We are still hearing some doom and gloom forecasting from the national media, but here and there we are also beginning to hear snippets of positive reporting, especially in our local Tucson area. So what's going on? Are things really turning around? Let's look at the numbers.
Sales Volume
Comparing numbers in December 2007 to December 2006, we see that the number of sales reported through the MLS has decreased dramatically (30%) from one year to the next. This would explain why we hear many Realtors complain of less work available. In fact, many have gotten out of the business due to lack of sales.
Sales Price
The average sales price decreased very slightly (less than 1%) from 2006 to 2007. So basically, we could say that prices remained pretty flat. In my experience working in this market, I see this number as more of an average. There are some areas of town where prices have actually decreased and homeowners have lost "value" in their homes. In other parts of town, prices continue to rise. Overall, the Tucson AZ real estate market is healthy, particularly when compared to markets in other parts of the nation.
Pending Contracts
Compared to last year at this time, we see an increase in the amount of pending contracts (18% increase). These are homes that have accepted a contract and are simply waiting to close. This is a very good sign because it indicates that buyers are starting to realize that there are good deals to be had and are taking advantage of this opportunity.
Active Listings and New Listings
New listings decreased which means that the pool of newly available homes has shrunk. However, there was a slight increase (2%) of active listings available. This is a confirmation again of what we already know, there is still a lot of inventory that needs to be purchased. If pending contracts continue their upward climb, over the next few months the inventory will dwindle as long as homeowners don't all rush to put their homes on the market at the same time.
My Analysis
The Tucson AZ real estate market is still slowly stabilizing. This is not going to be an overnight process, but instead as the inventory slowly gets purchased we will see a return to "normal", whatever that is. Truthfully, the real estate market is always in a state of change. The trick is to be able to see what the trend is and which change is around the corner.
At this point, mortgage rates are still under 6% and the last couple of weeks have seen VERY low rates and affordable mortgages. There are still a lot of great loan programs out there, especially through FHA. Because of this, buyers are going to be able to get the financing they need to make their home purchase or investment in the real estate market. Over the course of time (I still say 6 months to a year), buyers will make enough purchases to reduce our inventory and as supply diminishes, prices will again start to increase.
If you are thinking of buying, I suggest that you consult with a mortgage professional and a real estate agent to determine if you are able to do so and what is available on the market. Now is the opportune time as you won't see prices like this in Tucson again for a long time (if ever).
If you are thinking of selling, don't be discouraged. If you have owned your home for more than 3-4 years, the chances are great that you still have a lot of equity in the home. Pricing the home right, staging it for sale and effective marketing will be the keys to getting your home sold quickly even in today's flat market.
If you have not owned your home for that long, but still need to sell, give me a call. I can help you explore your options and give you the information you need to make an informed decision. My number is 520-481-3695.
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