Sorry, if this breaks anyone’s Housing Bubble, but there isn’t any housing bust in Tucson. Quite the opposite. The Average Sale Price for resale in October 2006 in Tucson was $266,854 which is an increase of $13,074 over September and the New Construction Average Sale Price was up $34,162 from September to $311,658.
The Tucson Residential Real Estate Market continues to appreciate at a rate between 5 – 8% for the year. While that is nothing like the increase over the last couple of years it is still a good rate of appreciation given what is happening in other real estate markets across the country.
What then is all the talk about lower prices, higher inventories, a buyers market, etc.
Let me illustrate what has happened in the Tucson Real Estate Market.
This year a huge gap opened between asking price and average sale price. Summer of 05 saw increases in asking and sale price of up to $10,000 a month. When Thanksgiving weekend 05 came it was like someone switched off the feeding frenzy and overnight it seemed there were no more buyers.
But sellers kept putting their homes on the market and no matter what a Comparative Market Analysis showed they wanted more.
- “We are in no hurry”
- “Last year our neighbor got . . .”
- “Well, let’s try it at this price we can always come down”
- “Why isn’t anyone coming to see my house?”
- “What are you doing to market it”
- “My house is worth more than that”
- Homes are on the market much longer
- Inventories of homes are up over 9400 (average approx. 4500)
- Buyers are frustrated with Seller unwillingness to budge on price
- Sellers gradually lowering asking price but still too high
Some homes have now been on the market for over a year, some have reduced their asking price over the course of that year by more than $100,000. Even so, many are still too high for the market. Comparative Market Analysis of these homes show that even with these kinds of reductions in asking price the price per square foot is more than other homes currently on the market.
We have a buyer’s market, record high inventories of homes, Asking prices coming down in some cases over $100,000 from last year. The perception this leaves “A Housing Bust must be happening.” We have some buyers coming into our market seeing these things in the news and thinking they can make a very low offer and have it accepted. In many cases sellers won’t even counter the offer.
Tucson homes are appreciating in value. Buyers can find reasonably priced homes, and sellers can sell their homes with reasonable appreciation in value.
Tucson Housing Bust? not here, not now.