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Tucson Real Estate Market Report- June 2008

By
Real Estate Broker/Owner with eXp Realty BR562939000

Well, we have reached the dog days of summer, the time each year when I question my sanity for living in this sun scorched city.  As I eagerly await the arrival of the monsoons and the cooling temperatures that they bring, I will take a minute to talk about what is going on in the Tucson Real Estate Market.  I will compare numbers from May 2008 to May 2007 and will also talk a little bit about the change between the numbers from April 2008 and May 2008.  My numbers are obtained from the monthly statistics published by the Tucson Association of Realtors so they don't contain statistics for homes sold that were not listed on the MLS.

Home Sales Volume and Home Sales Units

These numbers are still down substantially from last year, although the number for Home Sales Units would be the one to focus on more as lower prices this year make the decrease sharper by volume than it is just by unit.  The home sales units have decreased 27.7% from May of 2007, although the month to month volume increased slightly (5.34%).  So we sold a few more this month as opposed to last month, but still less than we were selling last year.

Median and Average Sales Price

These are still lower by about 10% than last year.  However, I hate these categories because there is no differentiation regarding what categories of homes are selling.  For example, in a month where mostly homes under $200,000 sold, these categories would be lower than in a month that saw a surge in homes selling that were valued at over $1,000,000.  Until there is some clarification, these categories do not provide an accurate picture of what is going on in the real estate market.

Pending Contracts

This is an important category because it is forward looking.  For example, even though last year at this time home sales volumes and units were up, the pending sales were slowing down, indicating a slowing market and problems ahead.  This year, we are seeing pending contracts up by 25% from last year's numbers.  As opposed to last month's numbers, the pending contracts decreased by about 4%.  This is a small number, but is something to keep an eye on.  Fortunately the new listings decreased by over 6% month over month so our pending sales are still outpacing our new listings on the market.

Active Listings and New Listings

Both of these categories have decreased since May of 2007.  This is great news for the future because pending contracts are up.  We are still making steady progress towards clearing excess inventory off our market and making the balance between buyers and sellers more even.  In the meantime, it's a great time to be a buyer.  Active listings decreased 12.3% from last year and 3.2% from just last month.  This is a good sign for future stability. 

An even better sign is that new listings have decreased by 23% from last year.  This is the time of year when sellers are usually putting their homes on the market moreso than in other seasons and yet sellers don't seem to be rushing to do so this year.  This will mean that as buyers continue to purchase properties, the inventory is shrinking much faster than if sellers were also getting out there and putting their homes up for sale.

My Analysis

I still hear people predicting that prices will continue to decline for a while.  This may be true in other parts of the country, but I disagree with that prediction for the Tucson, Arizona real estate market.  Because inventory is shrinking on a monthly basis, it is only a matter of time before prices actually start to increase.  Additionally, interest rates are on the rise which makes homes less affordable even if they are lower priced.  I never pressure a client to buy a home if he/she is not ready, but I am sounding the warning now:  Price-wise, this is as good as it is going to get in the foreseeable future.

We have already seen foreclosures and short sales flooding the market and while they are still occurring, banks are starting to wise up and try to work with their customers to prevent those situations.  This is an awesome turn of events for those who find themselves in that predicament and yet it also means that the likelihood of a flood of new foreclosed homes coming on the market is slim to none.  I'll say it again.  If you are thinking about buying a house in Tucson, this is as good as it gets.  Get it now so you won't be looking back six months from now wishing you had taken advantage of the low point in the market.

Posted by

Robin Siddle

www.TucsonExpertAgents.com

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