Tucson MLS Statistics June 2010
July 20, 2010
Post Tags: Tucson MLS Statisctics June 2010
The June Tucson MLS statistics report seems to be back on track with good data. I don’t know what happened in May but I’m glad to see the numbers making some sense for June. There were some surprises and some interesting things in the data. Let’s get to it.
Tucson MLS May 2010 – June 2010
June 2010
- Avg. Sale Pr $189,791
- Total Units Sold 1195
- Median Sale Pr $150,000
- Pending Contracts 1,145
- Active Listings 6,852
- New Listings 1,505
May 2010
- Avg. Sale Pr $185,773
- Total Units Sold 1274
- Median Sale Pr $150,000
- Pending Contracts 963
- Active Listings 6,742
- New Listings 1,463
First, the data for the May statistics above comes directly from the Tucson MLS system. I pulled it just now along with the June data.
The Average Sale Price increased in June while the Median Sale Price remained the same. The middle of the market isn’t changing much. Even today for July it is just a little higher at $151,500. But that will change before the month closes.
Pending Sales was one of those good surprises. All the rage in the media is that the “Tax Credits” were driving the real estate market both nationally and in Tucson. Those credits expired on April 30, 2010. There was a significant drop in Pending contracts from April to May. But seeing more than 1000 pending contracts in June coming into July was a surprise; a pleasant one for a change.
Active Listings went up slightly in June. I’ll leak a little stat here from tomorrow’s post on Absorption rates. The inventory increased but the absorption rate for June turned out to be 5.85 months of inventory.
The Tucson Real Estate market is doing better than many places in Arizona. It isn’t anything to get excited about (Oh, really). Investors and those with cash are loving this market. You could stamp “Bargain” all over it. Cash is king in this market and there are quite a few transactions each month recorded as cash.
For sellers, it is a mixed bag. It really depends on when you bought and why you are selling.
For buyers, if you need to finance a big chunk of the purchase price, you will find credit tight.
It is a challenging time.
Ah, yes, and I forgot to post the link to the entire report here: Tucson MLS June 2010 Statistics
July 20th, 2010 at 2:15 pm
Dave, you read these numbers as good news. I’m not as positive as you. I went to TARMLS.com and did a search today. By choosing ‘Residential,’ I show 9,150 listings. As a public user, I can’t eliminate Contingent and Active CAPA from the listings, but even if I add your two numbers (active listings plus pending contracts), 9150′s a much bigger number. Can you explain the large discrepency? I’ve seen similar quotes from other realtors; it looks like the numbers are being juggled to give the appearance of a normal housing market. It’s not. Tucson is definitely a buyer’s market.
I haven’t been following your website very long, so I don’t know how much more the July numbers will increase, but if the current 365 is accurate and we’re 2/3s through the month, it appears that sales will be halved in July compared to June. Since July is traditionally the peak month for Tucson, I would consider this to be very bad for housing.
I also see that ~1/2 of sales are either REOs or short sales, indicating that there’s a lot of inventory that needs to be cleared.
That brings me to the average sales price. I read this as the banks are starting to foreclose and sell higher end real estate. This would match trends across the country. And it also matches data on comps that I pulled up for Tucson; it appears that Tucson’s real estate has fallen a fairly constant 1%/month for several years.
I think that the months of inventory has been artificially lowered by the homeowner tax credit and the banks withholding quite a bit of shadow inventory. This appears to be verified by the Census bureau’s Tucson statistics showing a sharp rise in vacant homes in the first quarter 2010 and the increase in foreclosures in Pima County.
I think that you’re looking at remnants of the homebuyer tax credit and using that as your basis for optimism. I’d like to give the data a couple more months before trying to put a positive spin on it. If units sold is less than 500 units in a month, you have to go all the way back to Feb 1992 to find comparable numbers. July appears to be on track to be right around 500 and I would expect August to be lower than July. Numbers like that will drive up months of inventory significantly.
July 20th, 2010 at 3:19 pm
iflyjetzzz,
There’s a lot here. I’ll try and answer each topic in order.
1. “Dave, you read these numbers as good news.”
All I said that was good was the data for June’s report. There hasn’t been any “good news” in real estate in a couple of years. But the numbers could be worse.
2. The number of residential searches returned being in the 9150′s.
There is a big difference between the listings in the Tucson MLS and the Listings in Tucson. The TAR will have listings from all over Southern Arizona, Other states and Mexico. The Tucson MLS Statistics report only pulls the 13 areas considered by the MLS board to be Tucson. Actually is should only be 9 areas. Included in the 13 are Sahuarita, Green Valley and some outlying county areas. There are 717 listings from around the state and other states in those 9150. There are quite a few that are also 237 new construction listings. There are 1466 Active Capa and contingent. So the number in the report is just those Tucson area homes and listings. I think this explains the discrepancy in numbers. For months I had paragraph included in this report about the limited areas being reports. I dropped it about a year ago. I might add a link to a page about what criteria are used by the associations for the report.
3. The July Numbers today 365
The bulk of the numbers usually come in the last 1o days of the month with the bulk coming in the last week and the first 5 days of the next month. Most closings are in the last week of the month. This is done so the first mortgage payment isn’t due until the second month following closing.
The closings that don’t matter are the REO and Short Sales which have been running between 30 and 45% of the monthly total closings this year in Tucson.
I’m going to guess between 700 and 800 for the final total and close to 50% will be REO and Short Sales. Summer in Tucson is not when most buyers are in the Tucson market. Investors and bargain hunters are hear right now and they are picking up some good properties.
4. Tucson Real Estate Values and Average Sale Price
They have fallen consistently. I would guess your estimate is about right. As to the higher average sale price it does have some to do with higher end properties but that’s not the primary reason for the higher sale prices. The primary reason is the banks woke up and got one message very clearly. Rather than go into it again here I’ll refer you to these two posts:
Tucson Shadow Inventory – Competing with your own Comps
Tucson Shadow Inventory
5. Vacant Homes in Tucson
There are quite a few vacant homes in Tucson. There have always been a high number of vacant homes in Tucson. Why? Because many of the homes in Tucson are “Second” homes. About 25% of the homes in Tucson are “Winter visitor” homes. Those home owners won’t be on the census counts for Tucson. They will be counted “back home”. It is an anomaly from the typical city.
6. “I think that you’re looking at remnants of the homebuyer tax credit and using that as your basis for optimism.”
I don’t remember appearing “optimistic”, if there is any optimism it is in the Pending Contracts which are over 1000 in June. These are homes that “Went” pending in June. These purchases are not qualifying for any tax credit. They are purchases based on price, (which ultimately is the only thing purchases are based on). The Pending are the crystal ball to what is going to happen. They were below a 1000 in May, which translates into a lower number of sold units in July.
One thing regular readers here know. I never “spin” the data. I try to analyze the data and look for trends. But I’m not interested in “Selling Real Estate”.
I’ll have to put you in the Way Back Machine to Aug. 7, 2007 for this post on our Business philosophy and why we are working in the Tucson real estate market.
Tucson AZ Real Estate Realtors
iflyjetzzz, (if that’s your real name) I appreciate your thoughtful and well written comment. Writing about the Tucson real estate market hasn’t been an easy assignment for quite some time now. But we will continue to try and provide some insights into what is going on here in Tucson.
Stop by often, your comments and questions are always welcome. Someday we should have a cup of coffee (or in this heat a beer), if you are in the area.
Dave
July 21st, 2010 at 9:17 am
Dave,
Thanks for the well written response; it was very informative. I’ve been visiting this website for the last couple of weeks because we’ll be moving to Tucson in September and I’ve been very impressed with your writings.
Unfortunately, I haven’t made it through all of your previous writings. The links you provided were great – your pieces on shadow inventory correspond with what I’ve seen here in San Antonio in that once a house is foreclosed, the bank will restore the house to saleable condition prior to putting it on the market. In our case, the house that we rented was foreclosed. It was in near perfect condition when we moved out and I could tell from the photos (once it was listed) that nothing had been done to prep the house for sale, as the carpets still had furniture outlines on them … steam cleaning the carpets would have been the one item I would have done in prep for sale. It took ~2 months from the time we moved out until it was listed for sale. That matches timelines for several properties that I’ve looked at in Tucson. I looked at the foreclosure date and then looked at the listing date and noticed that many of them were two months later. If a home has been trashed, as I saw from a house down the block from us, it took ~6 months for the bank to put it on the market.
I have noticed that the banks have done a much better job over time of managing their REO inventories. When the housing crisis started, I noticed that banks were much more hesitant to close on more expensive properties across the country; that price point was market specific. For instance, I saw several properties in the $500K range in Orlando that were 24+ months in arrears, yet no bankruptcy was declared and the house had not yet been foreclosed on. The banks have been more aggessive in the last 9 months or so in the upper price ranges.
I’ll have to look at tarmls a bit closer; it appeared to cover only the Tucson market. But that is likely due to the filters that I have been using.
Thanks for the clarification on most closings occurring near the end of the month. I wasn’t sure if the running tally that you posted would translate uniformly across the month. I assume from your response that the number should double in the last third of the month; and your rationale for that is logical.
I used data from June’s TAR monthly stats (Link: http://www.tucsonrealtors.org/tar-v2/stat_june.pdf ) to look at historic peak and trough months in sales. I had expected to see an inverse pattern compared to most cities due to the large number of retirees moving to Tucson. The data surprised me in that it appeared to be your typical pattern of peak sales in the summer. Looking at total unit sales on page 3, it appears that over the last 10 years, May/June have been the peak months followed by April/July.
As far as vacant homes in Tucson, here’s a census bureau link: http://www.census.gov/hhes/www/housing/hvs/rates/index.html
If you go to table 5, you’ll see a fairly sizable spike in 1Q2010 vacancy rates compared to the previous four quarters. Those numbers appear to be independent of snowbird migration patterns. Perhaps there were less snowbirds traveling to Tucson last winter, choosing instead to list their homes for sale? I don’t know the reason for the big jump.
Conversely, table 4′s rental vacancy rates showed improvement.
Thanks for the explanation on the pending sales number. I had assumed that many of the pending sales were still carryovers from April. I did not know that pending sales only included contracts signed in that month.
I apologize if I mischaracterized your original post as being optimistic. I’ve been going through a lot of Tucson data in trying to decide whether to buy or rent. I initially leaned toward buying but am now thinking that renting would be our best option when we arrive in September. That’s why I’ll be watching the July/August statistics very closely.
Again, you’ve got a great website here. It’s a very valuable source of information for us in making a decision on whether to buy or rent.
July 22nd, 2010 at 5:39 am
I went ahead and looked at a bunch of zip codes outside of Tucson in the tarmls.com database. You’re correct that there are quite a few listings in that database that are excessively far from Tucson to be included in any Tucson numbers.