Things have changed.  Inventories continue to shrink in most Areas of Tucson. January 2012 is wrapping up and the January statics will be released in a week (or there about). So I’ll publish December for historical data.

Tucson Absorption Rates December 2011 is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

Here is a way for Banks to make more money on their inventory of Bank Owned Homes (REO) and Shadow Inventory.

Banks own homes that are not on the market.  “Shadow Inventory” has been said to be a HUGE issue.

Here is how Banks can make more money on REOs

Hire a data analyst, to compare available inventory in subdivisions against the Banks own Shadow Inventory.  If the analysis shows that a particular sub-division is low on available inventory that matches homes the Bank has in inventory, then put one or more of their homes in that area on the market.

Example

Subdivision A is located near the U of A.  There are no three bedroom homes on the market in that neighborhood.  The banks have three homes sitting in Shadow Inventory in that subdivision.  Put one or two of those homes on the market.

Since the bank has the only home available with 3 bedrooms in that subdivision they have an opportunity to get a better price.  (The law of supply and demand).  When they sell that property for a higher price they have just increased the Comp sale price for other homes they have for that subdivision.

It is pretty simple to do, doesn’t cost much once the model is setup for comparisons, and it can increase the banks bottom dollar while getting rid of some of their inventory.

This is how any agent who is about to take a listing finds the market price.

1. They find Sold comps for the neighborhood
2. They find out how many homes like the one they are listing are on the market and their list price
3. They now know where to competitively list the property.

That’s it.  Not an expensive process.  Quick to implement and increase the sale price.

However, I doubt the banks will do it.  Why?  It makes too much sense.

Tucson Bank Owned Real Estate – Hey Banks Are You Listening? is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

This goes against the conventional thinking that any real estate market is either a buyers or sellers market.  Maybe that was true at one time (but I doubt it).  Now we have a time in history where the interest rate on a 30 year mortgage is historically low.  Sale prices are as low has they have  been in over a decade which would tend toward a buyer’s advantage.  But one crucial piece of the puzzle is missing for a true buyer’s market; high inventory.

Tucson’s Low Residential Inventory

Have you even been in a store (Like Ross) the week after Christmas?  The shelves look like they are 80% empty.  Very little to choose from compared to the weeks leading up to Christmas.  Tucson’s available housing market looks a lot like one of those stores.

Not much to pick from

Currently in Tucson we have a very low inventory of available properties.  Even with the high number of foreclosures we don’t see that many properties on the market.  There are 5,587 active residential listings in the Tucson MLS system right now on Jan. 2, 2012.  Considering this includes properties in Vail, Oro Valley, Marana, Saharita, Green Valley and scatterings around Southwestern Arizona and a few in Mexico, that’s not a lot of inventory to choose from.

False Perceptions Can Lead to Poor Decisions

The general perception among many seems to be it is a buyer’s market in Tucson.  Make an offer that’s within 20 or 30 thousand of asking price then meet the seller somewhere in the middle and you can walk away with the property.  The reality: many are taking so much time deciding, they find their first, second, and third choices are going under contract while they “think about it”.

Think about it

Who’s swooping in and buying these properties while they “think about it”?  Buyer’s that have been in the market who have had their perception altered by the reality they have lost two or three homes which were their first choices.  Now realizing when they see something they like they better make an offer, not a low ball offer, a fair and reasonable offer.

Tucson Jan 2012 – NOT a Buyer’s Market is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

Looking Back Won't Help

Presents are being wrapped, gifts bought and 2011 is wrapping up as well.  It has been an “interesting” year for the Tucson real estate market.  We continue to see the trends set early this year still in effect.

• 50% or more of transactions this year in residential real estate are either bank owned or short sales.
• Approx. 30% of all transactions are CASH transactions.

The Average and Median sale prices are down over last year but that is to be expected with half of the homes sold financially distressed properties.

Some are expecting hoping 2012 will be a better year to make a real estate transaction in Tucson.

I know there are people that would like to sell their homes and move up to a bigger home, likewise there are some that want to downsize.  Both directions see financing a purchase at all time interest rate lows.  Both directions see purchase prices the best they have been (probably since 2000).

But they also realize the sale price of their existing home isn’t going to bring in as much as it would have  a few years ago.  If they want to stay in the Tucson area, then it is a balancing act involving doing the numbers to see where they come out financially.  If they made their purchase anywhere from 2003 to present it could be very close.  If they purchased before 2003 they could have enough equity in their property to make a good move with minimal financial pain.

For some they will even come out ahead in the process depending on their circumstances.

Don’t Squander The Moment

Wish pricing has been around for a long time, and it bites a lot of sellers.  Every one wants to get the most out of their sale and pay the least for their next purchase.  It always depends on which side of the transaction we find ourselves.

Unfortunately, too many sellers start out Wish pricing their homes.  They waste that precious first two weeks on the market.  The best time to make an impression is the first impression with agents and buyers when your listing pops up in the MLS and is sent out to all the potential buyers looking for a home just like your home.

Wish Pricing Your Home

Too many sellers start the process unaware of “The Moment” dynamic.  They approach pricing with the “Let’s try it at . . . we can always come down”  Yes, you can always come down.  And if you squander the moment, you will have to come down.  The sad part is you will probably come down to a sale price less than you could have gotten in “The Moment”.

When you property pops up for the first time most agents know the market well enough to know if you are wish pricing your home.  And, most buyers who have been looking for any amount of time also have a pretty good idea of where a home matching their criteria should be priced.

If it is over priced for the market, both agents and potential buyers will “pass”.  You don’t want this bad taste in the mouth to be the first impression.

Realistically Market Price Your Home

Work with your agent to assess the true market value of  your home.  Find the sweet point in the process.

Sweet spot = where you can accept the price and it is not wish pricing.

Begin there and you have a much better chance of getting an offer during “The Moment”.

List Price NOT Wish Price Your Home is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

Feeling Naked and Exposed

All of us who are “home owners” cringe when we hear in the media every month how our homes have “lost value”.  Arizona in the statistics is reported as having lost 12% value since last year.

The reality is, the value of our home only matters in three instances.

1. When we buy it
2. When we sell it
3. When we pay taxes on it

The rest of the time, the “value” of our home is relative.

Disturbing Thoughts Affect Attitudes About our Homes

The focus on real estate in Tucson and most other communities in the country has been on the foreclosures and short sales that dominate the market.  The discussion permeates the media whether that be newspapers, or television.  We are bombarded with the news of:

• Lost Value
• Increased Foreclosures
• Bank Practices leading to the crisis
• People being thrown out of their homes
• When will we hit bottom
• Failed government programs to help homeowners
• etc.

But, as stated above, unless we who are homeowners have to sell the value of your home isn’t in what we can get for it if we put it on the market, the value is in the quality of life it affords and “a place to store our stuff”.

How About Your Car

Most of us are upside down and underwater on our cars the moment we take the keys and drive off.  But does it bother you?  Usually, NOT, why because we have a car, we drive it around town, we wash and wax it, we are proud of our car.  Does it matter it isn’t worth what we paid for it?

How we perceive our home and car is different.  But the reality is they are very similar, with a bigger price tag.

Here is the big difference.  Your home can easily appreciate in value over time.  It is very rare for a car to do the same.

Many homeowners who bought their homes before the huge run up in prices can still sell, even today, and not be loosing money in the process.  They won’t make as much as they could of a few years ago, but they couldn’t buy as much home in that market as they can today.

Feeling Upside Down and Underwater is for most of us just that, a feeling. 

We’ve watched the perceived value of our own home lose over $100,000 in “value” in the past three years.  How do we feel about it.  Same as anyone, we don’t like it, but we have a nice home.  We continue to make substantial improvements (we added tile to the last two carpeted rooms in the house and put in a back yard and garden).  Our home is now the nicest place we have ever lived. 

Take a fresh look at your home.  The worst thing we can do is get discouraged from the feeling and stop doing routine maintenance.  The best thing we can do is take advantage of the lower prices at places like Home Depot and Lowes (Not an endorsement just where I shop a lot) and add value to our homes at prices about half of what they were a few  years ago. 

Feeling Upside Down and Underwater is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

Those words are tossed around as if this were the plague descending.

Like this title from an October 28 article:
Over 2,000 distressed homes lurking in Tucson’s shadow inventory

See how ominous it sounds to have these homes lurking.

“For the second consecutive month, lenders and banks owned more than 2,000 homes in the Tucson region that have not yet been listed for sale. These pre-market real estate owned (REO) homes, referred to as “shadow inventory,” are up 35 percent since January.”

This is a significant number of homes. But is it a tsunami that will suddenly overwhelm the Tucson real estate market? NO!

Shadow Inventory in Tucson Nothing to Fear

Here are a couple of reasons why we don’t need to fear the Shadow Inventory.

First, Our current number of active listings for October 2011 in Tucson was 5,290 properties. If we added 2,000 to that total we would have 7,290. Looking back at October of 2010 we had 7,412 active listings. Just last year we had 2,000 more than we have right now. Does it matter that these 2,000 would be all REO homes? Not at all. The Banks aren’t dumping, dumps on the market like they did a few years ago. They finally realized they needed to fix up these foreclosures. If they didn’t they would find getting comps for a future sale difficult because those “as is” sales are included in the appraisal for comparable properties.

So we don’t have dumps being dumped on the market and the Banks have learned that you drip properties onto the market, you don’t dump them.

Going back even further we find that in 2007 we had an active inventory of more than 10,000 properties. There is room for more active listings in the market.

Shadow Inventory Drip on the Market

Second, as already mentioned, the Banks aren’t putting homes on the market that have the wiring ripped out and the plumbing fixtures all broken and drains filled with concrete. (There are still a few, but they are now the exception) Around 50% of monthly contracts are either REO or Short Sales we know a significant part of the inventory is already Bank owned. Home prices have become more affordable, but is there anything to “dread” in the shadow inventory? Again, NO!

Two Thousand New Listings in a month

Would 2,000 new listings sink the Tucson real estate market? Looking back to 2010. January, February, March and April all had over 2,000 new listings EACH MONTH! Remember? Of course you don’t remember, was it cataclysmic. Nope, business as usual. Even in January of 2011 we almost had 2,000 new listings. This is not a big deal either.

Does the shadow inventory exist? Sure it does.

But is there a reason to be afraid of the shadow . . .

Shining Light on Tucson’s Shadow Inventory is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

Tucson a Beautiful City

This according to Yahoo Real Estate and I believe it.  I’d actually be shocked if it weren’t the emptiest city in the country.

Statistics are a mixed bag of information.

I’ll get right to it and not drag this out.  Here are a couple other little statistical tidbits which might weigh on this designation.

• Tucson probably has more second home buyers than any other city in the country.
• Tucson has a very high number of Snowbirds that come here only in the winter.
• Tucson has a lot of homes that sit empty for 6 months out of the year.

Think this is hint enough to why Tucson would be America’s Emptiest City.

The emptiest city in the U.S. is the second-largest city in Arizona: Tucson. With rental vacancies at 15.9 percent, the city is seventh most vacant among major cities, while the 6.8 percent homeowner vacancy rate is the highest in the country as of the second quarter of 2011

Oh, second quarter of 2011; the end of the snowbird season and the beginning of Tucson’s Long Hot Summer. (We had 69 days over 100 degrees this year)

We’ve Got Room – Come On Down

Tucson – Americas Emptiest City is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

But that’s how a couple of listings show up in the MLS system.

Looking for Tucson Horse Property Listings

Here’s the story:

I was setting a few custom Horse Property searches this weekend.  Just for the heck of it I checked the box for Horse property and Town home.  Up popped two properties.  I had to take a look at these listings with images of a patio where the horse sticks it’s head through the sliding glass door or over the wall to peak into the neighbors back yard and pool.

Take a look for yourself.

I didn’t save that custom search. I don’t think anyone will really be wanting a town home with horse facilities.

But it certainly made for an entertaining few minutes. It also served as a reminder that the data is only as good as the one who input it.

That would be why the saying “Information Deemed Reliable but not Guaranteed” is at the bottom of the Tucson MLS site.

Yeah, it’s at the bottom of mine as well
Hey, sounded like a good idea to me.

Tucson Horse Property Townhomes – Really is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

I thought I’d take a look at the “Sweet Spot”; then see how big that spot is for some potential buyers.

The Sweet spot is the $100,000 to $120,000 homes.  Looking back over this year we find most months, the majority of the homes sold fell in this range.

September’s graph shows us how many homes were sold in this range.

The Sweet Spot in Tucson

Today is October 16, 2011; two weeks into October. It is a Sunday afternoon; not many new listings being added (if any) on a Sunday afternoon.

This makes it a good time to analyze the data and not have it change in the process.

Our purpose: To see how many homes matching a typical Tucson home buyer criteria there are on the market.

The expected result:  There are far fewer homes than most buyers expect once they input their criteria and begin their active search for a home.

The starting point:

Active Tucson SFR Listings between 100 – 120K
Total: 296

Seems like there is a lot to choose from; now let’s start narrowing our search for homes.

Air conditioning: Total  229
3 Bedrooms: Total  190
2 Baths: Total 188
2 Car Garage: Total 134
Year Built: 1990 or newer: Total 111

Location: North of 22nd Street: Total 5

Here is the map showing the location of the 5 listings.

As of Oct. 16, 2011

This example wasn’t setup to look so drastic. It is what happens all the time with many home searches. There appears to be a lot of homes available; then the criteria for what a buyer is looking for is applied and most of the time they are amazed at how few homes matching what they are looking for actually exist in the active inventory.

But Wait There’s More

I thought it would be interesting to make this more than just a snapshot.  Therefore, I created a page that pulls the current active listings meeting the criteria in this post.

This mean you can see the current:
Active Tucson Listings between 100-120K North of 22nd Street

Conclusion: It might be harder to find what you want to find when you are ready to find it. Therefore, don’t assume there is a lot to pick from when you are ready to buy. Start your search early, because there really might not be as many available options as you thought.

Finding A Tucson Home in the Sweet Spot is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.

This past weekend I was busy migrating this and about a dozen other sites to a new hosting package and server.

This process involves moving all the files, images, plugins, etc. that make up this site from one hosting package to another.  Why would I move it?  The need for speed was one of the primary reasons.

About a month ago I began taking steps to decease the page load time of the site.  It was loading fine from a standard cable or DSL connection.  But for those on slower connections services like dial-up or a slow WIFI connection the site wasn’t loading very fast; something my son had mentioned on numerous occasions in the past.

Slow Work Increasing Speed

It took about 4 days of tedious work optimizing images, compressing scripts, caching the content, feeding images from a cookieless domain and a few more geeky things I won’t go into.  It paid off.  The page load time of the site was decreased dramatically. (If you want to see how fast it is loading on your computer right click on the site and select “View Source or View Page Source” depending on your browser. Scroll all the way to the bottom and you should see in green something like this:

I wanted to keep tweaking and fine tuning the site to get it to load faster.  Then this weekend I noticed the site throttle button on our hosting cpanel and decided to see if it had been applied to us.

Site throttle is where a site or hosting package is using too much bandwidth at a single time and the server will slow the delivery of the content to balance out the server.  This is actually one of the reasons I like our hosting company Bluehost.  They won’t allow any one site on the server to hog all the bandwidth.  Well, it turns our we were hogging bandwidth to the point our site was throttled back for more an an hour in any 24hr time period. (Lot’s of visitors to our site searching for homes).

Seconds add up to Minutes, Hours

This didn’t amount to long periods of time.  It is measured in seconds, sometimes it would be up to 10 minutes in a single stretch, but that was rare.  However, finding that our content was being delivered slower because of the number of visitors to the site lead me to the decision to add another hosting account, get a dedicated IP address for the site and migrate the most important sites I have to that new hosting package.

I moved half a dozen of the smaller sites on Sunday.  There was a noticeable speed increase as each one came up on the new hosting.  I waited till after 11:00 pm to do the migration of this site Sunday night.  I didn’t want to be kicking anyone off as the switch took place.  It can take up to 30 minutes for a change of IP address and server to populate around the globe.  Well, long story short, at 12:30 am the site wasn’t coming up and I moved it back to the original server and called it a night.

Fresh Eyes Make a Difference

Monday morning with a fresh set of eyes, I found the issues, changed two settings and migrated the the domain name again.  If you got a Server 500 error this morning, it was during the time the site was in the process of having it’s DNS record and IP address updated on the web around the world.

The traffic to this site continues to increase and that is a good thing.  But the more traffic to the site the more bandwidth it uses. Therefore, we will continue to do everything we can to make the site quick to load with the content about Tucson and the Tucson real estate market you want.

If there is anything you would like to see or information you can’t get about Tucson or Tucson Real Estate; leave a message on contact us page or leave a comment on this post.

Tucson Real Estate has a New Home is a post Scrapped and Stolen from: Tucson Real Estate if you are not reading this in your Reader.