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.

Is the Sonoita, Elgin Patagonia Real Estate Market Different?

Posted at 11:00 AM, Oct. 28, 2006

Directly or indirectly we are offten asked the above question. The answer is really "yes". The Mountain Empire as this is often called, is still predominently ranch land. It is perceived as being rural, but it is not remote. Sierra Vista, Nogales and Tucson are all within an easy 35 to 60 minute drive. This fact, and because there is a top rated elementary school in Elgin, is bringing younger families into the communities. But how does this relate to the real estate market. Purchasing property here is definitely affected by the desire for buyers to spend or invest. When there is a nationwide feeling, as there is now, that real estate prices are high, buyers tend to retreat from this market as well as any other market. However, our prices do not respond accordingly, particularly vacant land. At the present time there isn't an oversupply of either land or homes in this market. Thus supply and demand forces are fairly well in balance. This is not necessarily good news for potential buyers as prices are not dropping. Conversely, prices are either stable or increasing, with only minor exceptions. The exceptions are those properties which entered the marketplace much too high and now the owners have come to the realization that the only way to attract any buyers in a slow market is to price realistically. Presently, our market seems to be "normal". New listings, predominantly land, appear on the MLS in ones and twos almost daily. Contracts seem to be written several times a week and walk-in traffic is not bad for the non-tourist time of the year. I would imagine that the agents who have been here for a number of years, will end up participating in their usual number of transactions and with their usual income when 2006 concludes. Stay tuned!

Has the greater Sonoita market slowed?

Posted at 3:22 PM, Jun. 12, 2006

I have recently analyzed the local market through June 9th. There is no question that there are fewer customer contacts than a year ago, but how much different is this activity than what might be considered "normal"?

Looking back to 2003, it appears from the number of contracts that have been written that the market is still pretty good! In addition, time on the market is much shorter. And, on average, properties are selling very close to the asking price.

However, looking at this year versus last, tells a slightly different story: Total sales for land and homes dropped to 59 from 79. The total value of sales has fallen to $12,848,000 from $14,847,000 a year ago.
Putting it all together, I conclude that the market has slowed, but it is still better than in 2003. And, maybe it is like it has been in the past. Those were not bad markets for either buyers or sellers.

Sonoita-Elgin-Patagonia is still a good value. If you are looking for a second home or retirement home, don't pass up this beautiful high grassland. However, be prepared NOT to find exactly what you are looking for as our inventory is low in all catagories. You may have to be either "creative" or patient, if you decide this is to be your destination.

Sonoita, AZ real estate - Has the bubble burst?

Posted at 8:53 AM, Apr. 27, 2006

Is the Sonoita-Elgin-Patagonia real estate market immune to what is happening nationally? Is our market running in sync or marching to its own tune? Has our bubble burst?

Historically this market tends to lag what is happening on a national basis and even what is happening in Tucson. The reason is that our buyer profile is slightly different in that the majority of sales do not involve people relocating because of a job change or "moving up" in town. Our buyers are buying a second (third) home or retiring. Even though we have people moving into the area as a result of changing jobs, desiring to raise their children in a rural atmosphere or changing homes in our area, the driving force in terms of price are those folks who are part of the baby boomer generation. So, from this standpoint we are tracking the market nation wide that is dependant upon the spending pattern of the baby boomer. I believe this market is pausing, waiting to see if the bubble has burst so they can take advantage of possibly lower prices.

But our market is not in total synch with the nation, or even Tucson. We generally lag what is happening in those markets some of which has to do with the "tourist" component pool of potential buyers. I also want to mention that our sellers are somewhat different . They are not selling as a result of a job change or desire to move to another area for retirement. We have the best climate and a great lifestyle. Mostly people are selling due to an unexpected event in their life, perhaps medically related. This impacts the available homes we have on the market meaning that we do not always have enough choices for any given buyer. The combination of housing stock and the discretionary capability of our buyer often cuases our market to be out of synch with the nation and with Tucson.

In conclusion, has our bubble burst? This market has participated in an increase in home and land values that is greater than normal over the past 3 years. The past 6 months or so have seen a more rapid escalation in all prices du to sellers observing what has been happening across the country. For example, five acre lots were commonly available for $7,500 or so an acre a year or so ago. Today, we have very few parcels of that size and they are selling for $18,000 and more an acre depending on location, etc.! If history is our guide, we will probably not see much in terms of price reductions, but rather an increase in time on the market. From the buyer's standpoint, the bubble will not have burst and there will be few, if any, "bargains". From the seller's point of view, it may have, but then again, most sellers in this market are very patient. They are generally not motivated to move.