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With the September Absorption Rate report we close out the third quarter of 2009. Tucson has seen a considerable drop in inventory over the last year. When you factor in the number of homes on the market that are REO or in Short Sale the number of Residential Resale properties ready to move in has dropped to a very low level.
REO and Short Sales 43% of Closed Transactions
The number of homes sold in July that were REO and Short Sales were about 16% of the total. Now in September it was 414 out of 962 closed transactions bringing it to just over 43%. We are hearing from buyers coming in to the market in the next few weeks looking for more “bargains” and they are finding that even when not looking for a bargain the number of homes matching what they are looking are a handful not compared to lots of options before. The store shelves aren’t as full of choices as they used to be and what is there often isn’t what anyone wants.
The number of people with the skills or the pockets to bring an REO up to the standard of a home you want to live in are few. It can end up costing more to renovate these homes than to buy one that has been well maintained and is “move in ready”.
Our market in Tucson reminds me of the old Fram filter commercial where the guy says “You can pay me now or pay me later” Translated to housing, some homes with a bargain purchase price aren’t a bargain at all.
Tucson Absorption Rates for September 2009
I think the area that caught my eye as I was putting this together was the South. With a total of 385 available properties and 100 sold in September it means there is 2.85 months of inventory in that area. That’s not a lot to chose from.
When you put together your price range, number of bedrooms, baths, acres, location, garage spaces and style of home the availability of properties drops off rather rapidly. Sometimes we used to be able to show 100 homes matching these criteria. These days it can be as few as 2 or 3 depending on what it is the buyer is looking for.
We are holding pretty steady at the 6 months of inventory for overall areas in Tucson. Now we push on into the Fourth Quarter and begin to wonder if there will be a housing shortage by the end of the year. Time will tell.
