Interesting Shift in Tucson Residential Sales
August 25, 2009
Post Tags: tucson home sales , tucson housing shortage
A Shift in the Tucson Market pattern
I’ve noticed an interesting shift in the sales pattern in the Tucson real estate market in the last few weeks. July was the first month in which we have been able to track short sales and REO’s. For the month of July we had 57 short sale and 148 REO closed transactions recorded as part of the 1215 total closed transactions. This represents 16.87% of the total sales recorded.
So far in August we have 63 short sales and 158 REO closed Transactions recorded as part of the 606 sales to date. This represents 36.46% of the total transactions to date.
What’s the Cause for the shift?
Why the shift in percentage? There are a couple of things we can speculate about.
First, Maybe there is not real shift. It is possible there were enough transactions in the hopper as pending that were there before it was required to put Short Sale or REO on the transactions. However, all listings in the system were supposed to be caught up and checked for the appropriate status of the listing even if they were already in the process of being sold.
Second, There really are more short sales and REO properties closing this month. Since a short sale can take 4 to 9 months to close it means many of these have been in the process of being closed for a very long time. It could be just a coincidence that so many are closing all at the same time.
Third, it is possible that more banks are moving sales through the process quicker having added more staff to handle the properties in this category. (That being said, I DON’T think so based on the experiences we are seeing of a lot of buyers and listing agents ourselves included).
Therefore, my best guess, a combination of number 1 and 2. But that’s not the most interesting part.
The most interesting part
A shift this dramatic from 16 to 36% should see a huge difference in the average and median sale price. But there isn’t. You can see in the sidebar that the median price has dropped from $169,000 t0 $165,000. This is the typical for a summer shift in Median Sale price. This indicates the difference in the sale prices of the rest of the market not a part of short sales and REO are priced fairly close to what these sales are. Or another way of looking at it. REO and Short Sales are very close to the rest of the market when taken into the median and average sale prices.
Where is the Market Going
Right now it is headed where It has been all year. Sales are up, Inventories are down and we are headed into a housing shortage for the 4th quarter of the year. No bold text, not headlines, just the direction we are still headed. I’ve been saying so for months. We now have 4.99 months of inventory for the city and many areas of the city are in the 2 to 3 months of inventory status. As buyer confidence strengthens and the fall selling season heats up the question will be how low will inventories go before prices start to rise. That is now the biggest question of them all.
