TheTucsonFoothills

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

a realistic depiction

The Tucson Association of Realtors® has released the April residential sales statistics for the greater Tucson Metro area. click here to Download april_sales_statistics.pdf

This release is accompanied by an introductory letter from Kimberly Clifton the President of TAR, that summarizes her opinion on the state of the market based on the sales data that follows.
This month she says, " With the first quarter of 2008 behind us, our industry is continuing to show small signs of recovery. No one is denying that the market is certainly not where it was in 2007; although the quarterly statistics for 2008 show a slight but steady
increase month over month" ...
" Some of the factors to look for in a recovering market are active listings, new listings and pending contracts. With an
increase of 27.11% in pending contracts over 2007, a decrease in active listings by 15.20% over 2007 and a decrease in
new listings by 20.87% it would appear that Tucson is headed in the right direction"

Bravo! Looking over the sales data, it seems to me that Kimberly's sober statements accurately depict the current market conditions as well as supporting a guardedly optimistic outlook for the future. So it seems realistic and reliable.

This is very refreshing.
Because at times in the past, before Kimberly Clifton took over as President of TAR, try as I might, I've often had a really hard time making a connection between the (overly sunny) introductory statements & opinions that were expressed and the hard data that followed it. And I've heard from many others that feel the same way. 

And aside from the fact that people don't buy this stuff, and it tends to alienate them toward Realtors® in general, don't the officials of the various local and national Realtor® organizations have a responsibility to provide accurate and realistic guidance and opinions on the state of the market, both to their Realtor® members and to the public.

*Please note that while some statistics are broken down by specific areas of Tucson, North, Northeast, etc, the emphasis of this report is on the Greater Tucson Metro area as a whole.

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

the bigger and bigger we get ...

There's a perception that the Tucson Foothills are becoming, or have become, McMansionland. At the same time, everything that I read suggests that home buyers are shunning McMansions and leaning toward more reasonably sized homes.

Sales of larger homes did increase in 2004 and 2005 in the Foothills - while sales of smaller home remained steady during that period - but by 2006 large home sales started to fall, along with sales of every other size home.
The chart illustrates sales over the past five years for homes in two size ranges, 0 - 2500 sf (what I call smaller homes) and 4000 - 6000 sf (McMansionland) 
Sales of smaller homes appear to have dropped more dramatically than the larger ones, but they're dropping from a much larger base. And as a portion of the total homes sold, sales of smaller homes have remained very consistent over the years noted.
During that time sales of smaller homes averaged a very tight 47% of all homes sold in the Tucson Foothills.
While sales of McMansions averaged just 9% of all homes sold. 
And even larger homes, those over 6000 sf, were a minute portion of sales (about 1.5%) during those five years.

I think part of the perception that larger homes are taking over, has to do with the fact that the larger homes, are larger, and more visible, they stick out more, you can't help noticing them. 
When you drive around the Foothills, almost all the homes you see being built, look like small castles. And lots of them are being built near the road, so you can't miss them.
And there are lots of larger homes for sale. 137 in the Tucson Foothills today, that are 4000 sf or larger.
That's 23% of the total inventory of homes for sale in the Foothills.

Here's the problem. Since the year 2000, homes that are 4000 sf or larger have never represented more than 11% of the total homes sold in the Foothills in any one year.

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

price declines

I'm going to go at this one one more time, at the risk of beating it into the ground. Because home buyers and potential home buyers here in the Tucson Foothills continue to quote from recent national media headlines about big home price declines that have occurred in other parts of the country. Yes, they quote the double-digit declines in Miami and Vegas, and LA. And it scares them.
And some people assume that the same is true, or must be true, for Tucson and the Tucson Foothills. But it's not.
The likely reason they assume this, is because there are no big headlines in the national media about Tucson or the Tucson Foothills.

Why is that? Do you think it could be because there's nothing sensational to report. Because we have not had the double, or even high single-digit price declines that they are so fond of blaring across the top of the page.  What would they say, READ ALL ABOUT IT
              Tucson Prices UP .36%
  Tucson Foothills home prices tank -3.7%

 

These figures are for single family homes, no condos, no townhomes, etc. What does the future hold for us here in Tucson, we'll have to wait and see. As they say in the mutual fund prospectus,
' past performance is no guarantee of future returns'.

Tucson residential housing report

The Tucson Association of Realtors just released the 2007 yearly market report for residential properties for the entire Tucson area. This is a 28 page report that's chock full of sales data from the Tucson Multiple Listing service.

And this year it's new and improved. It looks at the Tucson real estate market from every which way you can - with more information, more charts and graphs, and more detailed breakdowns of the sales data by area, price range and property type.
It's right from the horses mouth, and it's got it all, the good, the bad and the ugly.

No matter where you are in Tucson - the Tucson Foothills, Oro Valley, Vail, West Tucson, or you're interested in buyiing or selling a home here, and you're into 'the numbers', I think this is as detailed and comprehensive a picture of the Tucson home market as anyone could hope for.
In the report, North (N) is the Tucson Foothills, NW is Oro Valley.
Click this link
Download mls_07_year_end_market_statistics.pdf

And see thefoothillsToday.com
to search for and learn more about Tucson Foothills homes

leader of the pack

Long Realty (the company I work for ) just released the Market Share figures for the six largest real estate companies providing residential
real estate services in the greater Tucson area.
See the chart below.
This is based on residential property sales for all of 2007.
Long comes in at about 3 times more market share than it's next closest competitor, (Data obtained on 1/17/08 from Tucson MLS for all closed residential volume between 01/01/07 - 12/31/07 rounded to the nearest tenth of one percent and is deemed to be correct)
Unfortunately at this point, the graphs have only been released in a print version that does not display clearly on the web. But in both charts(the first is for all residential properties, the 2nd for those priced at $1.0mil+) Long Realty is the yellow band towering over the others.

Is bigger better?
No. We're not better because we're bigger.
We're bigger, because we're better.

November TARMLS Residential Sales Overview

The Tucson Association of Realtors® Multiple Listing Service recently released it's November Residential Sales Overview.
These results are for all residential property types in all areas of Tucson (not just the Foothills) and compare results from this November of 2007 to November of 2006.
So without further ado, here's the introductory letter from Judy Lowe, President of TARMLS, followed by the numbers.

TARMLS
THE REAL ESTATE MARKET IS LOCAL…..and the Tucson Association of REALTORS® November 2007 Housing Report's indicators show a stable market continues when comparing November '07 to November '06.
For the sixth consecutive month new contracts opening escrow, listing inventory and new listings coming on the market all
supported the positive trend when compared to November 2006.
-The 910 New Contracts opening escrow compare with 891 in November 2006.
-The Active Listing inventory of 9,234 is slightly fewer than the 9,238 in November 2006.
-New Listings coming on the market of 2,224 were also fewer than the 2,380 in November 2006.
The National Association of REALTORS® has projected that the existing-home sales will trend up in 2008, with this same trend
that we see in Tucson, being seen less dramatically in other cities. Lawrence Yun, NAR Senior Vice President and Chief Economist has said, "Now that mortgage conditions have improved, some postponed activity should turn up in existing-home sales over the next couple of months, and I expect sales at fairly stable to slightly higher levels."
THERE'S NEVER BEEN A BETTER TIME TO BUY A HOME!!!
HAPPY HOLIDAYS AND A HEALTHY AND PROSPEROUS NEW YEAR.
JUDY LOWE

(now maybe this is a case of how do you see the glass, half full or half empty, but glancing at the sales numbers below, I'm not quite sure how one could reasonably characterize the current market conditions as stable when compared to November of 2006.
But see what you think.) JS

Sales Snapshot
Home Sales Volume
Decreased 22.10% from $262,678,000 in
November 2006 to $204,906,024 in November
2007.
Home Sales Units
Decreased 23% from 982 in November 2006 to
759 in November 2007.
Average Sales Price (all residential types)
Increased 1.72% from $267,493 in November
2006 to $269,968 in November 2007.
Median Sales Price
Decreased by 2.30% from $218,000 in
November 2006 to $213,000 in November
2007.
Pending Contracts (not yet closed in escrow)
Increased 2.13% from 891 in November 2006
to 910 in November 2007.
Active Listings
Decreased 0.04% from 9,238 in November
2006 to 9,234 in November 2007.
New Listings
Decreased 7.65% from 2,380 in November
2006 to 2,224 in November 2007.

just so you know

From an article in Inside Arizona Business, here's the latest on foreclosures in Arizona.
Arizona Foreclosed Homes Head to Auction Block
Over 200 Foreclosed Homes Totaling $54 Million Head to Auction Block
Arizona ranks eighth in the nation among states with the highest foreclosure filings. According to Realtytrac, there were 6,339 filings in October 2007. About 300 of those homes are in Pima County. The majority are in Phoenix and it's those homes that will be auctioned this weekend. 
Read it HERE, and weep.
I haven't covered the foreclosure scene at all because the very small number of foreclosures in the Tucson Foothills wouldn't register a blip on the foreclosure meters. But I thought the numbers quoted in opening paragraph above would give some perspective, and perhaps some reassurance, on where Tucson stands (Tucson is in Pima county) on the Arizona foreclosure yardstick.

see if this computes for you, cause I don't get it

The Tucson Association of Realtors Multiple Listing Service just released the sales numbers for October 2007 under the following banner.
"TUCSON REAL ESTATE MARKET MAY BE SAYING "WE'RE HOLDING OUR OWN".when reviewing the Tucson Association of Realtors Multiple Listing Service October 2007 statistics."
"For the fifth consecutive month new contracts opening escrow in '07 exceeded the same month in 2006.
"The October 2007 shows 993 new pending contracts, and the October 2006 shows 782."
OK, that sounds really promising, pending contracts are up again significantly for the fifth consecutive month vs the same month last year. Great!
Yet somehow and inexplicably, the TARMLS report indicates that -
"Home Sales Units: Decreased 27.85% from 1,095 in October 2006 to 790 in October 2007."
This has been the case since June of this year - TARMLS reports that pending contracts are UP significantly - +18% in June, +63% in July,
+14% in August, +32% in September, +26% in October, YET SALES ARE DOWN, -19% in June, -10% in July, -26% in August, -36% in September, -27% in October.
How can that be. What happened to all those homes under contract.
For each of the last five months, they report significantly higher pending contracts than in the same months in 2006. And each month they predict that these higher pending contracts will soon translate into higher closed sales.
"It's elementary, my dear Watson", more homes under contract, soon equal more homes sold. That makes sense.
What doesn't make sense, is that in 2007, more homes under contract does not equal more homes sold.
It doesn't take Sherlock Holmes to figure out that something is amiss here. Either an awful lot of deals are falling through each month, 30%, 40%, or more, or an unusually high number of these deals are for new homes that have yet to close escrow.
Both of those are possible. But after making this same cheerful prediction, which in five months has yet to come true, wouldn't it be nice if along with the rather dubious RAH-RAH headlines, TARMLS offered an explanation for why this is happening, or not happening, as the case may be. 
I emailed an official at TARMLS and asked if they had an explanation or a theory that would help shed light on this.
I didn't get a reply.
A lot of us are scratching our heads and waiting for that a-ha explanation from TARMLS. 

when 98% is not 98%

These days it's more important than ever for buyers and sellers to have an accurate picture of how close to list price homes are selling for. What is the % of sale price to list price.
Today homes are lingering on the market much longer, and during that time, many of them are having price reductions, sometimes multiple price reductions during the life of the listing. And because of the way the % of sale price/list price is calculated by the Tucson MLS, you have to do a little digging to get the whole story.
For example, 33 homes have sold in the Tucson Foothills in the last 30 days. The Tucson MLS reports the average % of sale price/list price for those 33 homes as 93.65%. And if you calculate it based on the most recent list price, which they do, then 93.65% is correct. 
But many of these homes have had price reductions, sometimes two or three price reductions before they sold. And if you take that into consideration, which I think you should, and calculate it based on the original list price, the actual % of sale price/list price is 88.48% for those 33 homes.
Here's how it works. Let's say a home is listed for $750,000, then the price is reduced to $725,000, then it's reduced again to $699,000, and then it finally sells for $675,000. 
The way the MLS sees it, the home was listed for $699,000,
(not $750,000) and sold for $675,000, so the % of sale price/list price is 96.56%. Technically, that's correct. 
But what really happened is that the home was listed for $750,000 - and after 2 price reductions, it sold for $675,000. 
So the % sale price/list price is really 90%. Not 96.56%.
That's what really happened, and that more accurately reflects what's going on with homes for sale and sale prices in today's market.
And of those 33 homes that sold recently, some of them sold for just 70% of the original list price, while others sold for 99% of list price.
So no matter how you calculate it, the averages are just that, averages. Whether you're buying or selling, take the time to find out the actual % of sale price to list price - in the area, and for the type and price range of home that you are interested in.
It's just one more bit of knowledge to help you understand today's market and make the right decisions regarding an offer price for a home you'd like to buy, or a list price for the home you'd like to sell.

average sale price comparison for Tucson metro area

Here's a quick reference of average sale prices for residential properties during this past April in different areas of Tucson-
Average Sale Price per Area

This info is from the Tucson Association of Realtors
Multiple Listing Service

lots to choose from in Tucson

These latest reports - courtesy of Long Realty - graphically illustrate the state of the housing market for the Greater Tucson metro area. They compare Active Listings, New Listings, Unit Sales and Days of Inventory for 2007 with prior years. And see the notes below each report which highlight and clarify the key issues in a no nonsense manner.
**Click on the charts for a slightly larger and more legible version**

Also from Long Realty, here's some additional analysis and explanation for each of the charts listed above.
Active Listings Report
We have never had a market like this, with such high numbers of unsold houses. We can expect longer market times and continued aggressive bargaining by buyers. Even the low interest rates and strong employment that exist in Tucson will not rapidly reduce inventories.
Unit Sales Report
There are no indicators that the market is about to pick up, although there appears to be a good supply of ready, willing and able buyers. Prices are under continued pressure. This is a buyer’s market.
Sellers are continuing to reduce prices. As properties are selling at less speculative prices, new comparable sales establish new levels of pricing, and there will continue to be downward pressure on prices all year.
New Listings Report
There is continued interest in buying and selling in Tucson. Rates are creeping up, but are still historically low. Listings continue to come on the market at a heady pace, and this very high inventory level will put a lid on price increases. This is a buyer’s market.
Days of Inventory Report
Inventories are not being taken down, even by good sales and price reduction activity. Motivated parties are completing transactions. Buyers are passing over unmotivated sellers and ignoring properties in poor condition. In coming months, inventories may drop as some unsuitable properties leave the market. However, there are some early indicators that foreclosures will increase as rates rise and adjustable rate mortgages are re-set.