‘Historic High’ For Tucson Listings
The Daily Star has some housing bubble news for Tucson. “After a year of Tucsonans rushing to sell their homes to take advantage of soaring profits, it’s now a buyers’ market. More Tucson-area homes were on the market last month than at any time in the past nine years, new numbers show. There were 6,499 homes listed for sale on the Tucson Association of Realtors MLS in January, an 87.3 percent increase over January 2005. And the number is going up fast: January’s figure represents an increase of 1,042 homes over December.”
“Last year’s housing frenzy, characterized by frustrated home buyers and some homes being snapped up within hours of being listed, is over, experts say. Buyers can now take a little time in looking for homes and feel comfortable sumbitting bids at, or even below, asking price.”
“The jump in the number of homes listed even surprised Paul Olson, president of the MLS. ‘We knew it was going to increase, but we had no idea it was going to double,’ Olson said. ‘Sellers are getting a little more anxious.’ He called January’s listings a ‘historic high’ dating back to January 1997.”
“There’s no clear explanation for the jump, Olson said. Last year’s real estate boom lured hundreds of new agents into the market. Individual homeowners may be trying, only too late, to cash in on a heated market. The high inventory may be caused by investors dumping their inventory, said John Strobeck, a Tucson housing analyst. Investors appeared to start pulling out of Tucson’s market in October, when Strobeck said he saw individuals and limited-liability companies were selling multiple homes at the same time.”
“So far, the increased competition isn’t pushing down prices. The median price of a home sold in January was $215,875, up 23 percent from January 2005. January’s figure decreased 1.9 percent from December’s median price of $220,000.”
“Signs of a market slowdown go beyond the number of listings, said (broker) John Rock. New home builders are courting real estate agents and buyers alike with incentives. ‘They’re offering help in closing costs. One is offering $10,000 in upgrades,’ Rock said.”
“Some sellers, hoping to cash in, turn away from agent suggestions that they should lower the selling price. ‘They don’t want to hear what the Realtor is telling them,’ Rock said. ‘Tucson’s always had a great real estate market. It just got thrown out of whack last year by real estate investors.’”
“And timing is everything, said Kristine Lowden, one of Rock’s clients. She is selling her home near West Linda Vista Place and North Thornydale Road and has bought a home near North Shannon and West McGee roads. She listed her home for sale at $282,000 in October. It finally sold last week for $265,000. ‘I got frustrated toward the end. I mean, I knew it would sell. I wasn’t too concerned about that, but I was concerned about, ‘Gee, how much am I going to have to come down on the price?’ Lowden said.”
“She wonders if she could have sold for more if she had listed the home only a few weeks earlier. ‘I think I just missed the window of opportunity,’ she said. The slowing market also worked in her favor when she bought her new home for $224,900, about $5,000 below asking price.”
Thanks to the readers who sent this link in. I’m glad we finally have some news for the folks in Tucson!
•An estimated $2.5 trillion of household debt is set to reset at higher interest rates in 2006. Given the higher level of interest rates, it is safe to say debt-service costs will easily exceed their current record 13 ¾ percent of after-tax income.
Before, when inventory was low… they would say “supply and demand”. Now that inventory is through the roof - it does not matter. Funny math!!!
2.5 trillion? these reset numbers are all over the map
I have a friend who bought in Goodyear Az last year, he put his 3b 2ba up for sale, and said he’d clear 190,000. Now he says 130. He wants to take the profit and buy in North Carolina. Just wondering what you think, he truly does not believe there is a bubble. Says maybe prices drop 5%. We are the bull and the bear at work, he tells another co-worker to buy now, while I tell her to wait. She says “wait for what? You have been saying wait for 3 months.” She wants to buy in (of all places) Riverside, Ca.
Tell her to go ahead…. then do the “I told you so” later. Riverside…. yuk!!!!
Patricia,
I have been following the Goodyear/Avondale market closely since listing and selling my property there last summer. In Avondale, as of last June there were 75 SFRs for sale priced $250K and above. Today, there are nearly 500 listings priced at $250K and above. The numbers speak for themselves. What I see happening can really be characterized as sellers digging their heels in, believing the current slowdown is temporary and it’s only a matter of time before things pick up again. Hogwash. There has been an incredible amount of building in the Avondale-Goodyear area, especially south of I-10. South of I-10 is where builders couldn’t build fast enough as CA speculators rushed in to purchase their “investments.” Problem is, south of I-10 sucks…period. Last summer I was talking to a rookie Avondale police officer who lamented having to patrol my area north of I-10 because he said for an Avondale cop, all the action is south of I-10. If your friend is on the north side of I-10, he had better price aggressively. If he’s south of I-10 then he’ll be lucky just to unload the place for any price.
you’re right, Avondale is a shiiiiiiiit hole. emphasis on the hole. These people are all delusional. I wound not want to be in south avondale at night with a .357 in hand… it’s just that scary. Looks like pics of Gaza Strip I see on CNN.
I live in Orange county and have been a sales rep in Riverside for 20 years and believe me it is a hot smoggy area and way over built. The 91 freeway into Orange County takes 2 hours in the morning and the same in the afternoon on any week day . Why would you want to live in Riverside?
40-year loan has no money down
State stretches its mortgage assistance to help first-time home buyers qualify.
It’s good to see the slowdown start in my home town of Tucson, as I am a potential home buyer there. I wouldn’t buy now though - sellers’ asking prices are still way too high. Sellers will stay in denial for a while longer. Give it another year or two of high inventory and low sales, and I think that sellers will be dropping their prices significantly.
In a different extract, someone commented that you need to have buyers for there to be a buyers’ market. Not true! The very best type of market for a buyer to step into is one where ALL the buyers have gone away.
You should be able to put together a sheet of facts, such as the increase in listings, foreclosures, interest rates, and the findings that many areas are 30% overvalued according to income or rents. Explain to sellers that prices will drop, and that it is better to get out now than to wait until prices have dropped more.
I suppose that you have to explain to people that your lowball offer is “nothing personal” and “just business” and that they need to readjust their expectations. I think as long as the seller is not offended by the lowball offer, they will eventually think rationally and realize that losing $50K is better than losing $100K. Or so I’d like to believe!
Two waves of speculation inflated Tucson prices.
First began in 2002 and lasted till 2004(May). It was caused both by low rates and RE #$%agents. It brought ASKING prices up to 20-40 %. At the same time many of these houses were on the market for 6-8 mo. And sellers were ready to dump 10-15 %.
In May 2004 $%#heads from Phoenix/Ca come and jerk prices up by another
20-50%. At this time sellers didn’t dump asking price.
Wages in Tucson way below average and i do believe that prices will fall to
2001 level.
This town didn’t have locals making enough to pay 2001 prices.
those price drops aren’t anymore than 6%, what a yawner!
Home buyers expo
same article different day
how about focussing on what’s next- we know inventory is up- how does 2006 compare to 1990 - gulf war 1 was the big drop then
A sad article about a buyer of a new home
Head’em up, mov’em out, Rawhide!
That’s cute. One of my favorite Westerns back in the day. WAY back in the day. LOL!
BayQT~
Rollin, rollin, rollin…
… As the souffle falls…
Wow! What an article! I had a builder friend (Clearlake, Ca) walk on tour of properties in Dublin Ranch Villages in Dublin, Ca, and with just a look-see at what was offered was disheartening even to him. There used to be a time when builders actually took pride in their work, but those days seem to be long past. The first home I owned (late70’s) was my absolute favorite ….built in 1907, 6-7″ wood baseboards, redwood panelled dining area, huge eat-in kitchen with a pass-through to the dining room, which was part of a built china cabinet, redwood pocket doors between the living and dining rooms, fireplace with wood mantle and huge mirror…I could go on. Houses are not built like that anymore. Of course, over the years the house underwent updating (wiring, plumbing, etc) but that was expected.
Anyway….I sure do feel for the writer of that article. What an experience.
BayQT~
Houses like that ARE still built (I’m an architect and can confirm this) but many builders don’t do what’s needed to attain this and many homeowners don’t seem to care. the mindset seems to be “as much house for the money as possible” and that translates into cheaper materials and more square footage.
Can you say: McMansion. The junk food of housing.
“She wonders if she could have sold for more if she had listed the home only a few weeks earlier. ‘I think I just missed the window of opportunity,’
As I suggested in another Thread…
Seems like we should start collecting these typical CATCH PHRASES (like “SOFT LANDING”, more “NORMAL MARKET”, etc) and somehow get a computer GEEK to enter them as “favorites” into the Microsoft WORD program….
THEN realtors, media writers, bloggers, sellers, buyers, etc. all across this country can just enter CITY NAME, Date of report, and these catch all phrases… and save themselves a ton of time in typing the goings on in a particular town.
Sarcastically- my point is that we are hearing these same stories, dilemnas, market trends, price corrections, seller woes and quotes on a daily basis in ANYTOWN USA.
Ben has done a fabulous job of exposing the nationwide epidemic of a housing bubble (bursting)… and it is not limited to coastal cities on the west or east coasts-
It’s happening in Tucscon, Pheonix, Minneapolis… like I said: FILL IN THE BLANK City!!
Missed out by two weeks??? What an idiot. There is no precision to timing the market…just luck. The month I decided to sell my home in San Diego (May 2004, Zip 91915) there were 11 listings in my zip code. I gave myself one month to prep my house before having the realtor list it. By June (one month later) listings had risen to 41. Crap I thought, I really missed out. I was nervous and it took a LONG two weeks to sell above asking price (jeez, it was only taking two days to sell last month). Anyway, I’ve watched the listings over the last 18 months and that particular zip code now has over 180 listings! Thats an increase in inventory of 439 percent and people are still asking ridiculous prices for very small homes. You would have to be a nut job to buy any of those homes without a minimum 20% drop in current asking prices.
Well said OutOfSanDiego,
That’s why I tend to jump down the throats of Flipper Braggarts, not because I am jeolous (I am an investor myself)… but that MOST of us are just plain lucky to be in our particular markets at the right time…
and pricing, timing, media vibe, HERD’s jacked up on “getting rich”, low rate financing, and all the other things that go in to the equation = pure luck, in a lot of circumstances.
If I got out Fall ‘05, whose to say that I might have left money on the table? Or for that matter- did I lose money because I didn’t get out by Summer ‘05??
How about ‘tanking’, ‘drowning’,’ under water’ ???
Boy if I could just find that thread posted here a few months ago about the New York couple who purchased 7 homes in Tucson and were looking for more. She said she was ignoring any bubble talk and going full speed ahead. Priceless!
I remember that posting too! I think she and hubby were using their retirement savings for these lucrative “investments”! Sure she’s running scared now.
Vegas Viewer, spacepest, etc… anyone tracking Las Vegas’ inventory??
http://www.benengebreth.org/housingtracker/location/Nevada/LasVegas/
Thanks! Despite the lag, I still expect LV to challenge PHX for the “ground zero” crown. Too much construction, too many investors, non-existent industry (outside of tourism).
Nope…Phoenix will be clearly end up being ground zero (this is fun, too bad we can’t bet on it). I agree that the bubble is popping in Vegas, but it won’t be anywhere near as drastic and pronounced as the Phoenix area. There are several factors, but one is that I think there are more people who actually ended up actually moving to Vegas (i.e. actually living there). The new enormous resort casinos employ thousands of people each and along with them are associated support infrastructure jobs (teachers in the schools, administrators, food product distribution, supermarkets, etc.). What I have witnessed in Phoenix is an exponential number of speculators (from California and yep…from Vegas) who “missed out” on making money in the Vegas and SoCal bubbles and all converged on Phoenix. I don’t know of any of them that are moving there to live (save a few retirees). The price runup in Phoenix (percentage wise) has been even crazier than SoCal or Vegas when you look at the amount of time it took. I know lots of areas (Goodyear, Mesa, Peoria, etc.) that have doubled in the last 18 months. It think it will crash as fast as it went up. Even a low paying job base, as long as there are available jobs, lays a better foundation than homes built purely for speculation with no increasing in area employment.
I like OC Renter’s site for tracking:
bubbletracking.blogspot.com
Another reason not to sell yourself short and buy a $400,000 condo. There will be a big talent shortage as baby boomers retire. Keep your life flexible to benefit from it.
Talent shortage coming that will last for decades:
http://money.cnn.com/2006/02/21/news/international/jobs_manpower.reut/index.htm
Hey now! I live in Riverside. It’s not the OC but it’s not all ghetto either. In this market with outpriced renters, the old saying applys ‘beggars can’t be choosers. Where else can you find a home built in 1990, 2 story, 1800 sq.ft., huge yard for 220k? (well maybe 3 years ago but 400k now is still not bad).
“Where else can you find a home built in 1990, 2 story, 1800 sq.ft., huge yard for 220k? (well maybe 3 years ago but 400k now is still not bad).”
Las Vegas, Phoenix, or any other place with a similar QOL.
I do agree with you to a point…”beggars can’t be choosers” if they want to own, but they do have the choice of renting in a more desirable area. Personally, to me, the IE is the IE. You have some nicer parts like Rancho Cucamonga, Chino Hills, maybe Corona but you can’t change the weather, smog, or traffic. The traffic is so bad because most people don’t actually work there and residents are all coming and going at the same time creating gridlock on over-utilized freeways. It is like you said to a certain extent, an area of affordable housing whose growth is dependent on people who are outpriced in other markets (i.e. LA, OC). As soon as r/e cools off, most people will abandon the IE like they have in the past, and head back to the coastal areas.
I’m not trying to rip on you, because I understand not everyone wants to rent and can’t afford to buy in Beverly Hills (me included). It’s just at what point do you say owning isn’t worth it?
….and it will be 220K again….220K 3 years ago, 220K 3 years from now….I can’t wait!
O.T. but I like to see limousine liberal hypocrites get a taste of their own medicine:
“Oversize Homes Wear Out Their Welcome
Fed-Up Communities Limit Square Footage”
http://aolsvc.news.aol.com/business/article.adp?id=20060221074509990001&ncid=NWS00010000000001
Yes I know I’m making an assumption here that I can’t prove. But writing that Aspen is filled with limousine liberals is a safe bet. And, I can also make a safe bet that they favor government intervention on all other aspects of commerce, except this one.
BTW, I oppose megasized homes also. But, government has no right to legislate the size of homes. Especially with flimsy arguments that it causes excess traffic and supersized staffs (what, they oppose creating jobs?). Another one: There’s no more land (than restrict lot size), there’s no more roads (than do your real job and build some - besides, one supersized house will create less traffic than affordable apartments, which I assume she’d support).
“limousine liberals”?
WTF are you talking about?
Who do you think owns homes in Aspen? Auto assembly plant workers. You have to be rich to buy a home there, that’s where the limo comes in, as in owning a home in Aspen is conspicous consumption by the rich, just like a limo. As for liberal, the county went 68% to 30% for Bush, so it’s safe to say they aren’t conservatives. Therefore, they are rich liberals that support big government. Except in this case, when the government is telling them what to do.
As for being hypocrites: If they really cared for the less fortunate, they’d wouldn’t be obsessed with taxing others, they’d use their own money to help them, not use it to build giant homes in Aspen.
“Las Vegas, Phoenix, or any other place with a similar QOL.”
I was specifically talking about any other cities in Southern California.
Barstow?
Ah Barstow…home of the flying dirt!
The Tucson bubble is a micro-causim or bleed over bubble from what’s happening in the Phoenix area…after all it’s a farther drive for the California speculators (for those that actually want to see the properties they are speculating in).
I am considering cashing out and selling here in Ca dn moving to Tucson actually (my family moved there long time ago). I would be able to buy a home free and clear, pay my debt and still have money generating interest. Only thing is the job market sucks. I would end up working at the local Target. I really dont care about the loss of culture there, hell I live in Riverside. We will see what happens in Spring. If prices shoot up in CA, im out. If not I stay put.
You may have missed out if you were looking to maximize the transfer of your home wealth. If you had sold in mid-2004 and immediately moved to Tucson you would have scored big time. Over the last 18 months Tucson has shot up while SoCal has been basically stagnant. Ultimately both will deflate and your relative position will stay about the same. Also, carefully analyize your property tax situation. If you have owned your home for a long time in California, you may end up paying a lot more in prop taxes by moving due to prop. 13 protection that you are currently enjoying (never mind that if you just bought in the last few years).
“Barstow?”
You can prob find a POS shack in Barstow now for 200k. But you cant
compare it to Riverside. Like I said, its not the pretentious OC but it beats renting anyday ( not renting today but when I bought 3 years ago). My wife is very happy, loves the house. As far as commute, I found a job closer to home that pays 12% more than my old job in Irvine. I am the exceptionas most my neighbors make a scarifice and drive 2 hours each way to work.
Sounds like you are in a good situation there if you don’t have to commute a million miles to work each day. And you are getting paid more too…
I don’t know your financial situation but if you desire to be closer to your family in Tucson and can buy a house free and clear with some $$$ left over that might not be a bad plan. It’s always risky though when you don’t have a job lined up when you get there…but I’m sure you could land something. Hey, so you get an Asst. Mgr. job at Target that pays like 30k/yr that could help pay the bills. Just depends what you want to do I guess.
Good luck!
“There’s no clear explanation for the jump”
so says the idiot!
“Over the last 18 months Tucson has shot up while SoCal has been basically stagnant.”
SoCal has been Staganant? Maybe the last 3 months but 18? Run a quick query on zillow.com for any city in Socal and the graph will prove otherwise. Even with zillows innacuracy it will still be indicative of a rise. I know the party is over but I mght still be able to get out on time with some profit. I already found a home built in 2004 going for 200k in Tucson.
San Diego has been stagnant since summer/fall 2004. The rise in prices is limited to certain areas and there has been a “shift in market mix” — more people buying higher-priced/better homes.
I concur with “CA renter” and also with you in general. Sure you can get a house much cheaper in Tucson than in SoCal. You could have done that before, during, and after the bubble. I was only trying to point out that the Arizona bubble areas really took off AFTER the SoCal bubble stopped inflating. What you could have bought in Phoenix or Tucson in mid 2004 has gone up a minimum of 50% over the last 18 months, while most SoCal areas (actual specific homes & neighborhoods) have been basically stagnant on a year to year comparison basis since the fall of 2004. As “CA renter” points out, the median price may show a slight increase, but that’s due to move-up buyers. If I was in your shoes (I kind of am) and want to maximize this situation financially, I would sell my SoCal house now while prices are still good, sit out and rent for the next 12-18 months and then buy your Tucson home once the prices deflate. Depending on your family situation this may not be realistic…remember I’m ONLY considering the financial aspects of these scenarios.
I also just realized that you are in Riverside…the bubble effect there has trailed San Diego (people moving around SoCal for the next “affordable” area), so you are probably right. San Diego was basically flat the last 12-18 months but Riverside probably kept going up somewhat. SoCal has it’s own regions that have kept pace on a bit different time scale.
And another thing …. these Tucson folk sure are welcoming, with all the Open Houses they are having right now. I pass large numbers of these on my bike rides. I haven’t called in on any yet. Maybe they are the best places in town for ground coffee and freshly baked cookies?
Reporting by rog > > in T*U*C*S*O*N > > so that Y*O*U don’t have to be!*
*Tucson is already big enough. Please don’t come here. Yes, the job market probably sucks. And you’ll hate the heat. Honestly, you will.
Comment by tj & the bear
2006-02-21 12:32:42
Vegas Viewer, spacepest, etc… anyone tracking Las Vegas’ inventory??
If you mean by looking up numbers on an MLS type service, no. (I stopped doing that a year ago, since I do not plan on buying or selling a house out here anytime soon. I’ve been keeping track of areas in So Cal instead because me and hubby might need to relocate there for future job training) But if you mean by seeing the number of houses “for sale” signs I see by simply driving around or walking around the neighborhood increasing like crazy the past year or so, yes. Plus even the big newspapers out here are starting to finally, grudgeingly admit that the housing market is slowing down in sales, something a few local real estate agents in my area have confirmed. We visit with the neighbors who have had thier homes put up for sales/open houses, to find out nothing on our block has sold within the past 8 months.
Comment by OutofSanDiego
2006-02-21 13:57:18
Nope…Phoenix will be clearly end up being ground zero (this is fun, too bad we can’t bet on it). I agree that the bubble is popping in Vegas, but it won’t be anywhere near as drastic and pronounced as the Phoenix area. There are several factors, but one is that I think there are more people who actually ended up actually moving to Vegas (i.e. actually living there). The new enormous resort casinos employ thousands of people each and along with them are associated support infrastructure jobs (teachers in the schools, administrators, food product distribution, supermarkets, etc.). What I have witnessed in Phoenix is an exponential number of speculators (from California and yep…from Vegas) who “missed out” on making money in the Vegas and SoCal bubbles and all converged on Phoenix. I don’t know of any of them that are moving there to live (save a few retirees). The price runup in Phoenix (percentage wise) has been even crazier than SoCal or Vegas when you look at the amount of time it took. I know lots of areas (Goodyear, Mesa, Peoria, etc.) that have doubled in the last 18 months. It think it will crash as fast as it went up. Even a low paying job base, as long as there are available jobs, lays a better foundation than homes built purely for speculation with no increasing in area employment.
Bingo! While both areas will most likely see a down turn, Phoenix is probably going to get hit the worst. Las Vegas simply has a much larger employment base, but I don’t even expect that to save the run up home prices out here. They will go down in Vegas i’m sure, but not at the rock bottom prices that Phoenix will. Vegas is a booming town, with newcomers constantly moving out here for new jobs. In fact, one of things that I think has been throttling the growth in this town the past couple of years has been the run up in houses itself…alot less people stopped coming out here because houses were no longer cheap, which was one of the main attractions for a full time worker to live in Vegas. Right now Vegas is experiencing a shortage of workers like teachers, police officers, firemen, and nurses because many are looking at their wages vs. cost of homeowning and are simply saying, “Nope. Not if I can’t afford a house out there.”
I keep tabs on a couple of subdivisions in the north and northwest part of Tucson. Today I checked on one, of the approx. 650 newly built homes 51 are for sale and 11 are for rent. 3 are for sell by the developer. That’s 10% of the homes in this development! This does not include the empty homes just waiting to appreciate.
These go for $250K to $400K, with a great veiw of the county dump and built on an old river bed. Unlike rog56, I encourage all the Riverside people to come over and buy these wonderful POS homes. We need someone with high incomes to keep our economy strong. Everyone around here works for walmart!
I said last week that Phoenix will be ground zero. I truly believe my hometown is doomed. I just hope it the housing market doesnt bring the whole economy with it.
It is said that 33% of the states economy is generated in the construction and housing market. I think that may be a bit conservative.
Does anyone have figures for other states?
Let’s look at a possible long term positive effect (after the initial pain). First I agree with you that Phoenix is ground zero. Now, say all the speculators lose their asses, real estate drops, and housing becomes cheap (again). Maybe that will attact additional companies and industry that will relocate from places like California, etc. so their workers can afford to buy homes (it’s something like 7% affordability in CA right now). I know the houses won’t sit empty, someone will buy them and move in. Maybe all the folks fleeing the Florida hurricanes who are looking for another hot place to spend the summer (without the humidity). Maybe if homes and condos got cheap enough, all the jobs that are currently outsourced to places like India (Dell call centers, etc.) could be kept in the U.S. (Phoenix) ($12 hour, dual income should be able to afford a cheap home or condo if prices crashed). Does this make any sense?
Rog56 and Rocketrob, You think Tucson is bad? I’m in Tampa and things are REALLY bad here. You can get a $140,000 wood shack for $280,000! Cool, huh? That with the alligators, hurricanes, state run housing insurance, shark attacks and one billion percent humidity. I’ll take 112 degrees and africanized bees anyday. Although I’m sure by now Mt. Lemmon has been overrun by import boomcars, my Ducati longs for the Catalina Hwy. twisties up to Summerhaven. See you this summer. Great blog BTW. I miss Tucson.