Tucson Absorption Rate November 2009 – 6.08
December 22, 2009
Post Tags: Tucson Absorption Rates November 2009
We are closing in on the end of 2009. Less than two weeks remain for transactions to be completed for the year. We are holding our own at 6 months inventory. Little did anyone believe we would be here by the end of the year. We actually got here quicker than I thought we would. But here we are.
End of Year in Tucson Real Estate
December can be a strange month for Tucson Real Estate. Some years it seems the collective mindset is to “take the month off” and spend time on other pursuits. Then for no explainable reason the collective will suddenly decide to buy a home and close before the end of the year. I’m guessing we are somewhere between those two.
The Tax credit for first time home buyers has been extended, this buys them more time and they are taking it. There has been a noticeable drop in first time home buyer activity in the market. Two possible reasons come to mind:
- They have more time and figure prices will come down a little more in the first couple of months. They have till April 30, 2010 to be under contract.
- The inventory of homes that are in the price range most first time home buyers can afford has been depleted. They need to wait to see if more homes become available which they can afford.
The mortgage interest rates have started the climb that has been predicted for several months. The sub 5% without points may possibly be gone for our lifetime.
Absorptions Rates Vary Greatly by Area
Check the area in which you live. The absorption rate really does vary depending on location.
The East and Central were down as low as 4 months inventory a couple of months ago. Now we see those areas back up to 6 + months. On the other hand we see the Northwest (which is one of the largest areas) gradually decrease their inventory and get into the 6 month range.
Even with all the talk of the “Next Wave” of foreclosures and short sales I don’t think we are going to see inventories return to the double digits in this next year. It is going to be interesting to see what the dynamics of the economy and the real estate market bring us in the new year.
