the Tucson real estate market is Not the Tucson Foothills real estate market

The Tucson Association of Realtors has released residential sales figures for the greater Tucson Metro area for May 07 vs May 08.
This includes sales for all residential types; single family, single family new construction, condos, town homes and manufactured homes.

Here's the key data from that report
for the Greater Tucson Metro Area;

Home Sales Volume: Decreased 34.93% from $395,081,716 in May 2007 to $257,072,764 in May 2008

Home Sales Units: Decreased 27.71% from 1,418 in May 2007 to 1,025 in May 2008

Average Sales Price: Decreased 9.98% from $278,619 in May 2007 to $250,803 in May 2008

Median Sales Price: Decreased 9.86% from $223,000 in May 2007 to $201,000 in May 2008

And here's the same data (which I've gathered) for the Tucson Foothills area;

Home Sales Volume: Decreased 27% from $61,569,288 in May 2007 to $44,563,391 in May 2008

Home Sales Units: Decreased 26% from 128 in May 2007 to 94 in
May 2008

Average Sales Price: Decreased 1.4% from $481,010 in May 2007 to $474,079 in May 2008

Median Sales Price : Increased 10% from $355,000 in May 2007 to
$391,000 in May 2008

For the month of May the decrease in the number of homes sold in the Foothills was slightly less than, though comparable to, the decrease in the overall Tucson metro. Yet, while average & median sale prices in the Tucson metro have declined substantially, prices in the Tucson Foothills have held up very well.

If you've seen this sales report from the Tucson Association of Realtors on TV or read about it in the newspapers you might've concluded that Tucson is Tucson and that values are declining in all areas at about the same rate. But that's not so.
Real estate is very local.

The Tucson Metro area is made of up of many smaller market areas, each with their own strengths, weaknesses and vulnerability to the real estate slump.

The Tucson Foothills is a small niche market within the Greater Tucson Metro - the number of homes sold in the Greater Tucson Metro (which includes the Foothills) was more than 10X greater than in the Tucson Foothills.

The Foothills is a market that has been virtually built-out, there's no room for expansion - east, west, north or south - and virtually all the available land within the Foothills has been built on. In other areas of Tucson there's plenty of land to develop and build, and consequently thousands of new homes have been built, leading to a large increase in the housing inventory in those areas.
 
And housing in the Foothills is also more expensive than in other areas of Tucson - the average sale price is about 89% higher than in the Greater Tucson Metro - because many people find it to be a very desirable place to live, and because there is no more land available to expand. It's supply and demand.
And because of the higher prices and a lack of new builder homes to invest in, there's been less speculative investing here than in other areas of Tucson, and therefore less fallout from investments gone bad.

Because of those basic differences, homes in the Tucson Foothills have been more resilient to the slump in real estate prices, and I believe they will continue to be. Not immune, just more resilient.

Please note; for the foothills, short term sales figures (less than 3 months) are not necessarily indicative of the true direction of the market. A longer view is always more telling and true.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

Comments

[rebecca]

looks like the sales volume & units though are on par with the rest of tucson (albeit less). all those stats together suggest that the foothills home sales have been kept afloat in this first part of 2008 in large part by a few higher-end homes, no? not everything in the foothills is $1m+ but those stats indicate that's what's selling. the rich are still ... rich! :-)

[John Schneider]

well, the stats are for May only, 07 vs 08, not Jan thru May, so it's a limited view of sales, but that's how TAR/MLS released them, so I did too. and re: the high-end end, there were more $1.0mil+ sales last May(11) than this May (8), and in general sales at the high end are down more than any other category,

[RP]

John, you wrote: "Yet while average & median sale prices in the Tucson metro have declined substantially, prices in the Tucson Foothills have held up very well."

You are treating one month's figures as support for your argument. If it really is of statistical significance that the Foothills median price increased 10% year-on-year with the May sample, then a corollary of that is that an objective professional appraiser should, on average, be appraising market values of Foothills houses at 10% higher than a year earlier. (So, buyers, you can push up those asking prices!!)

That seems out of step with reality. It seems more the case that, on a like-for-like basis, Foothills values have been sliding over the past year, as they have in the rest of Tucson.

[John Schneider]

RP,
I was responding to and disputing, the 'paint it all with the same brush' nature of home sales data as reported in the press, via the TAR/MLS. TAR released figures for May. In order to illustrate the fact that those figures are not applicable to the Foothills, I too had to report for that same May period. Too short though it may be. And yes one month is way to short a time period to make any conclusive judgements, as I've indicated on many occassions, most recently in: boring sales figures for million $+ homes in the Tucson Foothills, posted on june 12. Also, every month I report year to date sales figures compared with the same period in the previous year, as well as year to year sales data. It's all there, it's just not all in one post.
Perhaps I should have included a disclaimer in the post, as I did to the comment before yours.
And yes values have been sliding, see January - May home sales in the Tucson Foothills, posted on June 4.