Market Trends

June 28, 2008

short sales in the Tucson Foothills

This morning I did a thorough search in the MLS for short sales, REO's, bank owned, auction or foreclosure properties that are For Sale in the Tucson Foothills. I found 14. (**single family homes only**)

Most of them are listed as short sales, one REO, and none were listed as going to auction.

Under those same distressed sale categories I found eleven homes that are under contract, and six that have sold in the last six months.

Including those for sale, under contract and sold, the prices range from $257,500 to $1,195,000. 

Then I checked out Realty Trac, and they show more distress sale properties in the Foothills that don't show up in the MLS.

Using their data I entered the addresses in the MLS, and found that in some cases there was a home for sale at that address, and in some there wasn't. But of those that I checked that are for sale in the MLS, there was no indication in any of the listing data that the property was a bank owned, auction or short sale.

And that's odd. Because it's usually not something the bank wants to keep secret. They want to sell the house, and people are attracted to short sales because there may be an opportunity for a bargain.
But I suppose it's possible that with some of these properties, the short sale or foreclosure action is in the works and on the horizon. 

Amongst the 14 properties that are for sale is one that is a new builder spec home, and a nice one too.

Contact me for more info on any of these homes.

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

June 26, 2008

the Tucson Foothills is a local housing market

I came across an article from Bankrate.com that offers some good common-sense advice about how local real estate markets often perform very differently from what's happening nationally.
Just so happens that the article also fits in nice 'n neatly with my post from yesterday, we've had our ups and downs in the Tucson Foothills, but
 
From Bankrate.com
When will YOUR housing market recover?
' Pundits love to make predictions as to when home prices will stabilize in U.S. housing markets. But even well-respected forecasters and analysts may disagree, and even if a forecast proves true nationally, your local market may behave in a wildly different way. This disconnect between broad-stroke forecasts and small-scale local markets presents quite a puzzle for homebuyers and home sellers, who need to make major financial decisions on the basis of facts, not fiction.'

' ...the national housing market is more than large enough to encompass a wide variety of trends in different places and on different timelines '

Read it here, When will YOUR housing market recover?

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

June 24, 2008

the short sale of the week sells in 6 days

Last week I posted a piece called short sale of the week, in the Tucson Foothills
It featured a home that had been on the market for about 10 months, and during that time priced between $1.5m and $1.2m, and it didn't sell. Then last week it was re-listed as a short sale, for the
bargain-basement price of $850,000, or $186.53/sq ft.
A real deal.



With short sales it usually takes a long time for the lender to make up their mind about an offer, and then have a meeting to get the committee to approve it, and process the paperwork, and on and on.
This one went in six days, listing to accepted offer, and I'll bet there was a bidding war. Someone did very well. $186.53/sq ft is a steal for that house.

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

May 08, 2008

recent home sales trends in the Tucson Foothills

Because of the constant barrage of real estate news coming at us from all quarters of the US, it's easy to lose sight of what's happening in our own backyards, which is what really matters if you're in the market to buy or sell a home in the Tucson Foothills.
January through June is traditionally our busiest season for home sales in the Tucson Foothills, and despite all the bad news, this year is no exception, as sales in the Foothills have been increasing nicely month over month since January.

foothills_home_sales

For the latest 30 day period 63 homes have sold in the Tucson Foothills. And given the current inventory of 583 homes for sale, that puts us at about 9 months of inventory (583/63 = 9.25)
And that's an improvement from last month (12 months inventory) and the month before (11.5 months inventory).

So what happens now.
Sales should continue to do well through May and start to taper off as June approaches. There will also be fewer New listings, and some home sellers will pull their homes off the market until the fall.
This season was slow in getting started, as buyers held off making a commitment while they waited to see what would happen.
What happened is that prices in the Foothills have only dropped about 2% so far this year vs last year, not the 7, 10 or 12% price drops that we hear about in other cities.

avg_&_median_sold_prices

And now, late in the season, instead of dwindling, home buyers are continuing to show up in strong numbers. (currently there are 84 homes under contract in the Tucson Foothills) Maybe the murmurs about an improved outlook for real estate are bringing buyers back to the market. Maybe the consensus is that prices in the Foothills have been very resilient and aren't going to drop much more, if at all, or maybe people are just tired of waiting and they want to buy a home now, because there are some good deals out there, and lots to choose from.

One thing's for sure, no maybe's about it, the increased availability and lower cost of jumbo loans, has gone a long long way toward easing the path for home buyers in the Tucson Foothills. A few days ago Long mortgage was offering Conventional Jumbo 30 year fixed rate loans at 6.875% w/.5 pt, OR 6.625% w/1pt.(update: as of 5/9 jumbo's @ 6.625% w/.5 pt.)  That's roughly equivalent to where jumbo rates were before the credit crunch.

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

May 05, 2008

teardowns in the Tucson Foothills

Well located build-able lots are an endangered species that are fast becoming a nearly extinct species in the Tucson Foothills.
There are very few good lots available, and those that are, are very expensive.

Some builders/investors have responded to this situation by carving out lots in places where no one would have considered building a home a few years ago. What I call in-fill lots.

Others have gone the teardown route, finding well-located older homes on good lots and starting over. This is a very popular way to go in Skyline country club, which is a guard-gated golf course community in the Tucson Foothills, where many 60's and 70's vintage homes are located on prime lots with great city and mountain views.

The one below was built in 1967, and sold for $480,000 in 2004



And after a massive facelift it's now listed for $1,685,000


Here's the original 60's kitchen

and a couple hundred thousand later, bon appetit

from Ozzie and Harriet in the living room


to surround sound and knock-out views

 

Here's another one, this 3160 sf house was built in 1965,
and sold for $455,000 in 2003


and was reborn as a 5000 sf luxury manse which sold for
$1,875,000 in 2005. It sits on the golf course in Skyline
and has great mountain views too

and a new kitchen

and a new everything


Despite a lack of land, this is how some of the new construction is getting done in the Tucson Foothills, and doing it on a great lot in a place like Skyline Country Club is the way to go, in my opinion.
It's more expensive than building on in-fill lots, but if you're going to build or buy an expensive home, location, location, is the critical criteria. It can't be overlooked, because it can't be changed, while just about everything else about a house can be.

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

April 21, 2008

Joesler and Murphey, they started it all, in the Tucson Foothills

Yesterday I went to a party at one of the most beautiful Joesler homes I've ever seen. I walked around speechless for the first 20 minutes. And when I finally came-to, I talked with quite a few people who are into Joesler's, love the old foothills, and are concerned about the preservation of this area.
It made me think of this piece, which I had posted last year, and it inspired me to re-edit it, to try and make it better, and more focused - so I could post it again. I'm not sure I accomplished that, but I love looking at pictures of great Joesler's and they remain untouched from the last version. 
   
John Murphey, the founder and developer of the Catalina Foothills Estates, in partnership with the architect Josias Joesler, were visionaries in the development of the Tucson Foothills, which until they came along, was a remote and undeveloped area of Tucson.

Their vision was to create a lifestyle that would be attractive to wealthy mid-western and eastern families seeking a winter refuge in a desert environment. Tucson's first second home owners.
And the homes designed by Joesler,while meant to evoke a romantic association with the desert, were often large homes on sprawling hilly lots that were surrounded by the beauty and privacy of the natural desert.

Many of those Joesler's survive to this day, and quite a few have been carefully maintained and renovated to provide modern comforts and conveniences, while maintaining the essence and character of Joesler & Murphey's vision. When they're done right, they're incredibly beautiful.
However many (most really) of the original sprawling hilly lots, which ran from ten to fifteen acres or more, have by now been subdivided and whittled down to nearly the size of your typical new Mc Mansion lot, to make way for more homes. There's virtually no other build-able land available, particularly in the Old Foothills, and as R. Brooks Jeffery said in A Guide to Tucson Architecture - "Today, much of the original rural character of the Catalina Foothills has been lost - an ironic consequence of its success". That book was published in 2002, and since then, builders have become even more creative and relentless about squeezing homes onto lots that until recently would not have even been considered. And the effects of that in-fill development have not been positively received by most people in this area, myself included.

The original Catalina Foothills Estates is ideally located in the center of what we now call 'the old Foothills'. It's bordered by Skyline Dr on the north, River Rd on the south, and extends about a third of a mile east and west of Campbell Ave.
Here we're looking north on Campbell Ave from River Rd, which cuts right thru the original Catalina Foothills Estates.

Up here on the left is Calle La Vela -
it's the best street in the Old Foothills for Joesler estates.
I count 9 Joesler's within about a 1/2 mile of this intersection, including the Lee Marvin residence on 12.2 acres.
In the following pictures, you'll see that these homes are very privately located, up on top of a hill or tucked back and away from the street, behind gates and desert foliage.

Like this one

there's a really great Joesler on top of this hill
and another is tucked back there behind those cypress trees.
It was on about 4.5 acres, but not anymore. Last year it was whittled down to about 1 acre, with three new homes built on
the lots that were carved off.

Turning north on Calle Ladero, there's a Joesler behind this entry gate.
Here's a closer look at some of the homes behind those gates and on top of those hills -
these pictures are from 4 different Joesler homes

Clay Tile roofs, thick adobe walls, arches, lots of private outdoor areas for recreation and relaxation, all Joesler signatures

Joesler used deep overhanging roofs on the south side to shield the house from the sun

This is the front entrance to this house, and though you can't see it, this large front patio is enclosed by an adobe wall.  The big windows are in the living and dining rooms, and look north to the Catalina's

 

Tall Timber beamed ceilings, prominent fireplaces, scored concrete floors, and large windows in the living areas for mountain and city views are all indicative of Joesler's work


Above, is an Arizona Room- a porch really, another signature.
AZ rooms were not heated or cooled and often had screened windows for an indoor/outdoor experience, notice the fireplace
behind the plant. This one has been converted to year round living space, it's heated and cooled, and closed off from the outdoors.
I don't think you can tell from these pictures, but all the interior walls are built of thick adobe- these homes are fortresses


This is a bedroom- with a fireplace, wood beamed cathedral ceiling, and stained concrete floors
A kitchen patio with brick flooring,

While many of these homes have been maintained, or carefully updated and renovated over the years, not all of them have been done as carefully and as well as the homes you see here.
I've seen some disasters that are all but unrecognizable as Joesler's, which is very sad if you're a fan of his work.
And then occasionally I'll come across a more or less vintage Joesler that hasn't been touched in decades, and with those, while the
good bones adage is generally true, you also get to see the quirks of a Joesler.
He built these homes as winter retreats for wealthy families, and it was typical for them to have a cook on staff to prepare meals - these people didn't hang out and entertain friends in the kitchen as we do today. Or they would dine out regularly, and so the kitchens in many of these Joesler's are tiny, really tiny - particularly in relation to the size of the home.
Ok, that's understandable, but the closets are also very tiny.
And my vision of that era is of steamer trunks full of clothes with a variety of outfits for every occasion, from lawn tennis to an evening at the symphony. Where'd they put it all.

Nevertheless, Joesler's legacy in Tucson remains without parallel.
70+ years later and his homes remain the prized possessions of their proud owners and a source of inspiration for his followers and imitation by those trying to capitalize on his legacy.
 
I frequently see homes listed for sale that are described as;
'Joesler-esque', 'Joesler inspired', 'a hint of Joesler' or
the clumsy 'Joesler-like-feel'.
And  as this new residential development proclaims-
A Joesler Inspired Neighborhood.  Yeah sure.

For last I've saved the mother of all Joesler's,
Eleven Arches, a.ka. Grace Mansion.
In 1937 Louise N. Grace, heiress to the The Grace Shipping Lines fortune, decided to build a 15,000 sq. ft. house in Tucson, just for herself. It was to be designed by Josias Joesler and built by John Murphey. The story goes, that in order to assure her desire for privacy, John Murphey had her stand on the hilltop where her home was to be built while two workmen walked south carrying poles with pieces of white sheet attached. When she could no longer see the white sheets in the desert, and therefore her privacy assured, that would be the boundary for her land. As a result, Eleven Arches was built on 200 acres of prime Foothills land.
(the information about standing on the hilltop, the workmen and the sheets, comes from an article by Ken Scoville, Privacy in the Catalina Foothills Estates)
This is a picture taken in 2004 from the house, that may approximate what Ms. Grace saw back then - minus all the city lights


The front view of Eleven Arches

Above is the living room of Eleven Arches
In addition to being very wealthy, Ms. Grace was very well connected socially, and Eleven Arches was a popular gathering place for soirees attended by politicians, movie stars, ambassadors and the like.
After Louise Grace died, Eleven Arches changed hands again and again over the years, and with each new owner some of the acreage was sold off and the house slipped further and further into a state of disrepair. Until 1976, when it was purchased for $275,000 along with the approximately 50 acres of remaining land. At that time it was extensively renovated, to the tune of $1,000,000.
And then it sold again in 2000, this time for $2,800,000, with only 19 acres remaining. Someone made a fat profit on that deal.
But this new owner didn't stay very long, because in early 2004 it was again listed for sale, now for $3,490,000, and with just 5 acres of land remaining.
After languishing on the market for more than a year, the property was turned over to an auction house who ended up selling it 2 days before the auction for $2,200,000, now with just 3 acres of land remaining.
If you drive by Eleven arches today, it's hemmed in on all sides by new multi-million $$ homes built on land that used to belong to Eleven Arches, as it cowers in shame at the top of the hill.

**Much of what I've learned about the history of John Murphey, Josias Joesler and the development of the Catalina Foothills, has come from the writings of R. Brooks Jeffery, an invaluable source.
R. Brooks Jeffery is Associate Dean of the College of Architecture and Landscape Architecture, University of Arizona and Coordinator of its multi-disciplinary graduate program in Preservation Studies.

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

April 20, 2008

the villas at Sabino Canyon

As I mentioned the other day in, the condo sizzle fizzles 40 condo units are to be auctioned at The Villas at Sabino Canyon on May 10.
There are two 2/bedroom and one 3/bedroom floor plan, ranging in size from 1004 to 1209 sf, and three Starting Bid prices of, $89,000, $99,000 and $109,000, depending on size, location and views.

The brochure says to go to http://www.auctiontoday.com/ for additional photos and information, but as yet, there's no information there on the The Villas auction.
Until it becomes available on the web site you'll have to stop by
The Villas to get all the details, they do have a brochure, or call the auction office at, 1-888-582-7332

The Villas at Sabino Canyon - 7255 E Snyder Rd, northeast corner of Snyder & Kolb

As usual with these auctions, there's lots of fine print about the steps and procedures, terms and conditions, your rights and responsibilities, due diligence, bidding requirements, etc. Read it all carefully.

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

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April 18, 2008

the condo sizzle fizzles

I don't have all the details yet, but word is that 40 condo units at The Villas at Sabino Canyon here in the Tucson Foothills are going to auction on May 10.

I don't know if these are all the same units, but when they were listed for sale in the MLS recently, they ranged from 1004 to 1209 sf,
2 to 3 bedrooms and 2 baths, and were listed from $169,900 to $220,000.
And according to the MLS, 36 others have sold in there over the last year or so, from $155,000 to $255,000. These owners are not going to be happy.  Unconfirmed information tells me that bidding will start at $89,000 or $99,000 depending on the unit, and there is an undisclosed reserve price that must be met.

But you could see this coming from a long way off.
The condo craze got started here in 2005 with the zippity-quick 6 hour sale of all the units at Tierra Catalina, the first new condo development to open in some years in the Foothills.

Soon word got out that there was fast money to be made in Tucson, and out of town developers quickly bought up all the apartment complexes in the Tucson Foothills, and waved their wands and turned them into condos. But they all did it at about the same time, and in the blink of an eye we went from 40 or 50 condos for sale at any one time, to more than 1000 and growing.  OOPS!

The Villas at Sabino Canyon were one of the last to open their doors, and by that time, the market for condos in the Tucson Foothills was suffering from a severely bloated supply amidst trickling demand.

I'll post the auction details when I get them tomorrow.

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

March 14, 2008

home sales trends in the Tucson Foothills

Online valuation sites have gotten a lot of interest from people curious about real estate values, trends and data. 
So this morning I started playing around with cyberhomes.com an online valuation site that I hadn't visited before.
Like other online valuation sites, I found the valuations for individual homes to be hit or miss, often missing by a pretty wide margin.
But when I looked at the broad trend reports available on cyberhomes I found them to be indicative of the market here in the Tucson Foothills. The chart below shows the moving average sale price for homes in the Tucson Foothills, area code 85718, for the past five years.

Here's a tighter version of that same chart reflecting average sale prices in the Tucson Foothills for the 2nd quarter of 2006 thru the present. That big dip you see in the 4th quarter of 07, that came on the heels of the crash in the mortgage markets in August of that year. Jumbo loans, which are a popular financing option in the
Foothills, became difficult to get and very expensive, so higher-end sales collapsed, for a while.


They call the chart below a buy/sell indicator.
This one illustrates the shifting trend
(call it a downward spiral) from a sellers to a buyers market over the past two years in the Tucson Foothills. 
If you're a buyer or a seller, this is a trend you can't afford to ignore.

Because broad trend reports like these indicate the direction of a market over an extended period of time, as well as highs and lows within that period, for my money they're a more reliable gauge of activity, values, or whatever it is they're measuring, than making decisions based on what happened during a 1, 2 or even 3 month period.

see TheFoothillsToday.com
to search for and learn more about Tucson Foothills Homes

March 06, 2008

range priced homes in the Tucson Foothills

If you're looking to buy a home in the Tucson Foothills these days,
you've probably run across homes for sale that are Range Priced.

When you see a listing that says,
'SELLER WILL ACCEPT OR COUNTER OFFERS BETWEEN
$750,000 - $799,000'

OR
'Seller will entertain offers between $599,000.00 and $629,000.00'
or some variation of that language, you're looking at a house that is range priced.
Range pricing has become more popular lately, because it is meant
to limit the offers on a house to a specific price range that the seller is willing to accept. And to discourage low-ball offers, because it clearly implies that the seller will not respond to offers that are less than the range.  

So if you see one of these range priced homes, and you like it, and you want to make an offer, but you're only willing to make an offer that is less than the range, you may feel uncomfortable doing that, not wanting to have your offer rejected, and therefore you may decide not to make the offer, assuming that the seller will reject it. 
Don't assume that, even though it clearly states -
  'Seller will entertain offers between $599,000.00 and $629,000.00'
This one, sold for $550,000, $49,000 under the bottom of the range.

I looked at homes that have sold in the Tucson Foothills in the last few months and pulled the ones that were range priced.

Here's what I found,
-Seller will accept or counter offers $319,900-$332,000
                                        SOLD $310,000

-Offers entertained 480K-505K   SOLD $480K
                   
-SELLERS WILL ACCEPT OR COUNTER OFFERS BETWEEN
     $499,900 & $549,900    SOLD $500,000

-SELLER WILL ACCEPT OR COUNTER OFFERS BETWEEN
      $549000 -575000.    SOLD $530,000

-OFFERS ENTERTAINED $550-575K  SOLD $550K

-Seller will entertain offers between $599,000.00 and $629,000.00
                                                     SOLD $550,000

-Range Price. Seller to entertain offers from $745K-$765K
                                                     SOLD $680,000

-Range Pricing $695,900-$720,000
              
SOLD $680,000

-SELLER WILL ACCEPT OR COUNTER OFFERS BETWEEN
$750,000 - $799,000    SOLD $725,000

A few years ago, at the height of the real estate boom,
I represented the buyer of a house here in the Tucson Foothills that was range priced from $799,000 to $849,000.
We ended up getting it without too much trouble, for $750,000.
Since then I've always taken range pricing with a big grain of salt. You should too.

see TheFoothillsToday.com
to search for and learn more about Tucson Foothills Homes

September 28, 2007

racing for the bottom

The pace and the dollar amount of price reductions in the Tucson Foothills is increasing.
In the last two weeks 79 homes listed for sale have had price reductions. With just 480 homes listed for sale, that's 16+% of the total inventory, reduced in just the last two weeks.
We'd been humming along here pretty well, considering, until the credit crisis which hit in mid August, came down like a hammer on home sales in the Tucson Foothills. With an average sale price hovering around $700,000, the reduced availability and higher cost of jumbo loans has hit this market particularly hard. Suddenly, home owners, Realtors®, and just about everyone else (there are a few delusional die-hard's still playing kissy-face) involved in real estate seems to understand that this is the real thing, it's fish or cut bait time. And in the end, that's a good thing.
The sooner everyone faces the situation for what it is, rather than what we'd like it to be, the sooner we'll get back to a normal market. On the other hand, do any of us remember what a normal market is.
Click HERE to see all 79 homes that have had price reductions in the last two weeks.  **Unfortunately (and there's nothing I can do about this) the MLS does not show the actual amount of the price reduction in reports that are available to the public, only the final reduced price. 
Contact me with questions about any homes that are of interest and I will give you the details of the price reductions, DOM, etc, etc.

September 26, 2007

drastic measures for difficult times

Looking at the activity in the Tucson Association of Realtors MLS this morning, a few things caught my eye.
The first one was a home in La Paloma, a brand new listing for $589,900. When I looked a little deeper to see when this home had last sold, and for how much, there was the surprise. It last sold in January of 2006 for $610,000. Now 21 months later, it was being listed for sale for $589,900, or $20,100 less than it sold for back then. Add in commissions and closing costs and these people are going to take a big loss on the purchase and sale of this home. That had to be a tough call for them to make.
It's not that unusual to see homes that have languished on the market for six or eight months or more, and with numerous price reductions during that time, are now listed for less than the last sale amount. That happens.  But to list it for less than you paid right out of the box is still very unusual in this market.   
The other new listing that popped up was a brand new home, recently completed, and never listed before, also in the Tucson Foothills, listed for $1,750,000. This one offered the buyers agent a 6% commission. 6%, that's a lot, particularly on such an expensive home. Once in a while you'll a 3.5% commission, 4% once in a great great while. I've never seen 6%, except with big home builders, but this is not a big builder, this is a private owner.
You may consider that to be an obscene amount of money for an agent to make on one transaction, but that's what the sellers think will work, and they're willing to do that to get their home sold in today's market. One thing's for sure, they're going to get a lot of showings.
The third one that caught my eye was a home that had it's price reduced by $109,100 in one swing of the ax-from $809,000 to $699,900. That's a big reduction, about 13.5%.
These are just a few examples of the more drastic pricing and sales strategies that have been occurring with more frequency lately in the Tucson Foothills. These owners have apparently taken a hard look at the market and decided to do what needs to be done to sell their homes. And hopefully it's a sign that more people are getting it, and realizing that the market is what it is, and that if they want to sell, they must approach it very aggressively in order to succeed.

August 30, 2007

overpriced by any measure

It has become painfully clear that the real estate market is going through one of the worst times in it's history. And the jury's still out on where it will end.
Sales have been slow, dreadfully slow in some places - and home sales are slowing even more with the added burden of the mortgage crisis. Inventories of homes are at an all time high - foreclosures are higher than ever and growing, and choking off many of the lenders that made those loans - sadly, people are losing their homes because their mortgage payments are rising and their homes value is decreasing - new home builders are on the rocks - and the stock market and the economy are faltering as a result of the state of the real estate and mortgage markets.
For the most part, only the most desirable, well priced and well presented homes are selling. While just about everything else is starting to smell like day old fish.
Yet in the face of this overwhelming evidence, some homeowners persist in trying to sell their homes at outlandish fairy-tale prices. Still, now, today. It's mind boggling.
And I'm not talking about the homes that are just run-of-the-mill over priced, I'm talking about the homes that are blatantly overpriced, at 20%, 30% and more over current market value. Homes that are priced so out of whack with reality, that they really don't stand a chance of selling. While these grossly overpriced listings are the exception in the Tucson Foothills these days - because most people have gotten it by now - about four or five of them turn up and catch my eye in the MLS each week. You can't help noticing them with all those $$$$ signs. They pop up as shiny and hopeful new listings, that are destined to fail, or more often as withdrawn or expired old listings, which have grown older, more tired and irrelevant as time goes on.
Of course homeowners can list their home for whatever price they like, however outlandish, but if they would really like to sell, or need to sell, they're in for a big disappointment and maybe a big financial setback. The market is in turmoil, it ain't over.
And though it's not surprising, it is discouraging that these homeowners have been able to find a Realtor® (or maybe the Realtor® found them) who will smile and go along with this fantasy.
Of course it's possible that the Realtor® took the listing, assuming that down the road the homeowner would see the light and reduce the price to where it should be. But it's also possible that it's the Realtor®, and not the homeowner, who suggests and encourages this outlandish pricing - because they want to get the listing (why I don't know), or because they haven't the faintest idea of what the market value is, and they make an honest mistake in pricing the home - In which case they shouldn't be doing what they're doing. Not when you're off the target by that much.
Admittedly, pricing a home in the Tucson Foothills is not as simple as 1-2-3. With few exceptions, this is not a community of cookie-cutter homes, so you can't just look at what might appear to be comps in order to arrive at a fair market price. Usually there are a lot of variables within those comps, and you have to know the market to properly evaluate them. And then you have to take your head out of the sand and give serious consideration to what's happening in the world out there these days, if you truly want to have a shot at selling that home.

August 23, 2007

cash is king

Cash buyers have always had an edge in real estate transactions. They're just more attractive to home sellers and their agents because a cash offer just seems more solid and serious and real. It's cash, with no strings attached. A cash offer eliminates the unknowns and snafus of the loan contingency variable, and the time it takes to process that loan, and get it approved - or not approved - through underwriting and then funded.
That's about 25 -30 days of waiting and wondering. Cash buyers can close fast, I've seen it done in 7 days. That's very tempting to a home seller.
And now with the global credit crunch making loans harder to get, more expensive and less available - added to an already slower home market - cash buyers are sitting in a very pretty place.
In the Tucson Foothills, with the average sale price of a single family home at about $700K, the availability and affordability of jumbo loans, which have been battered lately, are of particular concern.
The upside, is that this is a real window of opportunity for cash buyers in the Tucson Foothills.

August 22, 2007

there are buyers out there, even now

Two weeks ago, in more on pick of the litter, I wrote about a home that I had just listed for sale and how we got two very good offers on it, after just two days on the market. And this was no cheapie home either, it was listed at $845,000. (The point of that piece was that the good homes, the pick of the litter homes, are still selling very well in the Tucson Foothills. A point that I've made, OK, harped on, again and again for some time now) Anyway, after a few days in escrow, and as the buyers were doing their inspections, the mortgage mess suddenly billowed out from it's corner in the subprime arena, to engulf the entire mortgage industry and credit markets worldwide.  Spooked, I suspect, those buyers walked at the 11th hour, after 12 days in escrow.
At the time that we went into escrow there were other buyers interested in that home, but they'd hesitated a couple a beats too long. So I put the house back on the market the next day, Saturday, August 18th hoping that at least one of them would come around.
But with suddenly tighter, more expensive lending, particularly for jumbo loans, and fewer options as lenders were closing their doors,
I was feeling less optimistic about getting another good offer anytime soon. I figured this mortgage thing was going to have to shake itself out a bit before buyers started showing their faces again.
Wrong. Right out of the box we had one showing after another.
And yesterday, again after just two days on the market, we got another very good offer and went into escrow, again, while another agent was trying to schedule a third showing, for her apparently very interested clients.
So at the risk of beating a dead horse- there are buyers out there who want to buy a home in the Tucson Foothills, but these days, they all want the pick of the litter. 

August 07, 2007

the rising tide in the Tucson Foothills

Since moving to the Tucson Foothills in 2000 I've watched the Foothills morph into an area of more and more expensive homes. 
As in many cities, high rates of home appreciation have contributed to this, but also, in the Foothills virtually all the new construction in the past seven + years has been at the upper-end of the market - big expensive homes. No one is building $400,000 homes in the Foothills. By mid 2003, when the country and the stock market began to recover from the effects of 9/11, luxury home building in the Foothills really started to take off.
 
And while a big chunk of that luxury home building took place in Pima Canyon and a few other luxury subdivisions in the Foothills, soon every nook and cranny of the Foothills was fair game.
Large multi-acre estates from the 40's and 50's were being split into 1 acre lots to make room for new luxury homes. And older homes on lots scattered throughout the Foothills were razed, and in their place $1,000,000+ McMansions were built. And more recently, builders started putting up big expensive spec homes on less desirable lots. Lots that are next to roads, or homes squeezed onto small hillside lots, where the house overwhelms the setting.
Because of this rush of luxury development I started wondering how that has effected the rates of appreciation in both luxury and more moderately priced communities in the Tucson Foothills.
Overall, single family homes in the Tucson Foothills have appreciated +82% between 2000 and 2007 - based on average sale price-$371,937 in 2000 - $677,050 in 2007 = +82%.
(and that's down 3.7% from 2006)
Looking at the average sale price and % of appreciation in five  upscale communities and five mid-priced communities, here's what I found.
             
      Average Sale Price by Subdivision 2000 to 2007

                                             2000             2007            %

  • Pima Canyon                 $717,375       $1,629,536     +127%
  • Ventana Canyon Est       $869,500       $1,232,500     + 42%
  • Skyline CC Est               $692,324       $1,118,586     + 61%
  • La Paloma Est                $941,428       $1,600,000     +70%
  • Catalina Foothills 10        $637,750       $1,398,100     + 119%
  • Fairfield Sunrise             $290,147       $595,115       +105%
  • Shadow Hills                  $332,124       $618,068       + 86%
  • Villages of Ventana         $247,285       $503,320       +103%
  • Cimarron Fthls Est          $353,140       $635,681       + 80%
  • Catalina Fthls 7              $352,162       $758,333      +115%

In the luxury communities listed above, the cumulative appreciation has been 419%, or an average of 84%. While in the mid-priced communities it's been a whopping 489%, or an average of 97% during the same period. 
between the lines,
And there's a key difference at play when comparing the two types of communities that the numbers alone don't explain.
In these mid-priced communities, there have been very few, almost none, new homes built in the last seven years, so the appreciation that we're seeing, is just that, appreciation on existing homes.
So maybe the stable inventory, and the rising tide of higher priced luxury homes in the Tucson Foothills has benefited the mid-priced market.

While in the luxury communities, and in Pima Canyon in particular, there's been lots of new construction, and increasingly that new construction is for ever larger, more exotic, and more expensive homes. So while the figures are accurate, they reflect more than just appreciation on existing homes. They also reflect the higher cost of more exotic homes being added to the mix.
Pima Canyon opened in 2000, and added 290 luxury homesites to the Foothills in one swoop.
   
But this goldrush mentality to build more and bigger luxury homes, and to do it anywhere and everywhere you can, has gotten way ahead of the market.
At $1.5 to $2.0mil, there is now 51 months of inventory.
At $2.0mil and up, there is 63 months of inventory, in the Foothills.
While up to about $700,000 there is just 8 to 9 months of inventory.

And despite the increasing popularity of the Foothills as a destination for luxury home buyers, it is difficult to imagine that the luxury market is not going to suffer reduced appreciation, for at least the next year or two, as a result of rampant building.

cash buyers and the mortgage mess

Whenever I've worked with a buyer who is interested in making a really low-ball offer on a house in the Tucson Foothills, particularly a vacant house that's been languishing on the market for four, five months or more, my first question is always, "are you taking a mortgage or paying cash"?
If it's at all possible for them, I counsel them to consider making a cash offer combined with a super-fast close of escrow, two weeks or so. When a seller sees that combination of a cash offer and a closing date so close that they can almost smell the money, their objections tend to melt away and the low-ball offer begins to look a lot more attractive. We've been able to make some incredibly good deals using that strategy.
Now with the sub-prime mess spilling over into all mortgage categories, including prime borrower jumbo loans - as reported in today's Wall Street JournalMortgage Fears Drive Up Rates On Jumbo Loans, the (low-ball) cash offer-fast close strategy, may by necessity, become even more attractive to sellers as the ranks of mortgage eligible buyers dwindles. And for home buyers able to make a cash offer, there should be many more opportunities to make a great deal.
Here in the Tucson Foothills, with the average sale price of a single family home hovering around $700,000, many of the mortgages taken are prime jumbo. Until now, this wealthier, higher-end of the market has seen fewer adverse effects from the mortgage mess, but it looks like that's about to change.

July 21, 2007

a win-win deal for Tucson buyers & sellers

Long Realty (the company I work for in Tucson) has a great new promotion that's a win-win deal for both buyers and sellers in Arizona. It goes like this-
Save thousands! Use Long Mortgage when you purchase any Long Realty listing between now and September 15th, and save 1% on your interest rate for 1 year. On a $250,000 mortgage, you could save $160 per month – that’s $1,920 over a year!
It's a great deal for the buyer, they save a chunk of money for that first year in the house. And it's great for the seller that has their home listed with Long Realty, because it differentiates them,
and gives them a real competitive advantage in the marketplace.

July 18, 2007

is it turnaround time for Tucson

From an article in today's Arizona Daily Star
Home sales data raise turnaround hopes for Tucson
"...some indicators in the report — released Friday by the Tucson Association of Realtors — are pointing to a brighter future for the market", said Judy Lowe, president of the Tucson Multiple Listing Service.
here are those numbers for Tucson home sales
        June home sales (07 vs. 06)
• Homes sold: 1,226 Down 19.55 percent
• Pending sales: 2,053 Up 18.92 percent
• Median Price: $229,000, UP 1.78%
While the number of sales that closed in June was lower than at the same time a year ago, the number of pending contracts increased by about 19 percent, according to the report.
Judy Lowe said those signs mean the end is likely near for the slowdown in the Tucson market.
And there were fewer homes sitting on the market in June. The number of active listings dropped to 8,665 last month after reaching as high as 10,387 in April.
While I tend to agree with Judy Lowe that the end of the slowdown is near, I see the 19% increase in pending sales as an encouraging sign that will be a more convincing indicator if we see a similar increase next month and the month after that.
But the real reason that I agree is because of what I see happening out on the street between buyers and sellers. And Judy Lowe says it "Sellers are willing to give a little bit, and buyers are willing to not think they can steal the property" That's what I'm seeing.
After being far apart for a long time, sellers and buyers have gone a long way to bridging the gulf between them, and are now at, or very near agreement on where prices should be. Once that happens, homes sell.

July 07, 2007

the Foothills lifestyle

For a long time now I've said    '...the Foothills is pretty much built out, so that what you see is what will be, with few exceptions',
But now I find that I've got to back-pedal on that statement a bit.
On June 14th I wrote Last Big Development which talked about the 54 new homes that A.F.Sterling was building in the Foothills along Sunrise Dr by La Paloma, along with new commercial/retail space.
Then in New Concept for the Tucson Foothills I wrote about RiverWalk, a new development of 120 homes, plus restaurants and shops, that offer a style of housing and lifestyle that has not been available in the Foothills, 'til now. 
When I made the' pretty much built out' statement, I was thinking -traditional Foothills residential - an acre lot for one single family home. There are very few of those lots available.
But the developers, builders and investors, have found a way to utilize land that doesn't fit with that traditional concept of Foothills living, and in doing so, to broaden that concept and introduce new types of housing and lifestyle choices.
I never thought I'd be saying this, because I'm crazy about the traditional Foothills style of living, it's why I moved here, but I welcome these new concepts, and think they'll be very good for the Foothills. They're going to introduce the Foothills to people who are not interested in the traditional Foothills lifestyle, and probably wouldn't have considered living here, 'til now.
I think this all started -though maybe that wasn't the intention- with the explosion of new condos that have become available in the last couple of years in the Foothills. The new condos have made low maintenance, moderately priced housing in an upscale area, available to a lot more people.
You can buy a one bedroom condo in the Foothills in a great area for around $150K. While you could do the same thing a few years ago, there was a very limited supply of condos in the Tucson Foothills and they were mostly bought, sold and inhabited by second home-owner winter visitors. Today, with many more condos available in the Foothills, I see a lot of younger people interested in buying a condo as their primary residence in the Tucson Foothills.
Riverwalk, and to a lesser extent the A.F Sterling homes in Paloma Ridge, have begun to turn the definition of Tucson Foothills living on it's head. And that's a good thing, because it will add a new dimension to what it means to live in the Foothills, and in doing so broaden the appeal of the Tucson Foothills and help to diversify the population.

June 14, 2007

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.

June 06, 2007

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.

June 03, 2007

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