Tucson Real Estate Blogs » Tucson Real Estate On The Move

Tucson Real Estate & Golf Properties

Douglas Trudeau , Assoc. Broker
Prudential Foothills Real Estate
64 N. Harrison Road, Suite 160
Tucson , AZ 85748
Mobile: 520-954-2209
Contact Me

Tucson Real Estate On The Move

In 2001 Tucson was listed by Wall Street Journal as one of the top 20 cities for vacation, second and retirement homes. Things haven’t changed much. Tucson remains as a popular city for people to move to.

What happened to the Tucson Real Estate Market in 2004 trough 2005?

The best analogy is that of a train. In April of 2004 the Tucson real estate market experienced a ridiculous increase in sales and prices that lasted for months. Investors were showing up literally by the bus load to buy up as many homes as they could in new communities. A normal 6-7% annual appreciation in homes skyrocketed to 24-32%. Multiple counter offers were common, with many homes selling above the asking price. It was a speeding train out of control with cars flying off the track everywhere as the load got lighter and the train moved faster. Suddenly in August of 2005 the emergency brake was applied and the train came to a screeching halt. Since September of 2005 the engineers have been working to get the train back into motion. Add to that over 3 times the number of cars to pull with the same number of engines to carry the load. The start has been slow, but momentum is slowly starting to build. Eventually, the train will be heading back down the track at a normal speed. The train isn’t sitting still, its just a little slow from all the weight of so many homes on the market. When the number of cars will get back to normal is hard to predict.

What’s happened to the Tucson Real Estate Market in 2006 and is happening in 2007?

It was until well into 2006 that the number of homes (inventory) on the market begin to skyrocket. Sales remained steady, and actually increased slightly from previous years. Sellers thought they could expect outrageous prices that 2005 brought. Inventory increased, the number of days a home remained on the market increased.

Homeowners repeated Black Thursday and Black Tuesday and too many put their homes on the market. Sales in 2006 were better than 2003 and prior. 2007 is showing signs of even stronger sales. Like the Stock Market following the 1929 Stock Market Crash home sales and value will increase.

Savvy sellers will see dollars

Currently there are over 10,000 homes on the Tucson real estate market. From manufactured homes to luxury homes. There are 11 months of inventory. What does that mean? If not a single home came on the market and at the current sales rate there are enough homes to supply buyers for 11 months. Hence a Buyer’s Market. Savvy sellers are picking up on this fact and are offering reasonable prices and incentives. Inflexible over priced sellers will continue to see a For Sale sign in their front yard while the real world passes them by.

A Buyer’s market that’s changing

With sale inventory at its historical highest Tucson real estate is a buyer’s market. However, Buyer beware. Prices that slowly declined over the past 18 months are showing signs of reversing. Sales are increasing and reasonable sellers are seeing multiple counter offers. The train is moving. Buyers who wait for prices to decrease further will soon discover that prices are on the edge of rising. That does not mean that there won’t be over priced homes on the market. There will be more homes at a reasonable price though. Watch the market as it changes and you will see that recovery is well on its way. We are past the fear of the bubble bursting. The Chicken Little buyers who wait will soon find that they will be getting less home for more money. We are dangerously close to the woulda-shoulda-coulda breaking point. Is it really worth the risk to wait?

Projection of sales in 2007

My projection for sales in 2007 is that sales will continue to increase into May. Tucson’s traditionally strongest month. Sales will continue to be strong in June, drop slightly as usual in July, then pick up for August before school begins. Then sales will follow expected reductions for the fall and winter. My predictions of 2006 were very close to actual sales. Lets see what 2007 brings, so far I am close.

Monthly sales from 2000 to 2007 are shown in the graph to the left. Predictions from the National Association of Realtors and the University of Arizona indicate that the market will have corrected itself by July this year. Good news for sellers. So, buyers who are on the fence post waiting for a deal, your days are numbered. 2007 is the turn around year for the Tucson real estate market. 2008 will see a stronger appreciation of home values. A comforting thought for concerned home owners. Compare the sales of 2003 to that of 2007. Throwing out the unreal sales of 2004 and 2005 as well as the questionable sales of 2006, you will realize that sales are higher than 2003.

Interest rates are hovering around 6%, and below for those willing to pay a point for a buy down. Who knows what the future will bring for interest rates. Right now is a great time to start searching and to buy. As the market settles prices will begin to rise.

This entry was posted on Tuesday, April 10th, 2007 at 6:01 am and is filed under Tucson Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

[…] Tucson remains a strong market. More buyers are looking to buy in Tucson than in Phoenix. Confirming that Tucson is a stronger market. 51.5% of Home Buyers choosing between Tucson and Phoenix choose Tucson. Of those buyers 59% are buying a primary residence, 10% are buying second and vacation homes, 21.3% are Investors. Yes, I said Investors. Who said all the Investors pulled out of the market? In April I wrote about the Tucson Real Estate Market On The Move. The market is still moving up. When looking at sales in 2003, the last reasonable year for the market, Tucson’s real estate is actually healthier in sales. […]

May 11th, 2007 // Tucson Real Estate Blogs » Blog Archive » Who Else Wants To Know Homes Sales In Tucson?
[…] The housing market is both cyclical and seasonal. Historical cyclical trends have shown us that there have been, are, and will be periods of price increases in a hot market and periods of cooling down following the hot market. We went through a hot market in the Tucson area in 2004 to 2005, with some overspill into 2006. This hot spell in the market was higher than anticipated. Leaving a long cool down period. In my blog Tucson Real Estate On The Move, I related the market to a mile long train that came to a stop, and is now trying to get started again with 3 miles of cars behind the same number of engines. The train hasn’t moved a great distances, but, it is struggling to move, is moving forward and not being drug backward. […]

June 25th, 2007 // Housing Market and Predictions

Tucson Real Estate Blogs & Golf

Submit Email For Feed

Really Simple Syndicate

Tucson Real Estate On The Move

Leave a Reply

Categories

Archives

Favorites

Tucson Golf

Blogroll