 and have even more choice. Positive pending figures, coupled with less inventory, are keeping us in, I dare say, a relatively solid market. Keep cool! For a complimentary market analysis, or finding that little gem before it sells, please track me down at (520) 918-5258, or firstname.lastname@example.org
These next few weeks are going to challenge the market and really give it a good test, as UA recently concluded classes and snowbirds have headed north. So far, so good! The interest rates are holding, inventory is continuing downward, and, most importantly, the rate of open (pending) deals being made are definitely maintaining their more rapid rate of the past 2 months. So, good news continues, as we pull away from the low point of this market. Good luck, graduates! Give me a ring if you feel like staying right here in the Old Pueblo, and together we'll find that great deal!
OK, folks, it's time to get out there and buy. I am telling you, there is a shift in the marketplace that I am feeling. Not just personally, but talking with the other agents that work similar areas of Tucson. Stats are showing that there's more pending property (houses getting contracts and opening escrow) in March than February, and April is at a brisker pace than March. It is telling me that we may have just passed the low-point of the down market.
Inventory levels for Tucson have dropped from 15 months of inventory down to 12. You are still going to see negative articles talking about foreclosures, short sales, sellers that are upside-down, and median prices that are less than what they were a year ago. However, you will at some point, start seeing articles that touch on a better market ahead, or optimism is turning to realism, etc. And, when you actually start reading these articles, your buying experience will then, most likely, include more competition from other buyers and you may even find yourself up against multiple offers. Multiple offers were almost a thing of the past, but we are actually starting to see them again, believe it or not.
Sellers, please temper your excitement. The market is turning around because you have finally got it with the lower prices and competitive inducements. This is something to build on, we are not out of the woods by any means. Just a heads up...this extended down market we've been in is not going to last forever. And, there are definite signs we are pulling away from it.
If you are a buyer, you might as well take advantage of it now. Your interest rates are back down below 6% and your choices are still many. Your competition level is still low to medium. This will change to high, once the whole market catches on that we are in an upswing, so you may as well keep ahead of the curve on this!
Just to go along with the stats of 3/6/08, there is a decided lessening of inventory this year versus last year. This is pretty good news and the trend should continue. Sellers are getting it, keeping off the market if they are only trying to test it or hoping for a quick turnaround coupled with false notions of easy money.
This smaller inventory trend shall keep our depreciation of value down to a dull roar. Yesterday's Arizona Daily Star front page article of Tucson's median price of a home being 9% less than the year before, is pretty accurate across the board. Most of the central neighborhoods are running about 10% down from their peaks in 2005. Some pockets have experienced less depreciation, others more so. Suffice it to say, I am seeing depreciation running between 5% and 15%, depending on the exact pocket neighborhood.
FHA has put Pima County's loan limit up to $316,250 earlier this month. This is great news. This means, for qualified buyers, an FHA loan can be had up to this amount, tens of thousands higher than it used to be, with only a 3% down payment. FHA is now much more streamlined as they have been trying for years to compete with conventional financing. We should begin to see an increase in buying because of this.
Remember, although this is not the greatest market to be selling in, if you bought prior to 2004 or 2005, you should still be ripe to receive a tidy gain on your investment. (Provided you haven't refinanced to squeeze cash out of your growing equity). And, if you purchased several years ago, then you stand to make out very well. Sellers experiencing the most difficulty are those who have purchased within the last couple years. Good luck and Happy St. Patrick's Day! ~ Alan
Well, the only March Madness around here is wondering what happened to the market! City-wide closed sales production numbers are in and they are not pretty. We are off 25% from last year, and that year was down 25% down the year before. So, production is down 50% from 2 years back. The sprawl of new construction on the outskirts of town is skewing the next set of figures, inventory time. At this time, Tucson as a whole, is pegged at 15 months of inventory. If no other homes were listed for sale, this is how long it would take to sell everything currently for sale.
Central sellers can at least enjoy the fact that their neighborhoods have less inventory build-up than our city-wide stats, 6 months of inventory is about average in central. Some central pockets are experiencing even less time. Hang in there, Tucson. There are many cities around the U.S. that have it much worse than us. Plus, we really have held our values compared to much of the country.
Financing is readily available and interest rates are down. This fact, plus the higher inventory, equate to a real break for purchasers. Don't get bugged by constant negative housing press you read. Finding a great deal out there is not hard and you won't have this chance forever. And one thing you won't miss, the once ever-present investor buyer from out of town will most likely not be challenging you for the home, as they have all but vanished from this market. You will be happy, you have leverage, you have choice and opportunity is knocking!
On the other hand, you sellers out there should hold and maintain if you don't truly need to sell. Let a little time burn off the clock. There will be a better day for you in the future. If you must sell, remember to be exceptionally well-priced and it will happen for you.
HEY! Is this a great market to sell in, or what? (Huh? What did he just say?...didn't he mean "buy"?!) Uh, no, although, this is a great time to buy, absolutely. And, if you really don't need to sell, or are trying to flip your way to riches, then NO, this isn't the best market to operate in. But, it can be a great market to sell in, believe it or not. If you have your home priced exceptionally well, your home will actually stand out so significantly, that there is a great chance of attracting a serious buyer, and quickly, too.
There are so many home choices out there for buyers of Tucson property. On one hand, buyers are waiting to come across that one house that has all or most of what they want, and that its price is being perceived as a "smokin' deal". On the other hand, there are hundreds of sellers thinking they are "priced right". And right there is the essence of the incompatibility of this market. "Priced right" is not getting it done. A successful-minded seller needs to be priced even better than "priced right".
Successful sellers need to take a deep breath, get away from thinking that they 'going to take a bath on this deal', and move to a mindset of, "If I really have to sell my house right now, my home needs to be exceptionally well priced." Believe me, you will be happy with the results. Today's Tucson buyer is looking for you. Your home will stand out like bright red on a white target.
Take it easy, Mr. and Mrs. Seller, the majority of Tucson neighborhoods have not lost much property value, if at all, it has been fairly flat for 2 years. A lot of our "dead" inventory out there stems from sellers thinking that value has gone up since 2005, and false appreciation has been added to their asking prices. This is a big reason you constantly see asking prices being reduced. A truly wise seller can enjoy having this competition help sell their home.
For assistance in pricing your home to sell in this market, allow me to give you all the accurate facts and track me down at (520) 918-5258. Hope you all enjoyed Valentine's Day and all the best for the rest of the month!
Anyone wish to venture a guess on how we ended up the year? As far as value appreciation / depreciation for all Tucson residential property as a whole, year ending 2007 v. year ending 2006? Down a little bit? Down a whole bunch? Up a little? Well, you would be right if you guessed the third choice. We ended the year UP, +1.1 % from year end 2006. So, in light of the scary stories you hear every day and and the semi-panic the media would lead you to believe we're in a state of, we still ended UP.
This is a great market to buy! Buyers out in our marketplace are experiencing low rates and their choice of homes numerous. There is a pent-up demand sort of floating around the sidelines and one gets the feeling that the market could be heading into a stronger phase. By the way, another interesting stat from 2007... Several months in the 2nd half of the year saw a decline in the number of homes for sale, while, at the same time, an increase was noted in overall deals being made. Have a Happy Valentine's Day! ~ Alan
Wow, the feds cut the federal funds rate again, this time by 3/4 points (75 basis points)! (Mortgage rates are currently hovering around 5 1/2% for a fixed 30-year mortgage, and below 5% for a 15-year fixed) So, what does today's fed-rate cut mean for us? A probability that rates will at least stay nice and low, and, will most likely head even further south! The interest rate climate we're currently experiencing is the kind where you will start hearing things like "mortgage rates are as low as they have been for x (several) number of years", or, "wow, just buy the home to get that wonderful interest rate!" Have a great rest of the month...
Well, so far so good, this year. Although there is no denying that the market is still slow and inventory is still high, it really isn't all that bad. Buyers are starting to see some fairly well-priced homes out there, and it has resulted in them getting excited and making offers. Sellers are finally starting to realize, in order to entice those fewer-and-farther-between buyers, they really do need to be priced right. Some of them are pricing their properties extremely competitively and they stand out from the competition. These sellers find themselves with great market reaction and offers on their tables. Deals are turning. Values have not dropped horribly, particularly in the central neighborhoods. Some central areas have held serve, others have sustained a downturn of a few percent from a couple of years ago. Other areas have, unfortunately, seen worse. But, it is looking like we are going to land on our feet.
Among all the doom-and-gloom articles we see almost daily, there was recently an upbeat article in the Star. It was quoting the heads of Long Realty, Coldwell Banker, Realty Executives and Tierra Antigua. The concensus was, the market will be skimming the bottom for a while, followed by an actual increase in value realized towards the end of the year. They talked of an emergence of pent-up demand stemming from so many waiting on the sidelines for so long. Yes, it is true, these real estate leaders tend to be the ever-optimistic types. But, personally, I believe these statements to be, not only bold predictions, but a logical, well-thought out way to view 2008.
So far this month, I am observing some good activity compared to the last quarter of 2007. We may well be seeing the bottom of the market, right now. With the lower interest rates and the many home choices out there, it may be the right time to track me down and do some house hunting! You may time it just right to beat that pent-up demand we should experience after the mortgage industry rights itself and articles start moving from doom-and-gloom, to how our market is showing signs of strength. As always, I may be reached at (520) 918-5258... I look forward to helping you reach your goals this year, and cheers ~ here's to a great buy in 2008!
1st bit of good news thus far... interest rates for 30 year mortgages are actually breaking below the 6% figure! As would be normal, 15 year mortgages are even lower, breaking under 5.5 %...
EVERYONE, HAVE A GREAT NEW YEAR ~