Tucson Market- More Localized Than Ever

The leading story in the residential real state market as we head into 2009 has foreclosures in its headline. Pima County experienced a 65% increase in the number of foreclosures for 2008 over 2007. It's important to put this in perspective since this is a relatively mild increase compared with the 171% increase in Maricopa County foreclosures in 2008. In Pima County, 1.2% of households are in foreclosure compared to 4% of Maricopa County households.

Foreclosures have impacted both the new home market as well as the resale market in Southern Arizona. The fourth quarter of 2008 will be the lowest on record since 1990 for the number of new home construction permits issued in Southern Arizona. There were 248 new construction closings in November, so far the fewest of any month in 2007 or 2008. The median sales price for new construction was down from $210,000 in October to $201,035 in November.

In the resale market, the Median Sales Price dropped to $167,900 in December, down from November's $178,000 and the February, 2006 high of $279,900. December's drop is 20.05% from December 2007 and 16.04% from November 2008. These significantly lower prices undoubtedly reflect the large number of foreclosed homes on the market.

Average days on market decreased for the fourth month in a row in December, down to 75 days. Active Listings decreased 4.61% from November and were down 12.41% from December of 007. Total number of Active Listings of 7,627 is down from November's number of 7,996 and represents 10.5 months of inventory, down from 12.5 months in November. This reduction in inventory is a bit of good news for Sellers since inventory is seen as an indicator of housing demand. When inventory levels go down, many experts believe this is an early indicator that the housing market is primed to improve.

The Tucson Association of Realtors report that Home Units Sold increased 22.05% from November to December and Home Sales Volume increased 13.08%. December's Home Sales Units of 775 topped the previous year's figure of 753. However, pending contracts decreased 9.60% from 677 in November to only 612 in December.

So, is it a good time to buy? Interest rates continue at historically low levels, deals abound and the decrease in inventory support a possible bottom of the housing market. If you have stable employment, a good FICO score, enough cash for a substantial downpayment, and take your time finding the right home at the right price, many feel that it's the right time to buy.

Is it a good time to sell? Homes in "model home" condition, priced right and located in desirable neighborhoods continue to sell quickly. Take the time to get your home in tip top shape, be realistic with your asking price and sell your existing home before you buy a new one so you don't experience the pressure of two mortgages.