Tucson Real Estate

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”.

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.