Another opinion on the current Tucson real estate market

Posted at 8:49 AM, Nov. 10, 2008

 The following link came across my email this morning. I think it is pretty objective about the general Tucson market and may even provide an insight into other markets as well.

 

Enjoy!

Charlie

Land, home sales quiet for the moment, but growth, sales will be back

By Ed Egger, Inside Tucson Business
Published on Monday, November 10, 2008

 

http://www.azbiz.com/articles/2008/11/10/news/doc49147e7931210104085674.txt

 

 

Where are we in the current real estate cycle

Posted at 3:48 PM, Oct. 22, 2008

 Every so often during the current economic climate you come across an article that is well written and makes sense. So, please click on the following link if you want to know where we are in the current real estate cycle and what you should do..

http://rismedia.com/wp/2008-10-21/where-we-are-in-the-current-real-estate-cycle-and-what-it-means/

 

 

Interview with NAR Chief Economist

Posted at 9:07 AM, Sep. 24, 2008

 Clicking on the following link will bring up a recent podcast with the Chief Economist of NAR, Lawrence Yun. He believes that in most housing markets we may have reached the bottom and 2009 will be a strong year for real estate.

http://link.brightcove.com/services/link/bcpid1803212607/bctid1811454285

Charlie

Buy Land!

Posted at 2:32 PM, Sep. 21, 2008

With all the turmoil in the various financial markets and the inevitable question of "what do I do with my investable money now?", I have the answer: Buy land! With the cost of building a new home (and the associated hassels) many people in the past two years have opted to by "used" homes. This has caused land prices to pause and recently decrease in many markets. Our market is no exception and 5 acre parcels which we never had enough of are plentiful at this time. Prices are good and owner financing is available. (Where else can you get 7 or 8 per cent on your money?) So, if you are wondering where to make your next investment, I say buy land. Call me or check our website, www.sonoitaproperties.com, for the latest inventory.

August Mountain Empire real estate summary

Posted at 4:14 PM, Sep. 9, 2008

 How are we doing in the Mountain Empire this past month? Not bad in some respects. In a typically slow period of our selling year, we had 2 lots and 5 homes go in escrow. Sales is another story as only one lot sold and that was for $88,000. In 2007, 4 homes and 6 lots closed escrow for a total of $3,500,000. 

Since a month does not a year make, we need to look at the year to date before forming a conclusion. In 2007 there had been 57 closed transactions through 8 months. These were split almost equally between land and homes. The total was $22,784,000. In the same time period this year, there were 25 transactions closed for a total of $14,201,000. So, we have had less than half as many closings and dollar volume is off 38%. The good news for sellers is that the price per square foot is up to $225 for $193. The bad news for sellers is that the price per acre is down to $15,548 from $19,500. Thus, as we have said for a while, land sales are still trying to recover from the boom times while home sales are recovering albeit with fewer transactions.

I continue to see more internet and foot traffic and have recently written contracts for both homes and land. To see waht is for sale, please check our website, www.sonoitaproperties.com.

 

July 2008 Market Report

Posted at 1:48 PM, Aug. 12, 2008

No real surprises this month. In 2007, we had 4 home transactions and in 2008 we had 6. The total volume was down about 10% as the increased number represented more less expensive homes being sold. For the homes sold in 2008, the median price per square foot was $206. Land sales accounted for 2 transactions this July and 3 last July. Dollar volume in 2007 was considerably higher.

The year to date numbers are probably more meaningful. For 7 months in 2008, there were 20 home sales. The median price was $225 per square foot and the average time on market was 216 days. In 2007 we recorded 22 home sales at a median price of $193 per square foot and 101 days on market. Land sales are the real story of this year as they are definitely sparse or spotty. This year for the first 7 months, 26 lots were sold at a median price of $15,450 per acre. But, in 2008, 51 lots sold at a median price of $19,500 per acre! Where have all the folks gone that want to build their dream home in the Mountain Empire??

How about actual deals in July 2008? Well, one home and one lot went into escrow. Certainly nothing positive to write home about.

As the Tucson market continues to stabilize, our market will again trend up both in price and activity. For those of you waiting for a "better deal', I would not hang out on the sidelines much longer. I just had a client lose a home in a bidding war and this home had been on the market for almost 9 months! I have a small business for sale. In over nine months there has been minimal activity on this opportunity. Now there are three people expressing serious interest.

June market update

Posted at 10:26 AM, Jul. 18, 2008

I would first like to begin by saying that this is not a "bad" market. It may be spotty, but properties are selling. They are selling if they are perceived as "good Values" to the consumer. The buyer is there. Money is there. And your home or lot will sell if it is priced properly. Any REALTOR® who happens to be moaning about how bad the market is, either has listing that are not properly priced or is not marketing himself or herself to attract buyers to the good values in the market. That said, here come the numbers:

The residential market in June saw 2 homes go into escrow and one escrow close. This compares with 2007 where 2 homes also went into escrow and 2 homes closed. (Since June is not a "hot" time in our market, these numbers do not mean the market is anything other than normal for the month.) For the six months of 2008, we are showing 16 homes that sold. The total value of those homes that sold was $6,785,904. The median price per square foot was $213 and the average days on market was 229. Interestingly, there were three sales over $700,000 which is the higher end of our market. In the first six months of 2007, 16 homes also sold. The total value was $7,128,000, the median price per square foot was $183.95 and the average days on market was 110. Only one home sold for more than $700,000. So for the first 6 months of 2008, it would seem as if the market is not off very much or not at all for homes, and prices may even be up a bit. So much for doom and gloom in the Sonoita-Elgin-Patagonia home market!

The land/lot market is a little different continuing its "softness" that began 12-18 months ago. June 2008 saw 1 lot go into escrow and 4 escrows close. In JUne of 2007, 1 lot also went into escrow and 5 lots closed. Not much difference. For the first six months of 2008, there were 23 land sales with a median price per acre of $15,500. The total value was $3,543,840 and these lots were on the market for an average of 134 days. In the previous year, 49 lots closed escrow (more than twice as many!) with a total value of $8,751,890. The median price was $19,150 and the average time on market was 82 days.

In summary: The housing market is just fine, but the land market is definitely "off" with sales down and the median price per acre down almost 20%. I do not see the land market improving until our home inventory declines, (there are more than 70 on the market today representing a two year supply), and the cost to build retreats. For sellers, pricing is everything at this time if you want to sell. For buyers, there is much to choose from and now is a good time to buy.

The most frequently asked real estate question today

Posted at 2:28 PM, Jun. 18, 2008

Hardly a day goes by when I don't encounter someone I know who asks me: "How is the real estate market?" The answer is simply, "spotty". There are buyers showing up, but there are very few who are actually purchasing property. The current buyer expectation is that there will be a better deal tomorrow. That's not necessarily so - and when tomorrow comes and prices are rising, that buyer is not going to be happy. So, if you are serious about buying property in this market, do it now. There is plenty to choose from and deals can be made.

May 2008 Market results

Posted at 4:56 PM, Jun. 6, 2008

As expected, May 2008 was a spotty month for sales (closings). Adding that to the normal slow market at this time of the year and the results make sense. That's not to say the market isn't "off", but it is hard to tell what is happening during a traditionally slow market time. Having said that, the numbers for escrows don't look so bad and they more accurately reflect "sales" that occurred in may, but did not close. (In my case, I didn't have any closings in May, but I had three properties go into escrow.) Now for the numbers: One home sold for the listing price of $390,000. Three lots sold at a total value of $337,000; about 92% of listing price. -- For the first 5 months of 2008, 15 homes sold at an average price of $432,560 (95% of listing price) and 225 days on market. The median price per square foot was $206. There were 19 land sales at an average price of $139,626 and 125 days on market. The median price per acre was $15,600. June closings and (beyond) include 7 homes and 5 lots. Included in this is one home listed at $1,800,000 which has been on the market for several years. It is still a buyer's market. There are 76 homes currently for sale which represents about a two year supply! They range in price from $105,000 to$1,525,000. Our primary market of under $400,000 homes included 29 properties which is unusually high. --- There are 182 parcels of land for sale ranging from $31,900 to $1,445,000. If you are interested in this area, now is as good a time to buy as I have ever seen! Check our website, www.SonoitaProperties.com, to search for properties that are of interest to you. Happy hunting!

April 2008 sales statistics

Posted at 3:43 PM, May. 6, 2008

April this year turned out pretty much as expected. The buyer traffic has been way off during what is traditionally our peak time. So when we see the numbers for April (most of which are for escrows opened in March), we are only confirming what we really knew. The market is spotty at best. Some escrows, some closings, some buyers, but not the activity that is anticipated for this time of the year. Now for the numbers: There were 4 LAND closings in April for a total of $$405,500. In 2007, there were 9 closings for a total of $2,078,300. There were 2 residential closings in April 2008 totaling $1,385,500 versus 4 the year before totaling $1,715,000. In truth, I think we are seeing more activity already in May which is a bit unusual. Maybe the tide is turning ever so slowly!

First Quarter 2008 Sonoita Real Estate Market

Posted at 3:27 PM, Apr. 1, 2008

The angst of the first quarter of a slow year has been slightly, but not much, over-played. There was certainly a lack of buyers coming through the doors of real estate offices in this area, but there were 23 closings. Admittedly, several of the homes had been in escrow since the end of 2007. What is more telling is the fact that there are only 6 properties in escrow at this time; Five of these are lots (3 of which are in Rain Valley) and the other is a home in Patagonia. Now for the numbers: Total sales for the first quarter of this year were $6.2MM versus $7.4MM for 2007. This represents a drop of 17%. Total sales for the month of March were $3.1MM consisting of 5 land transactions and 6 home sales, two of which were in escrow last year. The market is not strong and not yet normal, but it could be worse!

February 2008 Sonoita Real Estate Update

Posted at 2:33 PM, Mar. 4, 2008

We need buyers! We have a very good inventory supply of both homes and land, but the buyers have been hiding so far this year. There has been some more traffic in the past week or so through the neighboring restaurant. I am optimistic that we will end the spring talking about the strength of our market versus many other markets in the United States. Now for the numbers: Ten homes were listed in February at an average price of $249 per sq. ft. Prices ranged from $400,000 to $1,800,000. Thirty-three land parcels were listed at a median price of $20,000. This number is imbalanced to the high side due to listings in Three Canyons which are special use lots and a couple of lots less than one acre in size. Prices ranged from $35,000 to 295,000. There were 5 closings totaling $995,000 and consisting of 2 homes and 3 lots. New escrows amounted to $2,601,700 split between 6 homes and 3 lots. This latter statistic may indicate some strength building in the market. We won't know until we see the numbers for March. At the risk of being repetitious, now IS the time to buy. We have willing sellers, lenders with money at historically attractive rates and one of the very best places to call home.

January 2008

Posted at 2:58 PM, Feb. 1, 2008

The first month of 2008 was surely nothing to write home about - unless you don't like to write about good things. Three houses and three lots closed escrow. Those were carryovers from escrows opened in 2007. The total value of those transactions was $2,345,400. Total new escrows included just 4 land transactions. The market value of those transactions was $832,000. The final numbers for 2007 were 67 land transactions valued at $12,290,815 and 45 home transactions valued at$20,916,405. This put the total market at about $33,000,000 which is below our norm of around $40,000,000. Our inventory levels are quite high at this time. The five year average of homes sold is 43. With 64 homes on the market, we have an 18 month supply. Sellers are encouraged to consider carefully their asking price or else be faced with their home remaining on the market for an extended period of time.

Tucson/Pima County real estate outlook for 2008

Posted at 7:07 AM, Jan. 26, 2008

Although this link will take you to an article about the Tucson and Pima County real estate forecast for 2008, it is still relevant for our area. Bottom line: it really is the time to buy. http://www.azbiz.com/articles/2008/01/24/construction_real_estate/doc4787b064eb52b904254157.txt

The Year Past - 2007

Posted at 3:50 PM, Jan. 18, 2008

In many senses 2007 was a "normal" year for the Sonoita market. In many ways it was abnormal. It was normal from the standpoint that about $33,000,000 in sales closed throughout the year. It was abnormal form the standpoint that 45 homes closed (normal is about 25 to 30) and 67 land parcels closed (normal is about 75 to 85). We also had one large commercial transaction valued at $1.35 million. More numbers: The median price for land was $19,000 and the median price for homes was $192 per square foot and $379,000. The largest land transaction was an 80 acre parcel on the Elgin Road which sold for $1,100,000 or $13,750 per acre. We had 7 homes sell for $750,000 or more with the highest price being $1,670,000 for a 3,800 sf house in the Crown C. Has there been any softness in our market? Not really. Most properties are selling within about 8% of asking price, but land prices have had more "negotiation". Not much, though. Our buyers have shifted from buying land and building a house to buying an existing home due to the higher costs of construction at this time. This will change, probably this year, as the housing market firms and prices move up. Given the above, is this the time to buy? Everything I read and my own personal opinion is that there is no time like the present. Prices are good. Mortgage rates are low and money is available.

May to November 2007

Posted at 5:26 PM, Nov. 30, 2007

Is this market normal or is it tracking the national decline? Neither. If we look at the overall activity for this year, it will probably turn out to be a "normal" year. If we look under the microscope, and specifically the past six months, our market is strong but very different. There are currently 50 or so homes on the market between Patagonia, Sonoita and Elgin. That is a bit above normal inventory levels, but when you consider there are 18 homes in escrow, the number is way above the norm. It is particularly skewed when you consider this is a normally slow sales time. So far this year, 35 homes have closed ranging in price from $55,000 to $1,670,000. The median price was $379,000 and the median price per square foot was $185.00. With the price to build a new home, exclusive of land costs, at $200.00 per square foot or more, buying a house in the resale market makes for prudent economic sense. This is undoubtedly what is driving our housing market. Land is another interesting situation. There are about 160 parcels on the market ranging up to 240 acres. So far there have been only 68 sales with the lowest price being $32,000 and the highest being $1,100,000 for an 80 acre parcel. The median price was $122,500 and the median price per acre was $19,075.00. That also means the average parcel size was just under 6.5 acres. It looks as if we are heading to a total market of something over $60,000,000 this year. That is very healthy! If you are looking to buy in our market, I would suggest there is nothing to be gained by waiting. In fact, it would seem that just the opposite might be true. (All figures above are based on dat from the Tucson Association of REALTORS(R) Multiple Listing Service. They are presumed accurate, but may not include all transactions in the market.)

Luxury Home Sales

Posted at 10:18 AM, Nov. 8, 2007

The market for higher priced homes in this area is quite healthy this year. Through the end of October there were 4 sales totaling $5,299,000. The most expensive home sold was $1,670,000. Currently there are 3 homes pending and expected to close by the end of the year. They total $2,550,000 as listed. Should they close, we will have our best year in this category since I have been here (9 years). Our previous best year was 5 home sales. The current inventory of luxury homes, (homes priced at $750,00 or more), has 20 listings. These range in price up to $1,750,000. That number represents 3 years of sales so if you have a home in this category, do not expect it to sell quickly!

How's the Sonoita-Elgin market?

Posted at 8:06 PM, Oct. 31, 2007

The 2007 real estate market is now 20 months old. The end is in sight. How has it been so far? What can we expect for the last 2 months? The first 10 months of 2007 have been good. The national real estate dynamics do not seem to be affecting this market - so far. The Tucson MLS has recorded 34 residential sales and 63 land transactions. There has also been one commercial sale. The total sales for land and homes was $27,209,300. The commercial sale was $1,395,000. The most expensive home sale was $1,670,000 in the Crown C. The median sale was $378,000 and the average price per square foot was $192. On the land side the median rice was $120,000 and the median price per acre was $19,000. Most notably, one 80 acre parcel sold for $1,100,000 after only 40 days on the market! The last three months have been quite good considering the time of year. There have been 25 transactions totaling $8,332,896. The average price per square foot was $$157 and the median price per acre was $17,167. Land sales have been slow for both the year to date and the last 3 months while home sales have been fairly strong. My prediction is this will continue and the last two months will be typically slow.

How is the sub-prime debacle affecting the Sonoita market

Posted at 11:25 AM, Sep. 8, 2007

The most frequently asked question today by locals and people contacting my office is: "How is your market being affected by the sub-prime lending crisis and the down-turn in the real estate market?" The answer, quite honestly, is it does not appear to be affected at all! Our year-to-date and past two month statistics certainly indicate a strong market. My own sales and income figures support this. So, here are some numbers: Residential sales for 8 months 2007 were 26 homes with a total value of $13,209,000. (This includes 3 sales over $1MM.) In 2006, we recorded 21 sales with a total value of $7,361,065 (none over $1MM). (All statistics are from the Tucson MLS.) Land sales in the same period were 56 sales valued at $9,221,400 in 2007 and 61 sales valued at $10,604,673. For the most recent 2 month period ending August 31st, residential sales were 10 closings valued at $6,081,000 (Includes 2 sales over $1MM) versus 7 closings valued at $2,349,000 in 2006. Vacant land sales in the same period consisted of 7 closings valued at $644,000 and 9 closings valued at $1,573,000 in 2006. So, our housing market seems to be quite healthy, even the average time on market is down for both homes and land. What does this mean to buyers and sellers in this market? Buyers who are waiting for "better deals" because of what's going on nationally are possibly missing out on the home or lot they want to buy. I see some price adjustments because of an over-optimistic seller, but the general trend will be upward. Sellers whose home or land has not sold, are probably priced too high above their competition in the marketplace. If they don't adjust their prices to the market, buyers will "question" why the property has been on the market so long and will avoid making an offer for fear of "offending" the seller. Thus, attractive properties are going to linger on the market when they actually should have sold.

1st Quarter 2007 summary of activity

Posted at 9:00 AM, Apr. 10, 2007

I think I would have to begin by saying that the market is more or less "normal". There seems to be more activity in the housing sector than in land, but the activity shifts back and forth during the year. And, even though the total sales were down versus the previous year, it is down less than the greater Tucson market. People are still looking for that idyllic community to raise their children or to retire. Here are the numbers: Total sales - $6,224,000 down 20% from $7,768,000 in 2006; Homes (6) valued at $2,969,000 versus (7) valued at $2,504,000 in 2006; The median home sale increased to $352,000 from $310,000 and days on market decreased to 87 from 102. --- Land sales (24) were just one less (25) than in 2006, but the total value was down to $3,255,000 from $5,264,000; The average price per acre is now up to $18,850 from $15,500 and the median lot price is $156,750 up from $125,000 the previous year. Finally, time on market remained virtually unchanged at 89 days versus 83 days in 2006. So, what does all this mean: People still want to live here, but not in great numbers and those that do are paying a bit more. If you are a REALTOR(R), life is good. You are selling property and meeting lots of nice new neighbors. If you are a potential buyer, please use a REALTOR(R) to represent you in your purchase. All of us with that designation, subscribe to the National Association of Realtors(R) code of ethics and many of us have one or more continuing eduction designations. That makes us professionals in our field. That should be important to you.