TheTucsonFoothills

pick of the litter

Right now I have a couple of clients from out of town, who are ready, willing and able to buy a home in the Tucson Foothills.
Both of them are savvy and well-informed. They're educated, they read newspapers, watch TV, and peruse the internet. And both of them have read, heard, watched and been told, umpteen times, about the sad and declining state of the national real estate market, and how it's flush with homes for sale and sellers willing to do back flips to make a deal. And I've talked to them about the reality of the market here in the Foothills, and they've read the market reports on my web site and on this blog. And while it's a buyers market here also, sales are down 13% overall from last year in the Tucson Foothills - there are some key differences between this market and the rest of Tucson, or Phoenix.
Nevertheless, buyers arrive in the Foothills expecting to have the pick of a very big litter, and of getting a very good deal once they choose the home they would like to buy.
But unless they're very flexible about the home they would like to buy, it's not a very big litter.
This is a niche market with relatively few homes for sale, just 480 today, and very few of them cookie-cutter homes, and the price range for those 480 homes extends from $235,000 all the way up to about $8,000,000.
So those 480 homes cover a lot of ground in terms of price, location, size, style, amenities, etc. And once a buyer figures out the type of home they would like to buy; the price, location, size, style, amenities, etc, those 480 homes for sale get whittled down to maybe 7 or 8 that meet the general criteria, if you're lucky, and that's on paper, before going out to see them in person.
Once you go out and see them, there might be 1 or 2 that they like, and that are real contenders. In my experience with my clients, that's it, when all is said and done, 1 or 2 homes that qualify for serious consideration.
Buyers are pickier this year than in the past, but the best homes are selling and they're selling pretty quickly, while the less desirable, or overpriced, or both, are languishing on the market.
So if you want the pick of the litter, you've still got to be ready to pick quick, or wait for a new litter.

PS-In April I wrote essentially the same post, though it was even wordier, buyers market, Holy Cow! But apparently not too many people read it, because all the buyers that I meet still expect to choose from a very large litter of homes for sale, so I wrote it again.
Something's wrong, they must be reading the Wall Street Journal, instead of my blog.

La Paloma, a haven for second home owners

Come fall the snowbirds will begin arriving in the Tucson Foothills for the new season, which runs from late September through May.
Those who already own homes in the Foothills will settle back into
the rhythm of their winter lifestyle, while many of those who've been renting for a season or two will be looking to take the plunge and buy a second home in the Tucson Foothills.
La Paloma, with an ideal Foothills location, and proximity to the
La Paloma golf course and country club, combined with the beauty, privacy and security of living within its gates, is one of the top choices for the many second home owners who flock to the Tucson Foothills year after year.
And despite La Paloma's reputation as an expensive and exclusive enclave just for the wealthy, it offers a surprisingly wide choice of homes, priced from about $400,000 up to $3,000,000.

Divided by Sunrise Drive, the La Paloma residential community and golf course meander through the central foothills. On the north side of Sunrise Dr are the more moderately priced La Paloma homes, while on the south side home prices start at about $1,200,000. The south side of La Paloma is where the Westin La Paloma Resort and the La Paloma Country Club are located. The resort, with half a dozen restaurants and cafes including the justly famous Janos and J Bar is a popular spot with Foothills residents, while membership in the country club offers dining, health and fitness facilities, tennis, swimming, and of course golf. And just a 3 minute hop from La Paloma are the galleries, shops and restaurants at La Encantada, Casas Adobes Plaza, St Phillips Plaza and others.
In this piece I'm going to focus on the homes on the north side of
La Paloma, that's north of Sunrise Dr, that are priced from about $400,000 to $650,000, a very popular community and price range for Foothills second home owners. Looking at the map, you can see these homes clustered along Campo Abierto, Calle Cayo, Via del Verdemar, Misty Ridge Dr and other smaller streets.

This is Via Palomita, the main street through the north side of
La Paloma. Homes in this part of La Paloma are priced from about $400,000 to $1,200,000, with a great many in the $400,000 to $650,000 range.

The north side of La Paloma has a very intimate feel -
with it's narrow streets, lush desert vegetation and canopy of trees
 
In this area (above & below) homes are generally in the $400,000 to $650,000 price range. The homes on the right side back up to the golf course, and usually have good mountain views too.


Like this one, which I sold recently for about $500,000. 


And because it had nice mountain views,

and beautiful golf course views, it sold quickly.
While the homes with good views are more expensive, they are also
in the greatest demand.
Sitting out on the patio, whether reading the morning paper or enjoying drinks with friends, everyone wants to look out to a
beautiful view of the mountains and golf course.


Here's the view from another one that recently sold in
just a few days on the market.
 
Currently there are 10 homes for sale priced from $419,000 to $624,900 in this part of La Paloma. And there are 4 under contract and 12 have sold in the last 6 months.
So home sales in La Paloma are doing pretty well. 
Though I don't have any official figures, I'd say that 50% or more of the homes in La Paloma in the $400,000 to $650,000 price range, are second, or part time homes.
They're on smaller lots, 7000 sf or so, and the homes range in size
from 1400 to about 2200 sf. Though they don't usually have private pools, there are community pools in La Paloma for home owners use. And if you're a member of the La Paloma Country Club you have access to the pool, fitness facilities and other amenities of the club.
And for peace, privacy and security, La Paloma is a 24  hour
guard-gated community.
These are easy in, easy out, low maintenance homes that are perfect for the second home owner.
If you'd like to see the homes for sale in La Paloma, and everywhere else in the Tucson Foothills, visit my web site, thefoothillsToday.com

The Tucson Foothills, featured in the New York Times

In today's New York Times, both online and in print, there's a big article about the Tucson Foothills. For this article, which appears in a regular Friday column called HAVENS, I had the pleasure of working with the writer from the New York Times, Paul Smalera.
Paul was great, and so for me it was a lot of fun and very similiar to working with a home buyer from out of town, except that Paul was constantly taking notes about the things we saw and the things I said. As we drove around the Foothills I gave him an overview of the Foothills real estate market and showed him the different communities and the types of homes that were available, who was buying in those communities, prices and market trends and the changes that had occurred in recent years. Since the thrust of the article is about second homeowners, Paul asked if I had some second homeowner clients who would agree to be interviewed. Paul and Marianne Pellegrino, who were gracious enough to make themselves available and agree to be interviewed and recorded, are quoted frequently throughout the article. It's a really terrific piece and wonderful exposure for Tucson and the Tucson Foothills.

GREAT HOMES / GREAT HOMES | June 15, 2007
Havens| Tucson Foothills:  Cleared to Tee Off or Take Off
By PAUL SMALERA
Golf, high-end shops and a popular airpark draw second-home buyers to the foothills of North Tucson, Ariz.

Last Big Development

An article in today's Arizona Daily Star, Foothills -
Last Big Development? breaks the news that A.F. Sterling is developing Paloma Ridge, a subdivision of 54 new homes on 13 acres in the Tucson Foothills. And adjacent to the new homes, the Scotia Group is developing a 10 acre office project.
As reported, the first phase of new homes are scheduled to be finished by the end of this year and the entire project completed by late 2009.
The article quotes me as saying, "There were no large parcels (left) that I knew of. Fifty-four units is very significant. That's big news."

In and of itself, it is significant to add 54 new homes - or about 11% at current inventory levels - to the 465 single family homes for sale in the Tucson Foothills. 
But at a time when the news is filled with stories of builders pulling back, canceling projects and selling off their assets, the real significance is the commitment to and vote of confidence in Tucson Foothills real estate by a savvy and well respected Tucson builder.

102 in the shade

Summer, with high temperatures and slower sales for just about every Tucson business (unless your're in the AC or Pool business) has arrived. Walk into any shop, resturant or resort in the Tucson Foothills and you'll not only be welcomed as a special guest, you'll also find discounts and special summer deals; 2 for 1, wine half off, Summer Sale- deduct 30% from marked price, stay 2 nights and get the 3rd night free. If you don't mind the heat- it hovers around 100 this time of year- it's an awfully good time to shop, dine, and check into your favorite resort for great service at discounted prices.

And if you're in the market to buy a home in the Foothills, this is without a doubt, the best time to shop. Forget about Christmas/New Years, that lasts 3 weeks and just about every seller can hold their breath that long without breaking a sweat. 
Summer in the Tucson Foothills is 3 months, minimum.
It's nothing to hide from, everyplace has a slow season, and this is ours.
While The Hamptons, upstate New York and the Berkshires are booming now, come October, they'll be dead, as snow birds are flocking back to the Tucson Foothills for the new season.
Right now there are fewer buyers - and just like the shops, resorts and restaurants - home sellers are more motivated and understand that they've got to be more flexible and offer more incentives to make a sale. And of course Realtors usually have a little more time on their hands this time of year, so you're apt to get more attention there too. 
Besides, it's a dry heat.

1500 homes to breath life into Biosphere

Biosphere 2, the self-contained, self-sustaining world-in-a-bubble built to support ecological research has been sold for $50 million to CDO Ranching & Development along with the 1658 surrounding acres.
Biosphere 2 in Pinal County north or Tucson failed to generate the level of interest necessary to sustain it on it's own.
The plan is to build 1500 homes and a resort hotel on the property.
Read it HERE and HERE and HERE

looking for the bottom

Today I met a couple from Connecticut who are planning to move to Tucson. Their plan is to rent for a year, get the lay of the land and be ready to pounce when the market hits bottom.
We talked about this and that, the east side vs the foothills, different homes for sale and how the market's doing here in the Foothills, and elsewhere in Tucson. This was just a friendly chat, they're not clients of mine and they're not going to be for various reasons.

They wanted to know how prices were holding up, what was selling and what did I think was going to happen over the next 12 months.
I told them that there's been a steady stream of price reductions on homes in the Tucson Foothills during the last 10 months, typically about 30 price reductions per week, with quite a few homes having multiple price reductions over time. And while these price reductions at first were often just token reductions, $1,000 here $2000 there, during the last three or four months sellers have gotten realistic, and have been loping off sizeable chunks from the list prices. And another sign that sellers have really gotten the message about the market, is that the new listings have generally been much more reasonably priced and more in sync with current market conditions right out of the box. 
I also mentioned that recently, on average, homes in the Tucson Foothills have been selling for about 95% of list price, and that's a good sign, and could be taken as a signal that the market may be stabilizing. -When I got home I looked up the stats on that, and in the last 30 days, homes in the Tucson Foothills have sold for 96% of list price, that is, average sold to average list price and median sold to median list price-. I went on to say that I felt that we were now at a place where buyers and sellers were very close to being in sync regarding their expectations on prices. But that nevertheless, there were other forces and influences that were still keeping some buyers on the sidelines. Like these people, many buyers are trying to time the bottom of the market, negative real estate news, whether it's applicable to this market or not, is causing fear of buying, tighter lending practices are probably taking some toll here in the Foothills,
and the constant drumbeat of JUST REDUCED, MOTIVATED SELLER, MAKE AN OFFER, etc etc, combined with the sheer number of homes for sale in Tucson, about 8,800 sfr's(even though there are only 471 for sale in the Foothills) has given buyers pause.      
This fella said that was all well and good, but he was going to wait for the market to hit bottom. I asked how he'd know when the market hit bottom. He told me that when the homes for sale stopped having price reductions, we'd be at bottom.
When price the reductions stop, the market will have turned around already, and regardless of whether or not prices start rising, the whole psychology of the market will be different.
Deals will be harder to come by as more buyers actually enter into contracts, and sellers become emboldened by this positive turn of events.
There's a lot of pent-up demand out there, much of it tied up with buyers who are thinking about timing the bottom of the market.
When they decide that we're at bottom -whatever formula they use-and they start to buy, we're going to come bouncing off that bottom very quickly.

New homes, and more, in the Tucson Foothills

I've often said that 'the Tucson Foothills is an established area that is pretty much built out, so that what you see is what will be, with few exceptions'. Well, here comes one of those exceptions, and this is a pretty big one. The area on the north side of East Sunrise Drive, adjacent to La Paloma CC is being developed for commercial space  and single family homes. The area indicated below by the pin on the right side will be commercial space and the pin on the left indicates approximately where AF Sterling is building 54 homes on 13 acres of land. I'm told that the homes will all be two story and range in size from about 2700 sf to 3100 sf and be priced from about $500,000 and up. Since these homes will be on small lots, I'm guessing about 8000 sf, and being adjacent to La Paloma CC and close to shopping and restaurants, they'll be very attractive to second home buyers in the Tucson Foothills.
AF Sterling is a well respected local builder who has built extensively in La Paloma and in other areas of the Foothills and around Tucson.
Because of the prime location, the quality product that AF Sterling is known for, and what is a popular price range for the Foothills, the consensus is that these homes will sell out very quickly, perhaps with the initial demand outstripping the supply.
This is without a doubt one of the prettiest stretches of Sunrise Drive, and though this development will change the look of it, all of us who live in the area or pass through it regularly, are hoping that when all is done, it will remain one of the prettiest sections of Sunrise Drive.

Tucson Foothills Home Sales - January to May

Here's a look at how sales are doing in the Tucson Foothills for single family homes SOLD through the Tucson Association of Realtors MLS - for the period of
January - May of 2006 vs. January - May of 2007

Price Range	Jan-May 06 # Homes Sold	Jan-May 07 # Homes Sold	+/- %
$500 - $750K	98	91	-7
$750 - 1mil	48	34	-29
$1mil - $1.5mil	41	20	-51
$1.5 - $2.0mil	12	14	+16
$2.0mil & UP	14	5	-64
Total Homes SOLD	213	164	-23
*Avg List Price	$770,368	$727,500	-5
Avg SOLD Price	$740,901	$695,445	-6
Median List Price	$599,000	$567,000	-5
Median SOLD Price	$580,000	$545,000	-6
$$ Value of Homes SOLD	$204,800,690	$140,672,895	-28

*The Avg. & Median List and Sold prices, and the Total $$ Value figures, represent the homes SOLD in ALL price ranges in the Tucson Foothills - not just those from $500K & UP.

Overall, the pace of home sales in the Tucson Foothills is about the same as it has been for the last few months - with sales in some price ranges ($1mil +) improving slightly while others have dipped a bit.
The real change that we're just now beginning to see - a narrowing of the gap between this year and last in Average & Median prices - is the result of a change that took place last year.
The gap between this year and last in Average & Median List and Sold prices has narrowed in the last month, from about -10% to about
-5%. And it's not that the Average & Median prices are suddenly starting to rise this year. It's that they first started to decline last year at this time, when the slowdown first took hold in the Tucson Foothills. Up 'til now, when comparing sales from last year to this year, I've often concluded that though they're down this year they're down from what was a banner sales period in 2006.
No more, that ended in April of 06.
From now on we're into an apples to apples comparison.
See Home Sales in the Tucson Foothills - January thru April