Tucson Real Estate HIGHEST AVERAGE SALE PRICE IN HISTORY!
July 17, 2007
Post Tags: Tucson Real Estate Market , Tucson-Average-Sale-Price , Tucson-Real-Estate-Trends
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Extra! Extra! Read all about it. Tucson records the HIGHEST Average Sale Price in History. New Average Sale Price record is $298,477.
This doesn’t just beat the old record it shatters it. by more than $16,000. The old record was set in March of 2006 at $282,439.
Median Sale Price HIGHEST in Recorded History $229,000
In February of 2006 the Median Sale price set the record at $227,000. This record was broken buy $2,000 more. Maybe not a shattered record or maybe it is. . .
June a Record Breaking Month for Tucson Real Estate Market
It is a lot of fun to create great headlines. It is especially fun when they are true.
Average Sale Price by Area
I’ve read a couple of places suggesting this new record is due to some million dollar places selling in the Catalina Foothills and skewing the numbers. I thought it would be interesting to test this theory by actually comparing June of 2006 with June of 2007 to see if a few million dollar properties are making the difference or is the Record Average Sale Price being supported by a broad base.
|
Area |
June 06 |
June 07 |
Diff. |
| N | $415,283 | $567,074 | + $151,791 |
| NE | $427,998 | $439,784 | + $11,786 |
| NW | $317,803 | $347,165 | + $29,362 |
| XNW | $161,449 | $161,407 | - $42 |
| C | $232,983 | $229,092 | - $3,891 |
| E | $221,243 | $228,444 | + $7,201 |
| S | $165,154 | $175,853 | + $10,699 |
| SE | $232,526 | $268,598 | + $36,072 |
| SW | $194,810 | $204,490 | + $9,680 |
| XSW | $214,075 | $200,840 | - $13,235 |
| XS | $279,137 | $289,475 | + $10,338 |
| W | $237,650 | $288,225 | + $50,575 |
| XW | $154,825 | $146,506 | -$8,319 |
The North shows the greatest increase. There are a good many million dollar homes in the North and it does look like they have contributed to the increase in the Record Average Sale Price. The Tucson Luxury Home market has seen a steady increase in sales as stated on other posts, the Luxury Home Market is often tied to the Stock Market and we all know there have been record highs in the stock market this year.
There are a few areas around Tucson that have seen a decline in their average sale price.
However, it appears to be more than just a few million dollar homes sold in the North influencing this figure. A much broader base of areas around Tucson are showing healthy increases over last year. Indicating the Tucson Area as a whole has seen increases in the Average Sale Price.
It sure doesn’t look like a “Blood bath” or the cause of “The Next Great Depression”.
July 19th, 2007 at 2:35 pm
Hi Dave!
It must be different here…lol.
Here is a good headline for you:
“Tucson’s housing booms while country implodes!!!!!!”
The Tucson Association of Realtors® recipe:
1. Exclude a bunch of areas areas to bring overall numbers down which brings avg. price up
2. Don’t report De-listings, New Construction, or Incentives
3. Repeat
4. Profit $$$$$
July 19th, 2007 at 3:52 pm
Hi bobby joe,
I was actually thinking of you when I wrote those headlines. Just trying to have some fun with it since we all know that value of headlines.
1. I agree with limiting the reporting figures to Tucson. I don’t think homes listed in other counties and cities as far away as Sierra Vista and Mexico should be included in our local figures.
2. I don’t know why the stopped reporting New Construction. I did notice a large disparity between their numbers and John Storbeck’s. I’m going to guess that not all new construction is in the MLS as a result those numbers weren’t providing a very complete picture of NC in Tucson
3. On delists, those are really hard to track. Maybe they are only off the market for a couple of days or a week. Maybe they were people just throwing it out there and seeing what they could get.
4. Incentives aren’t even entered into MLS in anyway that I know so that is something untrackable.
A better rhyme might be
“Tucson’s housing booms while country implodes in doom!!!!!”
Thanks for stopping by, it will be interesting to see what happens the rest of this year.
July 19th, 2007 at 8:55 pm
I’ve been reading a lot of real estate info and about any possible blog
lately. I’ve seen the name of John Storbeck mentioned many times. Is there any place online where one can see his statistics?
July 19th, 2007 at 11:28 pm
Concerned,
As far as I know John is often quoted in the Arizona Daily Star, his figures are not public he has a newsletter that you subscribe to in order to get his reports.
July 20th, 2007 at 8:10 am
Thank you, Dave. Could you please tell me (here or in an e-mail) how to subscribe to John Storbeck’s newsletter. From what I’ve read and based on my own observations, it appears that his numbers may be more realistic. Generally I think it’s a very good idea TARMLS stopped reporting on irrelevant areas, but the timing of it looks suspicious… Same goes for the removal of new construction.
July 20th, 2007 at 10:42 am
Concerned, I don’t know how to subscribe to John’s newsletter. I’ll do some checking.
As to the MLS Limiting the areas, the way they are doing the reporting makes the numbers worse not better. I think some are thinking they did this to make the numbers look better. The result is the exact opposite in most categories. The only one that appears to be better is active listings. The opposite is true of number of sales it is limited to just Tucson now. The Tucson MLS is still comparing Y to Y figures and not taking into account last year was all the areas so when they report last June had 1524 units sales and this year 1226 it makes the numbers look worse.
I’ll try and find out what I can on John’s newsletter and post back here.
July 20th, 2007 at 12:06 pm
The Tucson MLS is still comparing Y to Y figures and not taking into account last year was all the areas so when they report last June had 1524 units sales and this year 1226 it makes the numbers look worse.
Well, if that’s the case, their timing is even more bizarre. Why would they want to do that now? As if the national and local paranoia is not bad enough. I don’t know what areas were included before and whether their influence is substantial, but if Pinal County was included, for instance, that’ll make a huge difference. I saw somewhere very dismal numbers in Pinal.
I’d appreciate it if you can find something about this newsletter, Dave. I thought you were using it and it wouldn’t be trouble.
July 20th, 2007 at 12:30 pm
Concerned,
Exactly my point it doesn’t make sense to change the reporting basis for this year and continue to use overall figures from last year.
Second question first: John Strobeck’s Monthly Newsletter.
John’s company is Bright Future Business Consultants
You can subscribe to his news letter from this site it is $216.20 for an annual subscription.
I use the Tucson MLS figures. As much as I don’t like the way they gather their data and seem inconsistent in their reports I know what the data is and with access to the data some verification can be performed. That isn’t the case with John’s letter. I do know that is figures often differ greatly from the Tucson MLS.
However, we all have to remember the MLS figures are only for homes listed in the MLS. Not everything being built or for sale in Tucson.
Sometimes this is forgotten by the public when reading these reports. This is why it is called the Tucson MLS Statistics and not The Tucson Housing Market Statistics.
First question omitted areas.
Pinal County East
Pinal County South
Cochise County
Pinal County
Santa Cruz County
Mexico
July 20th, 2007 at 7:55 pm
Thank you very much for your extensive reply, Dave. Interesting where Strobeck gets his data from… The government records don’t get updated that quickly. Kinda steep price for that report, but it may be worth it.
Thanks also for listing which areas are excluded now. I think it’s good that Pinal County is gone. It must’ve dragged the numbers down.
I was looking at the ARMLS reports today. Since they list their numbers by zip codes, I was surprised to see incredible differences among them. I’m not familiar with the zip codes in PHX and didn’t research that, but I’d imagine the biggest drops are probably in the far outskirts of town, where the Californians were buying like crazy. I remember a friend of mine was planning on buying a house in Buckeye, but gave up. Not sure if that one is included in the PHX data. It was kind of refreshing, though, to find out that the percentage of subprime loans in AZ wasn’t as high as in CA, FL, and NV. It’s interesting the analysts can’t quite explain the recent rise of the interest rates with any traditional reasons… The 10-year note goes down, some other index they watch goes down (don’t recall what exactly), and yet mortgage rates go up… It appears that the regular borrowers with old-fashioned loans are supposed to pay for the subprime mess. That shouldn’t be a surprise, of course… All of us pay for underinsured and uninsured drivers, so why not pay for wanna-be investors and the greedy crooks giving them the loans.
Since I’m rambling for so long
, might as well share my own situation. I’ve got a contract on a new house. Signed it in late April, but a change of lot reset the clock by 2 months. Ever since I signed the contract, the mortgage rates went skyrocketing (can’t lock it now) and the comps around started going down simultaneously, which understandably makes me quite nervous, especially watching the financial losses of the builders and their cancellation rates… Even though the deposit is a substantial amount of money for me, sometimes it might be better to cut your losses short as opposed to losing your shirt soon. None of the existing houses for sale in the neighborhood move. The builder recently put a cancellation on the MLS for much lower price per sq.f. than even my base price and nobody’s biting… I’m planning on living in the house, but it’s not a great thought to get into it knowing it’s worth 20-40K less. Should something happen and you’re forced to sell it, you’re SOL-ed. I hear some opinions that the builders are willing to renegotiate nowadays even after the contract is signed. Will see how it goes…
I’m not so sure whether we have such a cheerful situation in Tucson. I’m getting obsessed with the issue obviously and did a lot of independent research on my own in the area. Many houses sold or are for sale at rolled back prices of ‘05, if not ‘04. I have a recent personal experience. My ex-husband and I bought a house at the very top of the market. It felt like we bought the last house in town without realizing it, Nov-Dec ‘05. Zillow’s estimate on this house was down 20K until very recently when it changed to a few thousands more than the price in ‘05. A couple of days ago read the statistics for Orange County, CA. The analysts also were saying that the highest average and median prices ever may not be a reason for so much enthusiasm. Obviously the median price is a better indicator, but they believe that only the people able to afford more expensive houses are in the market now, while the rest simply can’t afford them. In CA the prices are more detached from reality (income & rent), but we’re not that far behind…
July 20th, 2007 at 11:33 pm
Concerned -
Sounds about par…
You should research what is happening in Florida as well. Lots of builders are being sued as we speak. They sold house for, say, $300K when the times were good. Now, since they can’t move inventory, they are selling them at MUCH reduced prices (195K) and the other homeowners are, understandably, furious. Its going to get worse before it gets better.
The market in Tucson is being propped up artificially. What Dave sees as healthy market, I see as market dominated buy sales to the top earners in Tucson. I’d say the top 5% are actually buying homes, right now. The rest simply can’t afford the prices.
The credit contraction is full steam ahead right now. This is going to have a profound effect on ALL markets because credit is ubiquitous. Without easy money Americans are dead in the water. Couple that to the weakest dollar in history and you have an ugly, ugly economy.
2/3rds (70%) of our economy is powered by consumerism . When people finally wake up and realize that they have no equity, no credit, and any money they do have is worth 50% less the bill will finally come home to roost.
Look here (page 6):
http://media.corporate-ir.net/media_files/irol/63/63356/PMI_ERET061907_2.pdf
Pay particular attention to the cities tied for the 3rd riskiest housing markets near the top. You’ll see Suffolk-Nassau, NY.
Now, Look here (Appendix to report above page 6)
http://media.corporate-ir.net/media_files/irol/63/63356/PMI_ERET_Appendix2.pdf
Tucson is actually tied for third in the riskiest place for lowered home values. When you look at the numbers they will make sense to you, I presume. Again, its not a good time to buy anywhere, way too much risk in every direction. Its going to get worse before it gets better.
You have to ask yourself… Would I rather have a high price with a relatively decent interest rate OR would I rather have a low price with a higher interest rate. I say take the high interest rate and refinance when it comes down. You can NOT re-negotiate the price you pay.
July 21st, 2007 at 11:06 pm
bobby joe, I don’t think I’ve used the word healthy anywhere in any of the reports.
As to who is buying, I can’t tell. However, if you look at page 12 of the Tucson MLS Statistics Report it breaks down the 1226 homes by price range. I don’t think this represents just the top 5%.
July 22nd, 2007 at 11:05 am
Yeah, bobby joe, it is scary…
I had seen somewhere else the main table you were showing me and it actually calmed me down a bit, not seeing Tucson there at all, but hadn’t seen the big table broken down to the smaller markets.
Watched a little video from FL last night. Yes, the builders were selling houses previously sold for 300K at 145K. People were furious, of course, who wouldn’t be… In our local paper there are houses slashed down by 55 to 90K as well. Mine is not very expensive, so it can’t be reduced that much, but 20-30K is enough for me – with the agent fee factored in, there goes my downpayment should you need to sell for some unforeseen reason. The funny thing is, though, that after I signed my initial contract in late April the prices went up twice – in May and in June. Not by much, but did. Then in June I found out they were giving better incentives and inquired about it. Turned out the incentives for my model applied only to one premium lot. I decided to take it. They gave me the better incentive, but at the higher at the time price. Unfortunately, I do feel that’s probably my last chance at new construction reasonably close to town and by a decent builder I can possibly afford.
People tend to forget history and history does repeat itself. I’m a foreigner and haven’t lived in this country long enough to observe the housing bubbles and busts, but I’m trying to find historical data. If this cycle is anything like what happened in CA in the late 80’s and the early 90’s, it doesn’t look promising at all… Here’s the link: http://www.rntl.net/history_of_a_housing_bubble.htm Comparing to this timeline, the situation and headlines now resemble the 89-90 period.
I believe there are some positives in Tucson, though, which are not shared by CA, FL, and NV. Our ratio of available homes per capita is not that alarming. There was a county in FL (Lee, I believe) with 1 house per 16 people! Then again, this could be just a delay… Tucson being a spillover market. I’ve seen some opinions to that effect, too. On the bright site, AZ is #1 state for attracting businesses. Phoenix is #1 among the big cities, Tucson #4 and Flagstaff #5 among midsize, and Yuma #7 among the small ones.
July 22nd, 2007 at 9:08 pm
Hi Dave -
I don’t think you’ve said “healthy” either… but your tone certainly leaves that up for debate. Sorry to put words in you mouth. Will not happen again.
Dave, when the Median price is over $200K… you have to ask yourself; “who can afford *truly* a $1200 to 1800 per month for the principal and interest on the mortgage?” Be sure to add in $1500 – 2500 taxes (yearly), $variable maintenance, $50 to 300 per month in HOA fees, $variable PMI costs, $variable trash cost, $variable utilities. Your looking at probably closer to $2000 plus per month.
I’m in the top 25% in Tucson wages and $2000+ would be close to 50% of my take home per month. My Grandfather, a CPA, owned several H&R blocks in California… He told me that my mortgage should not be any higher than 28% of my take home per month. Period.
Concerned -
Tucson is a great place if you have a decent job. I love it. I was raised here and my kids will be raised here. I’m 4th generation Tucsonan.
That said, We still have a small city mentality despite being a giant friggin city. The businesses that we attract, unfortunately, are transient. They are lured in by some sweet deal produced by City Manager Mike Hein… then they stay for a year or two. Then Huckleberry and the rest of the inept city council drive them away.
Its a well documented issue. They come, figure out that Tucson is allergic to progress and leave. We have a lot of “manufacturing jobs” at In-and-out burger, taco bell, and Eegee’s (local chain store). High end sales positions at La Ecantada or the Ft. Lowell Furniture District.. if you think $30K a year is High-end.
Median annual salary is just under $27K a year. So you better bring some serious Medical Skills, Lawyering skills, Government skills, or be retired if you want decent pay.
July 22nd, 2007 at 9:24 pm
This isn’t going to happen in tucson, This isn’t going to happen in Tucson, This isn’t going to happen in Tucson…
http://www.youtube.com/watch?v=jIQaQn722QU
July 22nd, 2007 at 10:56 pm
Even though the situation in Tucson is obviously not rosy, I still believe it’s really not as bad as it is in CA (have you seen the ridiculous shacks and their asking prices here http://drhousingbubble.blogspot.com/) and FL for various reasons. First, the prices never went as crazy here as they did there. Second, the percentage of subprime mortgages here was much lower. Third, we seem to attract more population and businesses. Supposedly, we rank #20 on the list of 25 cities best for jobs http://hubpages.com/hub/Best_Cities_USA_Jobs?utm_source=rss-tag&utm_medium=rss. Then again, depends on what jobs… Tucson’s never been known for well-paying jobs.
I was just about ready to fold my daily research giving me a headache
, when I saw these numbers from Dec 06, on this site: http://www.praedium-advisors.com/assets/pdfs/phoenix2006.pdf
Regionally, the strongest increase in the median existing single-family
home price was in the West, where the price rose 12 percent to $344,000
during the first quarter. After Phoenix-Mesa-Scottsdale, the strongest
increase in the West was in Spokane, Wash., at $172,100, up 26.3 percent;
followed by Eugene-Springfield, Ore., at $223,600; up 25.3 percent from
the first quarter of 2005; and the Tucson area, at $248,600, up 24.9
percent.
I wasn’t watching the market at the time, but if this is true, how come 229K is now considered the highest median price in history…?! Even if the data above is not exactly from Dec 06, this median price must’ve been reached at some point. Remember reading in one of the “money” magazines quite some time ago that Tucson is projected to bottom out in the 2nd quarter of ‘08. This Strobeck guy I was asking about before was projecting second half of ‘07, I believe… Btw, what’s the deal with these price ranges in the listings again last few months?! I recall it being popular in ‘05, but now…
Noticed something interesting in the paper over the weekend, though. There are again “coming soon” communities in the new construction section. If I’m not mistaken, haven’t seen that for a while. Don’t know what to think anymore… The builders’ stock has plummeted… new communities coming up… Lennar’s stock is down 50% compared to July 05. The rest are not doing much better. The cancellation rates are in the 25-38% range, even up to 50% according to some… Pulte is warning for big losses, part of the reason being walking away from deposits ironically… just what the customers are doing.
When I first considered this new house, it was because the prices were slashed down by 10K and then went up by 2K. Who knows… maybe that’s as low as it’s gonna go. Should’ve just bought resale and gotten it over with. These months of suspense ahead are just gonna kill me.:-( It’s not fun at all to have a fixed price already and to wait as a trapped animal what interest rates are gonna hit you. It’s supposed to be a joyous anticipation and instead it’s turning out to be a nerve-wrecking experience. I’m not some investor or a bank who can afford to lose tens of thousands of dollars.
July 22nd, 2007 at 10:59 pm
Just tried to submit a comment and it didn’t go through. Tried again and got a message it was a duplicate. What could be wrong?
July 22nd, 2007 at 11:02 pm
Maybe it’s the HTML tags… I used italics before and thought it was ok to use bold, too. One more try:
Even though the situation in Tucson is obviously not rosy, I still believe it’s really not as bad as it is in CA (have you seen the ridiculous shacks and their asking prices here http://drhousingbubble.blogspot.com/) and FL for various reasons. First, the prices never went as crazy here as they did there. Second, the percentage of subprime mortgages here was much lower. Third, we seem to attract more population and businesses. Supposedly, we rank #20 on the list of 25 cities best for jobs http://hubpages.com/hub/Best_Cities_USA_Jobs?utm_source=rss-tag&utm_medium=rss. Then again, depends on what jobs… Tucson’s never been known for well-paying jobs.
I was just about ready to fold my daily research giving me a headache
, when I saw these numbers from Dec 06, on this site: http://www.praedium-advisors.com/assets/pdfs/phoenix2006.pdf
Regionally, the strongest increase in the median existing single-family
home price was in the West, where the price rose 12 percent to $344,000
during the first quarter. After Phoenix-Mesa-Scottsdale, the strongest
increase in the West was in Spokane, Wash., at $172,100, up 26.3 percent;
followed by Eugene-Springfield, Ore., at $223,600; up 25.3 percent from
the first quarter of 2005; and the Tucson area, at $248,600, up 24.9
percent.
I wasn’t watching the market at the time, but if this is true, how come 229K is now considered the highest median price in history…?! Even if the data above is not exactly from Dec 06, this median price must’ve been reached at some point. Remember reading in one of the “money” magazines quite some time ago that Tucson is projected to bottom out in the 2nd quarter of ‘08. This Strobeck guy I was asking about before was projecting second half of ‘07, I believe… Btw, what’s the deal with these price ranges in the listings again last few months?! I recall it being popular in ‘05, but now…
Noticed something interesting in the paper over the weekend, though. There are again “coming soon” communities in the new construction section. If I’m not mistaken, haven’t seen that for a while. Don’t know what to think anymore… The builders’ stock has plummeted… new communities coming up… Lennar’s stock is down 50% compared to July 05. The rest are not doing much better. The cancellation rates are in the 25-38% range, even up to 50% according to some… Pulte is warning for big losses, part of the reason being walking away from deposits ironically… just what the customers are doing.
When I first considered this new house, it was because the prices were slashed down by 10K and then went up by 2K. Who knows… maybe that’s as low as it’s gonna go. Should’ve just bought resale and gotten it over with. These months of suspense ahead are just gonna kill me.:-( It’s not fun at all to have a fixed price already and to wait as a trapped animal what interest rates are gonna hit you. It’s supposed to be a joyous anticipation and instead it’s turning out to be a nerve-wrecking experience. I’m not some investor or a bank who can afford to lose tens of thousands of dollars.
July 22nd, 2007 at 11:06 pm
Removed HTML tags and still wouldn’t go through. Maybe I’ve linked to some undesirable site…? Is there censorship around here?;-)) The comment is certainly on the topic and it’s not spam. Let’s hope it’s just a tech problem.:-)
July 23rd, 2007 at 1:52 pm
i know for a fact the moderator here censors input.
i have been censored.
July 23rd, 2007 at 9:56 pm
Concerned, and censored,
First Concerned. No there is no censorship here other than pornography and profanity. There is a spam filter or there would be tons of bogus comments everyday. The spam filter is triggered if there are more than two links in a post. I then am notified of a comment for approval or spam.
I had to go to Phoenix today to pick up our daughter and there was a truck and auto fire and explosion on I-10. It held traffic for about 6 hours. We had to go back roads around it and just arrived home after leaving Phx. almost 5 hours ago.
Censored, I like your “I know for a fact the moderator here consors input. If you have been censored it was only because you got caught in a spam blitz and you had more than three links in your comment.
For those that don’t run blogs, a spam blitz is when several hundred comments come in all in a couple of hours. All selling access to porn sites. They get bulk deleted. If you just happened to post in the middle of one of those your comment would have been missed. I don’t get email notifications on those.
July 23rd, 2007 at 10:16 pm
bobby joe,
The titles were just my way of trying to have a little fun with the Arizona Daily Star. Remember the article they ran in a Sunday paper headlines Homes Languishing on the market. When the article was actually read the home they were tracking that hadn’t sold for 8 months and was languishing on the market HADN’T EVEN BEEN BUILT YET!!!! So it was in that vein I was making up the Over the Top Headlines.
July 23rd, 2007 at 10:21 pm
Concered, I’ve been gone all day and just did a quick scan of your questions on median price. Just look at the Statistics report. It shows median price going back to 2000 or earlier.
As to John Stobeck’s numbers and some confusion. You have to remember there are two Real Estate Markets. New Home Construction, this is what is most reported in the media. And Resale market. This is the market of median sale price, not New Construction. So one will turn before the other. It is often hard to distinguish which is being discussed, many national media writers only talk about New Home construction as if that was all there is to a Real Estate market.
July 24th, 2007 at 6:38 pm
Hi Dave!
I know your having some fun.. no worries mate. If you want some cheap AZ Daily Star entertainment; check out Ernesto Portillo’s column. He has obviously angered a rather large segment of readers and they hammer him *almost* everyday. It’s actually kind of funny to read the comments.
Did you catch the Countrywide Financial Conference call this morning? If you didn’t, there were some notable quotes from CEO Angelo Mozilo:
The Big ONE:
******”Company is seeing home price depreciation at levels not seen since the Great Depression”*****
-Previously, the company had stated they expected a turnaround in mid-2008; now, they say they are not sure when housing declines will cease. Refuse to rule out house price declines in 2009;
-Surprising comment regarding the prime portfolio: so far what they have seen in deliquencies is due to people losing job, losing health, lost marriage, more so than any resets. Stated that the “definition of prime may not be as high as some people think.”
-Expects to hear mergers and people going out of business in the near future;
-The company cut its 2007 earnings forecast to a range of $2.70 to $3.30 a share, down from previously lowered guidance of $3.50 to $4.30 range (projected in April). In the beginning of the year, the company said it expected to earn $3.80 to $4.80 a share.
THE REST:
- “During the quarter, softening home prices continued to affect many areas of the country, and delinquencies and defaults continued to rise across all mortgage product categories as a result.”
-Delinquencies and defaults rising across all investment tools.
-Lower home prices may effect credit.
-S&P Case-Schiller is strong tracking tool for health of housing market
[Editor: we have referenced this many times]
-CFC continues to study further tightening of loan standards for both subprime and prime
-CEO believes markets will force the weaker mortgage companies to either work with bigger players or look elsewhere for business
-For a Fed Governor to say that the lending group had this coming is unbelievable.
From: http://www.nyse.com/events/1182854060287.html
and
http://bigpicture.typepad.com/comments/2007/07/countrywide-hom.html