For the last couple of months I have been predicting that the Tucson Real Estate Market is on its way to a recovery.  The most recent numbers (March 2008) confirm that we are indeed headed in the right direction.  From working in the market, I can also tell you to expect April and May numbers to be even better.  On more than one occasion in the past couple of weeks I have seen buyers who waited a few days to put in their offer only to find out the house they were interested in had received an offer from another buyer.  Buyers are indeed out and using their purchasing power to take advantage of today's very affordable home prices and our excess inventory will be cleared off the market in the very near future.  Here are the numbers:

Home Sales Volume and Home Sales Units

We see a huge increase in both of these categories this month which is a nice contrast from the past few months.  The increase was 25% and 27% respectively.  So not only are more homes selling this month than last month, but there is a large difference in last spring to this spring.  Considering that our major softening began in early '07, this is a good sign.  We are indeed on our way to recovery and should face a more normal market as buyers and sellers regain a feeling of confidence.

Average Sales Price

The average sales price decreased by about 1%.  This makes up for last month's increase of 1%.  Not much is happening in terms of a change in sales price.  To me, that is to be expected.  Even though sales volume is up and buyers are out there, they have not cleared out enough inventory to change the supply/demand curve to make prices rise.  Even if they continue buying at this pace for a few months, prices may stay somewhat static because sellers may respond and begin putting more homes on the market.  It remains to be seen how sellers will respond to the market change.

Active Listings

Active listings decreased by about 2%.  That is not too much of a change from last year, but is a change from the past couple of months.  Could we be seeing a tentative return of seller confidence?  I'm not sure yet, but am looking forward to seeing what happens over the next 30-60 days.

Pending Contracts

A huge jump in pending contracts occurred this month, with an increase in 31% over last year.  So active listings are close to the same number but many more of those are being sold.  We are indeed seeing our market turn around and considering how much more activity I am seeing actually working in this market, I expect to continue to see a high number like this in next month's pending contracts as well.

My Analysis

We are at the bottom of the market price-wise, from all indications.  We do still have a wild card out there in that we don't know how many more foreclosures will be listed on the market.  However, I am starting to see predictions that we are in the final innings of the credit crisis as well.  If you are thinking about buying and were waiting for things to bottom out, this is your final chance.  Prices are more likely to go up than down from here and mortgage rates may not stay this low either.  I certainly don't see prices falling any more, although you may have a couple of months of them remaining fairly stable as we clear out what is left of our housing inventory here in Tucson.

If you'd like to see what's available in your area, email me at Robin.Willis@azmoves.com or give me a call at (520) 481-3695.  Happy house hunting!