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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

Home Buyers Wanted!

I had a dream last night that I was standing on the street corner with a sign saying, “Home Buyers Wanted.” It was too real. With the scare we see every day on the news about the real estate market, it makes it tougher for Sellers to sell their home. For a few months I have run statistics on home sale for specific communities for my Buyers. I like seeing trends to give both sellers and buyers a comprehensive idea of what the market it doing in their area to help them with their decision making.

I suspected early that everywhere was experiencing a decrease in value. NOT TRUE. Some areas are being hit harder than others, but, not every neighborhood has seen prices decrease. Some have flat lined and others have seen a very slight appreciation. What does this mean to Buyers and Sellers? We’ll get to that shortly.

I sat down with my buyers and showed them the trend for the area they were wanting to make an offer in. Going back to January of 2004 to present I found that a better pictures is painted by using January 2005 to present. 2004 was just too crazy with too much price increase. So we looked at the past 18 months. For this particular neighborhood, prices peaked in January 2006. For many neighborhoods I have checked since, prices peaked between May to July of 2005. That is when we noticed prices started to go down. Not rapidly, and they definitely were not going up for that geographical location. Now we were ready to make an offer and argue the facts. They won, the house appraised for higher than they paid, and they are happy.

I started applying the same effort for all my clients, selling or buying. I had to get out of the nine dots of 3 to 6 months history. What I have seen is an annual decline from zero percent to 12% in some neighborhoods depending on the square footage. Yet, in other neighborhoods in another part of the city I have seen a .5% to .75% appreciation during the same time frame. Go figure. Getting there.

Everybody has heard the first rule of real estate…location, location, location. I haven’t run enough stats to confirm, however, what is coming to the surface are location followed by the appreciation a specific area seen during the frenzy. The areas that seem more stable appear to have seen less appreciation during the frenzy. Those areas that saw the craziest price increases appear to have been hit the hardest over the past 18 months. As time goes by and I run more stats on specific areas for specific clients I will find more and whether this is an assumption or reality. For now, lets leave it at assumption.

Now for Buyers and Sellers.

Buyers should look at the history of a specific geographical area going back to at least January of 2005 while prices were still increasing. A few things to look at:

Was there a peak at anytime?
What has the trend been since the peak?
Based on the trend, is there a predicted price value in six to twelve months?
What are the time frames between sales?
How long do truthfully I plan staying in the home?
How much risk are you willing to take?

Sellers should look at the same history that buyers are looking at. Some questions they should ask themselves before putting their home on an already flooded Tucson real estate market:

How motivated am I?
What is the rate of absorption for existing homes in my price range?
What has been the trend in my neighborhood for the past 18 months?
What does the trend predict for the next six to twelve months?
If my home does not sell in the next six months, what will it be worth in six months?
If I must sell and have not been in my home long or over refinanced, do I lose a little now or a lot later?

Buyers can still safely buy in this market if they plan on staying in the home at least three to five years. If not…RENT! Getting with a Realtor (like me) who will do their homework and guide you to a good decision will be critical.

Sellers, being motivated, being reasonable, and knowing when to cut bait and run will help. Otherwise you may be standing on the street corner with this sign, “Will Sell Home For Food.”

Not every area is seeing prices go down. This week the national report will come out with an anticipated overall average of prices decreasing. Notice it will be “overall” and not geographically or community specific. Be smart, do your homework and hire a Realtor who knows what is going on and who knows how to protect your best interest.

More Reading

Seven Steps To Buying A Home
Seven Steps To Selling A Home

This entry was posted on Monday, August 27th, 2007 at 3:18 pm 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.

Doug,

Good post!

One bone to pick: Look at the historical mean of the home prices for a particular neighborhood. Use a 1994 to 2004 metric that breaks down by; Sqft, bed and bath, and taxes. That will tell you where the prices are going.

…in the coming months that “location” will be irrelevant. Financing is a “root” level operation and has no location bias. Historical sales data that does not factor a significant number of years previous to the boom (pre 2004) will not correspond to the lending guidance.

August 27th, 2007 // bobby joe

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