Tucson/Oro Valley/Marana/Vail Mid-Year Real Estate Report

This article authored by: Rob Hallberg

Tucson Arizona Economic ForecastMany of us receive our real estate news from Radio, TV, Newspaper or the Internet and they usually report National Trends. Sometimes there are articles on Arizona or Phoenix, but for Tucson real estate there are limited resources. Each month there is a report in the local newspaper about the Tucson MLS statistics, but that’s about it except for the occasional local story.

Don’t be misled by statistics regarding the National or even Phoenix market.  While these statistics can reveal trends that often show up in the Tucson market, there are no guarantees. Buyers and Sellers also use current sales to determine market value, so trends don’t help us with today’s market.

Even cities and areas within Tucson experience different growth rates.  For example, Vail and Southeast Tucson typically lag behind Northwest Tucson and the cities of Marana & Oro Valley, so I have chosen to focus on the changes in these areas.

 

Homes Sold

Vail was the clear leader here, with a 45% increase in total homes sold in 2015 versus the same period in 2014. Northwest Tucson sales increased by 16% while Southeast Tucson only 8.5%.  I attribute Vail’s large increase due to pent up demand – demand to sell homes, that is. Vail has lagged the rest of Tucson in recovery from the housing collapse and many home sellers could not afford to sell their homes until this year. Vail is also a high turnover area due to the school system. Families that are drawn to Vail for the School System tend to move closer to Tucson once their kids are gone.

Average Sales Price

What is My Home Worth?Northwest Tucson appears to be the leader here with a 2.31% increase in average sales price over 2014.  Southeast Tucson sales prices dropped by almost 1% as compared to 2014 while the average sales price in Vail dropped by 1.5%! But not so fast. The average sales price can be affected by the “mix” of high and low priced homes.

For example, if a larger percentage of higher priced homes sold in Northwest Tucson in 2015 as compared to 2014, the Average Sales price will show an increase; however, it is also possible that prices actually dropped and the apparent increase is due to the “mix” of homes, not an actual price increase.

So I checked the Average Sales Price per Square Foot for each area, as these calculations are not affected as much by the “mix” of homes sold.  Now Vail is the leader with a 2.16% increase over 2014, followed closely by Southeast Tucson with 1.97% and Northwest Tucson actually shows a drop of 0.33% over 2014.

The “mix” of homes in Southeast Tucson and Vail have a larger percentage of lower priced homes sold than the Northwest. Why? Southeast Tucson and Vail has recovered more slowly from the housing crash and there are still a large number of short sales and foreclosures being sold, which drives the average sales price down.

Days On Market

263651-20150713Days On Market equals the total days a home has been available for purchase. Once a contract has been accepted, Days On Market stops, which makes it a good indicator of how quickly homes are selling. There was no change in Days On Market in Southeast Tucson while Northwest Tucson showed a 3.17% increase. But Vail showed a whopping 11% increase! I suspect foreclosures and particularly short sales are to blame here. Short Sales stay on the market much longer than other properties as a large number of Buyers refuse to consider them. In the Northwest, I believe the increase is do to a larger number of higher priced homes being sold, which do stay on the market longer the mid to low priced homes.

Conclusion

The number of homes sold is up throughout Tucson but sales prices are somewhat flat or show only a slight increase.  For Buyers, this means homes are still a great value but prices are starting to trend upwards. Interest rates may increase in September and it’s almost a certainty by October so the time to Buy is NOW. For Sellers, the increase in number of homes sold shows the market is taking off.  Homes that are in “move-in” condition and priced close to market value will sell quickly.

Rob Hallberg

Rob and Catherine Hallberg are Associate Brokers with Long Realty, a Berkshire-Hathaway Affiliate and Southern Arizona’s largest Brokerage. Since 2008, they have been ranked in the top 5% to 8% of all U.S. REALTORS®. Send Rob and Catherine an email  for a fast response to your questions; for an even faster response, Call (520) 407-8667.

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