So how's the market? That seems to be everyone's favorite response when they find out I'm in real estate. I appreciate the question because it means that people want to know from a local expert instead of relying solely on the media for information. The market was kind of blah for the month of July, although I am personally experiencing heightened buyer activity and expect that to be reflected in the numbers in the next two to three months.
Home Sales Volume and Home Sales Units
As usual, I will compare home sales volume and homes sales units by those same categories a year ago and a month ago so you get more of a feel for how things are moving instead of simply a snapshot in time. Things are getting interesting in this category. We are still seeing a decrease since last year, 24% and 20% respectively. And month over month, those numbers declined by 9.5% and 8.6%. The interesting part is that last year, month over month the numbers declined by 22% and 14% respectively. So while July's sales volume tends to dip a little compared to June, our dip this year was less than our dip last year. That's encouraging, but not as a stand-alone figure.
What I find to be more encouraging is that our annual percentage change in the month of June 2008 compared to June 2007 was 34% and 25% in these categories. Now that you're sure I've lost my mind or that I took one of those "Realtor Optimism" pills, let me explain. If you read my market report from last month (Tucson Market Experiences a Hiccup - July 2008), you remember that our numbers dipped suddenly after months of steady improvement. So I am happy to see that our numbers have come back into a respectable range again instead of matching last month's numbers. I am hopeful that overall we will continue to make steady progress and our market will be solid once again.
Median and Average Sales Prices
The median and average sales prices of Tucson homes actually stayed almost exactly the same as they were last month. If you are a regular to my analyses, then you know that I don't put a lot of stock in these numbers because they can be skewed by larger numbers of homes at either end of the price spectrum being sold at any given time. However, it's nice to consider the numbers as part of the greater picture.
Pending Contracts
There were 11 more homes in July of 2008 as opposed to June of 2008 that went "Pending". A pending contract means that all contingencies have been removed and the parties are just waiting for the closing date to roll around. This is a mere 1% increase, which is negligible. The annual change is actually a 45% decrease. Even with fewer listings on the market, we are going to need the pending contracts to increase (as well as the home sales volume) in order to keep us moving forward. I mentioned last month that we are seeing increased difficulties and decreased cooperation from banks. This month I am working with a bank that seems to be motivated to get my short sale closed. If more banks become like-minded, short sales will remain attractive and things will keep moving. It's a patchwork out there, though. Some banks are great, while others seem to be trying to lose money!
Active Listings and New Listings
We still see movement in a positive direction in the Active Listings and New Listings categories. For example, there were 20% fewer New listings in July than there were in June. As compared to July of last year, the decrease was 39%. However, we must compare these numbers with others to get the full picture. Even though new listings are decreasing, if listings are remaining on the market for longer, we could still have an extremely high inventory. That's why we also look at Active listings. That category decreased 3% month over month, but a little over 9% as compared to last year. This is good, but it hasn't caught up with our home sales volume and pending contracts numbers yet.
We're headed in the right direction, but have more work to do. For July 2008 the Home Sales Units and Pending Contracts totaled 1,905 homes. Our total Active Listings totaled 7,876 (under 8K for the first time since March, 2006). This is a four-months supply of homes, which is not terrible. For comparison, in January of 2008, using the same method of computation, we had a 5.5 month supply of homes available and in April of 2008, it was only 3.5. It will be interesting to see where the numbers head as we go into the traditionally slower fall and winter seasons.
My Analysis
I am pleased to see that our numbers did not match last month's "hiccup", but would like to see them get better. If what I am seeing out in the field is any indication, then they will. If our supply continues to drop to better match demand, we will see a more stable market. However, that will mean that fewer people are selling their homes and the flow of money in our economy will have slowed down. Ideally, it would be nice if demand would rise more to meet the supply. With the amount of investors taking advantage of current conditions, that could very well be the case. We shall see. I am very late this month in writing this analysis due to the fact that I have been working more, so the next analysis should be in just a couple of weeks. Stay tuned...
By the way, different areas of town are experiencing different market conditions right now. My analysis here is general, covering all of Tucson. However, if you are thinking of buying or selling in a particular area of town, give me a call and I would be happy to get numbers specific to your area and even your neighborhood to you. I can be reached at (520) 481-3695 or RWillis@gotucson.com.
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