Time is Perfect for Buying a Tucson Vacation Home

With all the doom and gloom that's being broadcast everywhere by the media, it's nice to hear that some areas of real estate are stronger then ever. According to an article in the September issue of Today's Buyer' s Rep, it seems that many people are taking advantage of lower home prices to make their dream of owning a vacation home come true. A study done by the National Association of REALTORS found that although sales of investment properties and single family homes are down right now, vacation and second homes sales have been slowly rising in record numbers. In 2006 vacation home sales actually rose 4.7% nationwide, setting a new record, while primary residence sales declined just over 4%.

Looks like vacation home buyers are getting younger as well. In 2005 the typical age of a vacation home buyer was 52, and it 2006 it dropped to 44. One possible reason for this is that people in the younger age bracket view a real estate purchase as an investment alternative to an always fluctuating stock market. Most vacation home buyers have household income over $100,000, and they want to make a long term investment they feel is wise and secure. Many of these buyers purchase with the intent of using it as primary residence when they retire, but rent it out in the mean time to offset costs.

Tucson and other Arizona areas remain popular destinations for vacation home buyers, and have a big impact on the local real estate market. Between 2000 and 2004, 28% of the annual average growth in Arizona resulted from purchases of vacation or second homes. Arizona fell second to Nevada, who contributed 35% of the annual average growth during this period to vacation or second home buyers. Tucson's dry climate and warm temperatures are perfect for enjoying many of the outdoor activities that vacation home buyers are looking for, like golf, hiking and bicycling.

The slowing of Tucson home sales makes it a great time for home buyers to begin their search for a vacation home. Home investors that once drove up Tucson real estate prices are now avoiding the market. This gives Tucson home buyers time to evaluate what's available and make a decision they can feel good about. Lower home prices also make it a great time to buy because after several years of price increases, the Tucson housing market is normalizing again, giving buyers a clear picture of what the home their purchasing is worth.

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Ramblings of a Tucson Runner

This is my first official "runners ramble" so please bear with me. I love to run. Running ties with eating as my favorite thing to do. Luckily they seem to offset each other! I run 4-5 days a week, and I always appreciate what a great city Tucson is for runners. The Tucson climate is perfect, dry and cool in the mornings, and the scenery is beautiful so it makes long runs a little easier. Most of the streets in Tucson have bike lanes on each side of the road, and this is where I choose to run. I run against traffic (I like to see impending death if it's approaching me head on), and I avoid the sidewalk because the surface is harder to run on (concrete) and it's usually occupied with walkers and their dogs. I'm partial to Oro Valley because that's where I live, and I've got several running routes that take me various distances. I've never found traffic to be a problem when I run. Most drivers are considerate and pay attention to their surroundings.

There are a lot of great "runs" in Tucson depending on what the type of terrain you like. You'll find your typical street runs, but there are parks and hiking trails that really give you a great run if you're up for them. Some of the local favorites are -

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  Sabino Canyon - which is a paved road with lots of hills. It's about 8 miles round trip, and you're surrounded by mountains, plants and creeks. There are restrooms and water fountains available.


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  Catalina State Park - located in Oro Valley, there's a 2 mile paved road that takes you up to some hiking with unmatched views of Pusch Ridge.


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  Rillito River Path - Great path that follows the banks of the Rillito River. It's a concrete path so it can be rough on the legs, but it's a straight 10 mile path that's very scenic. It's multi use so you need to watch out for walkers, bicyclists etc.


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  For more popular running paths visit the Southern Arizona Roadrunners website

Several of my out of state clients are runners and considered Tucson real estate because the climate is perfect for outdoor activities. It's great motivation when you know the weather isn't going to be an obstacle. I'm the type of runner that won't run unless I do it first thing in the morning, before I let myself find an excuse to not go. The great thing about Tucson is you only need to walk out your front door to find a good place to run.

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5.1 Million homes currently for sale nationwide

Just spotted another interesting article about national home sales and I thought I would make a quick post. The LA Times reported today that as of August 2007 there were 5.1 million homes actively for sale nationwide. NAR reported that 4.58 million of those were existing homes for sales while the other 529,000 homes are unsold new construction homes.

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New Home Builders See Sales Drop in Tucson and Nationwide

More news on the national housing market made front page news in USA Today. New construction homes saw a sales decrease of 8.3% nationwide from July to August. New home builders are slashing prices and encouraging buyers to take advantage of the many incentives that are being offered.

For more on the story visit USA Today

In Tucson we are seeing some great home builder incentives and price cuts. One client of mine was actually contacted by the builder he is already under contract with and notified that they are reducing lot premiums and will be adjusting his purchase price for his home.

The Tucson real estate sales stats for September will be out in early October. I'll be counting down the minutes.....

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New Food Blog for Tucson Food Fans!

Just wanted to let you know that I have a new blog for those of you that really love to eat! Tucson Foodies is my new blog and I'll provide restaurant reviews, info on upcoming food events and tips about Tucson food, or just where to find the best of whatever you're looking for. Feel free to check it out and offer feedback about your favorites foods in Tucson. Bon Appetit!

Valorie Bradley

Long Realty

www.valoriebradley.com

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Tucson Homes Sales Down for September

Tucson homes sales are down significantly this month, and the story made national headlines in USA Today. The article, "Housing likely to continue to flail" reported that existing home sales nationwide fell to the lowest point in five years during August. The National Association of Realtors reported that sales for September are expected to fall even lower due in large part to the "mortgage meltdown".

A study done by Re/Max International analyzed home sales in five major cities, with Tucson being one of them. The results found that Tucson home sales for the first three weeks of September are down about 44%.

Investigating on my own, I researched home sales from Sept. 1 through Sept. 29 for 2007 and 2006. When comparing current numbers to those of last September I found that Single Family homes sales in NW Tucson are down 21%. Central Tucson shows a decrease of 59% from homes sales during the same period last year. Only North Tucson saw an increase, 16%, in home sales over this period last year. With only a few days left in September, we should see a large number of homes sales posting. The Tucson Association of Realtors will soon be releasing local sales statistic for September, and I'll be posting results once I get them.

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The Contingency Clock Keeps Ticking

As everyone knows the real estate market in Tucson and the rest of the nation has taken a turn in the last year. Luckily the Tucson housing market is still in better shape then a lot of other areas in the country, as homes are still selling and we're already seeing homes prices begin to inch their way up. But it's a tough market for those homeowners that are currently trying to sell their homes. Two years ago home sellers wouldn't take a contingency, they didn't need to. In Tucson homes were selling faster then we could list them. In today's market we are seeing contingencies more and more, and the contingency clock is ticking louder then ever.

So many home sellers are in the same predicament right now; can't buy unless they sell. A close friend of mine who is a REALTOR is planning to sell her home in Tucson and relocate to Phoenix. She did her homework and studied the comparables and found the price she felt would bring lots of buyers to her front door. She had a home inspection, she's offering a home warranty plan and money towards closing costs. The house is in a great NW neighborhood, is move in ready and is located on one of the largest lots in the development. This house is ready to sell! In the meantime she's traveled to Phoenix with her family and looked at new construction homes and found one she absolutely loves. The problem is, no one is looking at her own home in Tucson. On the market 30 days and two "looky loos". The home builder in Phoenix will take a contingency, but only for three months. And prices on those homes are already going up. She decided that this new house is too great to pass up so they put together a contract on their new home. And so the clock is ticking as she waits for an offer on her current home.

My friend recently asked me... "Should I drop the price now or wait to see if the market picks up?" It's hard to answer this question because you don't want to give anyone the wrong advice. And no real estate professional can honestly "predict the future" and tell you if prices will go up or down. To drop or not to drop the price; that is the question. It depends on each sellers situation at the time. My question for my friend was "How much do you want the house in Phoenix?" If she doesn't sell this home then she can't buy in Phoenix. Then it becomes about price. We all want a certain amount for our home. Even myself, a real estate agent, feels that my own home is worth more then I could probably sell it for. It's personal. But unfortunately the current real estate market dictates what a seller is going to get for their home right now. The price might not be as high as we'd like, but it's much more realistic then it was two years ago.

Tucson is beginning to see increased activity in the real estate market. More buyers are peeking out of the "mortgage meltdown" shadows and diving into the inventory of homes currently available. But there's still sense of caution, their steps from the shadows are on tip toes. The next few months will be telling...will the interest rate cut motivate the economy? I expect we'll need another cut to get the ball rolling, but time will tell. And the clock keeps on ticking.....

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Another Point About Tucson Traffic

After driving through Tucson this morning I realized I forgot to mention one issue I DO have with traffic in Tucson; drivers not obeying the speed limit. I'll admit that I drive a little fast myself (I stay within the safe 10 mph over the posted limit), but my issue is with those drivers that excessively fast. Just today I was passed by someone going 75 on Interstate 10 when the construction limit is 55mph. And on Houghton Rd, which is only two lanes off I-10, a driver was weaving in and out of busy traffic, passing whoever was in front if him. Tucson has a reputation for having a lot of speeders on the roads. All I ask is that drivers try to remain safe and remember that the reduced speed limits are there for a reason, to save lives.

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Feels like Fall in Tucson

Today in Tucson you can actually feel Fall in the air; how ironic that it's the first official day of the season. One of the things I miss about the Midwest is the chilly temperatures, gusty breezes and golden landscape that carry you thru Halloween and Thanksgiving. This morning patches of grey clouds are hanging in the air, but the sunshine keeps breaking thru every so often, reminding us that she's the one in charge. When you live here and experience about 320 days of sunshine a year, you get a little excited when the sky clouds up and a cool breeze blows thru. And since Tucson doesn't really see the seasonal changes that cooler climates do, it's refreshing when the weather surprises us. Compared to other parts of the country, Tucson is still pretty warm. The temperature right now is about 80 degrees, but the overcast skies and steady breeze makes it feel a lot cooler.

You won't see the bright Fall colors in Tucson that you might find elsewhere (anywhere that has trees). There is large number of plants that bloom in the Fall, and some that turn that faintest hues of yellow and red, like the Ocotillo. One of my favorite seasonal plants is the Pyracantha, which is green with small white blooms in the Spring, and develops bright red berries when it turns colder in the Fall. It resembles holly, and birds love to eat the berries, so it attracts a lot of wildlife.

If I really want to experience rich Fall colors I head to Flagstaff, which is northwest of Tucson. It's about 4 1/2 hour drive on I-17, and it's a much higher elevation (7000 ft) then Tucson so you' find an endless forest of tall trees as you drive on the winding roads. During September and October the colors are incredible, and people all over Arizona make there way to Flagstaff to enjoy the scenery and cooler temperatures. It's a great escape and it helps people like me remember that there still seasonal changes during the year, even if we don't get to experience them!

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Mortgage Tips From the Expert

There's been a lot of discussion this week about the Fed's rate cut, but it seems like many people are confused about the impact it's going to have. I asked my mortgage pro Perry what information he could give me, and I found out some interesting information.

How will the “Fed’s” rate cut effect home buyers?

In the short run… rates will likely go up for mortgage loans (except home equity loans). Yes, I said up. “But rates got cut, why would mortgage rates go up?” If you promise not to shoot the messenger I’ll explain. Let me start by clarifying some often confused terms and misconceived notions. The only rate that the Chairman of the Federal Reserve directly controls is the “Discount Rate” (see glossary below). He can influence but he has no direct control over mortgage rates! He also indirectly controls the “Fed Funds Rate” also called the “Overnight Rate” by setting a target for the rate. And since the Prime Rate is essentially the Fed Funds Rate plus 3% one could also say that he indirectly controls the Prime Rate.
A key concept to understand, one that many borrowers tend to get wrong is the fact that none of these rates I’ve mentioned (Prime, Discount, Fed Funds) are long term rates and Mortgage rates are every bit long term rates. Therefore, a change in the Fed Funds rate only influences mortgage rates it does not dictate them.
A half point reduction in the Feds Funds Rate does not translate to a half point reduction in Mortgage rates. In fact, though the two rates often trend in the same direction, they can actually move in opposite directions. I know it seems counter intuitive, but there are many other influences that effect long term rates and if those influences are getting more traction in raising mortgage rates than the Fed Funds Rate cut is getting in lowering them, the rate cut can be neutralized when it comes to moving mortgage rates. Sometimes long term rates actually trend in opposite directions with the Fed Funds Rate. Rates creeping upward despite Tuesday September 18th 2007’s half point reduction to the Fed Funds Rate is a classic example.
No one knows for sure where 30 year fixed rates will be 6 months or a year from now. Rates going up this week could have been a knee jerk reaction to inflationary fears spawned by the Fed stepping in and reducing the Overnight Rate. We could see rates come back a bit within the next few weeks if market speculators become less jittery about inflation.
The one thing that we know for sure is that though rates are not at the very bottom where they were a few years ago, they are still historically low. If you went to the gas pump tomorrow and paid 97 cents a gallon would you be pretty happy about that or would you think gee, my grandfather only paid 45 cents a gallon when he was a kid. So what! We may never see that again in our lifetimes. Mortgage rates are at 97 cents a gallon right now. Don’t put off buying the home you want hoping that rates dip “just a bit lower” because you may be waiting for 40 years. When rates are as low as they are now, the odds that they will go up vastly outweigh the odds that they will improve.
I’ll leave it with a positive note. Because most people’s home equity loans are tied to the prime rate and the prime rate is influenced by the recent rate cut, most people with a home equity line of credit will benefit by seeing their HELOC rate reduced by that same half point next billing cycle.
Remember: The Fed sets the Discount Rate and banks set the Federal Funds Rate and mortgage lenders set their individual Mortgage Rates based on numerous market conditions.
Market update: The central bank reduced the target rate for overnight lending between banks to 4.75 percent On September 18th 2007, saying in its statement that policy makers are trying to contain the housing slump while continuing to monitor inflation risks. The Fed also lowered the discount rate at which it makes direct loans to banks by another half-percentage point to 5.25 percent. The first half point cut in the discount rate came on August 17th and lowered it to 5.75 percent from its previous rate of 6.25%.

Glossary:
The Discount Rate (Currently 5.25%) is the interest rate set by the “Fed” or the Federal Open Market Committee (FOMC).This is the interest rate at which banks in the Federal Reserve System can borrow money from the Fed. However, once these banks have borrowed money from the Fed, they can lend it to other banks at whatever interest rate they want. This is where the Federal Funds Rate comes in.
The Federal Funds Rate (Currently 4.75%) is the rate banks charge each other as they lend money back and forth among each other. This rate is also referred to as the “Overnight Rate” because these loans are given in order to maintain their required reserves and often last for only one day. It is called the Federal Funds Rate because it is the rate banks charge to lend funds that they have received from the Federal government.
Note: The Fed uses the federal funds rate to control the supply of available funds, essentially controlling inflation. If the federal funds rate is low, banks are more likely to borrow from one another, using the reserves to grant more loans which in turn feeds the economy. If the Fed feels the need to slow things down, they will simply raise the federal funds rate, which will put the brakes on borrowing among banks.
The Prime Rate (Currently 7.75%) is the interest rate offered by commercial banks to its most valued customers. The prime rate is also the index for many mortgage programs, including HELOC’s (Home Equity Line Of Credit). The prime rate always adjusts according to how the Fed changes the discount rate.

PERRY (Timothy Perry)
Home Mortgage Consultant
Wells Fargo Home Mortgage
866258-8363 Office
866711-6377 Fax
timothy.perry@wellsfargo.com

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Is Tucson Traffic Really That Bad?

According to a study done by the Texas Transportation Institute, Tucson traffic is getting worse faster then other cities of similar size. The 2007 Urban Mobility Study reported that the average American living in a mid size city like Tucson spent 28 hours in traffic in 2005, while Tucsonans spent 42 hours in traffic. According to this study, Tucson is ranked the "25th most-congested urban area" among the 85 areas included in this report. Phoenix was ranked 15th, with drivers being tied up in traffic about 48 hours.

Living in Tucson for over 15 years, I driven thru about every nook and cranny of the city and never noticed any real traffic congestion. I will admit that traffic has increased since I first made my home here, but Tucson traffic does have it's seasons. During the summer our roads are less congested because U of A students have gone home, and snowbirds (that's what we call our seasonal residents) are back enjoying cooler summer temperatures at their primary homes. Once we move into the Fall months, traffic picks up as students begin school again and snowbirds flock to the SW to keep warm.

Traffic can become congested where road construction is going on, but I've found that the city does a pretty good job with keeping the roads running smoothly in those areas. The construction project on I-10 will prevent drivers from entering or exiting the freeway on six main ramps thru downtown Tucson for the next 2 1/2 years, but I've found it's pretty manageable. There are several sites that offer live video of the traffic on I-10, and other sites provide up to date info about what's going to happen next. The majority of businesses in this area expected to lose clientele due to closures but were surprised at the increase in business due to more traffic on the frontage roads. Nice to hear that this ongoing project hasn't caused any significant problems for most.

There are some areas that do experience high traffic volume, and most this occurs during rush hour. Central Tucson sees a lot of backups and rush hour traffic can be a nightmare. The intersection of Ina and Oracle in NW Tucson creates a lot of congestion between 3:30pm and 5:30pm due to drivers heading home to Oro Valley.

Closer to home I'd like to note that the road widening project on First Ave leading up to Oro Valley has been a piece of cake. Since First Ave is a main thoroughfare up to Oro Valley, and there has been only one lane heading in each direction, I thought that traffic would be backed up for the majority of the project. I must say though that I can count the number of times on one hand that I was stopped, and that was due to drivers making a left turn on Naranja. Two new intersections, two extra lanes and turn lanes have been added, so as they finish up the final paving this week, everything is looking great. I might add they've done a great job with the landscape too. I'm sure that many other Oro Valley residents are excited to break in this new roadway. The biggest problem will be remembering that now we can drive the normal speed limit rather then the 25MPH for construction zones.

Overall I've seen no significant problems with traffic in Tucson. Yes it's increasing, but that's happening everywhere; with growth comes traffic. If you've ever been to Phoenix, traffic in Tucson is a walk in the park. Many of my past clients say that one of the reasons they chose Tucson is because there wasn't a lot of traffic. Some compared Phoenix traffic to LA and said "No Thanks"! Tucson is very spread out and it can take some time to get where you're going, but when you surrounded by gorgeous mountains it makes the drive pretty easy on the eyes.

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Tucson Sales and Home Prices by Area

Looking at August sales statistics for the various areas in Tucson, the numbers show that people are still buying homes, but some areas in Tucson are selling better then others. Home sales increased at a steady rate and sales prices increased slightly during the month of August. All areas of Tucson saw an increase of listings sold compared to July's numbers. Once again Northwest Tucson saw the largest number of listings sold in August with 2,367, a 13.7% increase over July's number of 2,081. Central Tucson came in second with 1,581 listings sold, about a 15% increase over July's number of 1,377. In my experience I've found these two areas to be very popular so sales tend to remain consistent. Central Tucson is close to the University of Arizona, so student housing is always in need there. Northwest Tucson has had an incredible amount of growth and development in the past several years, and it beautiful mountain scenery attracts at lot of home buyers.

Home sales prices increased in most areas of Tucson, with Northeast and Extended SW Tucson seeing the biggest gains. The Extended SW area of Tucson includes Green Valley, a destination retirement community about 20 minutes south of Tucson off I-19, and Sahuarita , a master planned family community about 15 minutes South of Tucson, which I've found to be a popular choice for my home buyers working at Raytheon. The Extended NW area of Tucson saw a significant decrease in the average sales price, about 16% less then July's sales prices of $177,433. This area of Tucson includes a master planned community with a lot of new home construction taking place in Gladden Farms . The community exploded when it first began development several years ago, but due to lack of services and amenities in close proximity, I've found few home buyers are currently choosing to live in this area when there are so many options closer to town.

Average Sales Price by Area August 2007

The Average days a home was on the market increased again to 69 days for August, a 6% increase over July's DOM number of 65. The NW, SW Tucson and the Extended SW Tucson areas saw the biggest increases of DOM, while the Extended South, West and Extended West areas saw fewer days on market. I always take these numbers with a grain of salt. The DOM numbers that are reported can't always be counted on to accurate as the number of days a home shows it's been on the market can be manipulated.

Tucson Average Days on Market

Overall the Tucson real estate market remains good. Sales prices are beginning to increase, but not drastically, so sellers are feeling more comfortable with the sales prices their homes get and buyers still feel like the market is in their favor. As we make our way into the Tucson "busy season" prices will most likely continue to rise steadily as days on market goes down.

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Fed's Cut Rates, But What's it Mean?

The Fed's cut the federal funds rate by a half point today in the hopes of turning around what many say is the worst housing slump our nation has seen in 16 years. The key rate, which was lowered to 4.75%, has caused a frenzy on Wall Street. Since I don't really follow the financial and economic markets as much as I should, the information has become a little overwhelming. So I decided all I really need to ask is what does this mean for me and the typical consumer? I wanted to find out what it all means in the grand scheme of things, and I did find some interesting information.

Two rates were cut by the Federal Reserve. The Federal Funds Rate, which is considered by many as the "most important" rate to consumers, is a short term interest rate that affects consumer loans. By lowering this rate it becomes less expensive for consumers to borrow money. Credit cards, auto loans and mortgages, will see slight dips in interest rates, which may encourage consumers to spend more. If homeowners have ARM's, their current interest rates could reset to the new lower rate.

The Fed's also cut the Discount Rate by half a percent to 5.75% on Friday. This is the rate that banks and lending institutions are charged by Federal Reserve Banks when they borrow money on a short term basis. When the discount rate changes, it affects the costs that consumers pay to borrow money. This rate cut will decrease the banks costs, in turn decreasing the borrowers costs.

There are several reasons that the Fed's made these significant cuts ( I say significant because these cuts were higher then the quarter cut that most expected). Basically, there's a fear that a recession is lurking out there in our future, and this is the Fed's attempt to prevent it. The housing slump, mortgage meltdown and weakening job market have stressed out consumers, making them reluctant to spend. This rate key is the Fed's attempt to keep consumers spending, which stimulates the economy.

Unfortunately these rate cuts will not be seen immediately. It could take months before consumers see the impact of these cuts that everyone is so excited about.

Now the big question is "How will this effect the housing market? Are more people going to feel encouraged to buy a home? I know that this rate cut is meant to spark consumer interest, but is this the "save all"? I personally think we need a larger rate cut to really get the ball moving and motivate the economy. That's the only way to affect mortgage interest rates. The housing market has taken months to fall, so a quick adjustment of the interest rate is not likely to save it immediately. Sales prices for homes in Tucson have increased in the last month, but foreclosures are also on the rise. And there are still a lot of problems within the mortgage market. However I do think Tucson is going to see it's real estate market begin to inch up this Fall as it usually does. Tucson has a faithful following; it's a beautiful city with much to offer, and it attracts home buyers from all over. Tucson Real Estate Sales Stats for the next two months will be telling in regards to the impact the rate cut is having on consumers locally.

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Tucson's August 2007 Real Estate Statistics

The Tucson Association of Realtors released the August 2007 Tucson Real Estate statistics on Friday and the numbers look surprisingly promising in some areas compared to previous months. The good news is that the average sales price increased as did the number of pending contracts, but on the downside the average Days on Market increased and the number of units sold decreased significantly. It appears that maybe the recent frenzy within the mortgage industry has made some consumers weary to buy, but the increase in Pending contracts shows that there still is some confidence in Tucson's Real Estate market.

Tucson Home Sales Units - The number of homes sale's units decreased by 26.2% from 1,381 in August 2006 to 1,019 in August 2007. Tucson saw a 7.2% decrease in home sales units from July to August 2007.

Tucson Average Sale's Price - Tucson Real Estate saw a 2% increase in the Average Sale's Price from $268,408 in August 2006 to $273,932 in August 2007. Also reflected is a 1.9% increase in the Average Sale's Price from July to August 2007. This is great news for home sellers that have grown frustrated with recently declining prices.

Tucson Home Average Sale's Price August 2007

Tucson Pending Sales Contracts - While Sales Contracts Pending in Tucson increased by 14.7% from 893 in August 2006 to 1,024 to August 2007, there was a sharp decline in Pending contracts from July to August of this year. The number of Pending contracts in August 2007 (1,024) dropped by 42% from those pending in July 2007 (1,777). The decline comes in the aftermath of a nation wide "Mortgage Meltdown" that's been front page news for several months. Though the low August numbers for Pending contracts is typical in the Tucson market, the recent widespread media attention regarding mortgage problems might be playing a stronger role in consumers decisions to buy real estate.

Tucson Active Listings - Slowing home sales might be affecting homeowners decision to sell, as Tucson saw fewer active listings in August 2007. The number of Tucson Active Listings decreased by 4.75% from 9,401 in August 2006 to 8,954 in August 2007. Still the number of Active Listings in August did increase 3% over July's Active Listings. This corresponds to the increase in Tucson's Days on Market.

Tucson Average Days on Market - The Average Days on Market in Tucson also increased to 69 in August 2007, up 30% from the August 2006 average of 53 days. August's average days on market also represented a 6% increase over July's average day's on market, which was 65.

Tucson Average Days on Market August 2007

Tucson's real estate market is seeing some signs of improvement as sales prices seem to be slowly inching upwards and more homes are receiving offers. Still, as the days on market continues to increase and the mortgage fallout intimidates buyers, home sellers are realizing that they must be patient and price accordingly up front to be successful in Tucson's current real estate market. As Tucson moves into its "busy season" for real estate, it will be interesting to see future real estate stats. If future sales continue to follow past trends, Tucson can expect to see a small increase in home sales prices and a slight increase in days on market. Only time will tell!

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Outdoor Living Spaces the Newest Luxury

Even though the real estate market has slowed and the stock market is unsteady, it seems that homeowners are still spending away, just on different things. I've spoken to a lot of homeowners that are skipping the vacations this year and putting money into home improvements, or more specifically, outdoor kitchens. Outdoor living spaces are the hottest trend in home improvement, and it has the potential of being the ultimate luxury and convenience. Arizona's Fall, Winter and Spring months provide cool evening temperatures that create the perfect climate for dining "al fresco" with family and friends, and it's never too cold to enjoy your morning coffee and newspaper relaxing in the luxury of your own back yard. It is however easy to go overboard when creating a space for outdoor entertaining, and it goes way beyond the now so common swimming pool and spa. Homeowners are adding items including built in BBQ's and cook tops, fireplaces, water features, outdoor heaters, and televisions. If you really feel like indulging you can even install an outdoor dishwasher. And you can't forget the cozy furniture and ambient lighting to give the space real atmosphere. Creating an inviting living space outdoors not only creates envy from your neighbors, it also adds value to your home. It's easy to understand why homeowners would chose to invest in enhancing their outdoor living space when it's a feature that can be enjoyed year round.

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NoRTH Restaurant; A Personal Favorite That Never Fails to Deliver

One of my favorite places to dine in Tucson will always be NoRTH restaurant in La Encantada shopping mall. Serving contemporary Italian in an open dining area that overlooks the city lights, NoRTH has got quite a reputation and following. It is the "hot spot" for those living the in Foothills, and has an urban feel that attracts those looking to "be seen". NoRTH serves both lunch and dinner, and prices are reasonable, with lunches ranging between $7 to $15 and dinners ranging from $12 to $30. Dress is casual, but I would say "Foothills casual" which means many of the people dining there are dressed to impress. If you plan on visiting on the weekend I would advise making a reservation as it can get very busy, particularly the bar area which seems to be the local after work favorite for the young business professionals in the area. When we visit NoRTH we enjoy sitting at the bar as seating there is open to the interior and exterior of the restaurant, making it a great place to pull up a chair and just people watch. They have a great wine selection as well as a martini menu and everything else you can think of. The dining room is beautiful but the tables are placed close together so be prepared to learn everything you ever wanted to know about those sitting next to you. The noise level is loud most of the time so it might not be the greatest place to dine if you're planning on an intimate conversation. Now to the food....

Unfortunately I tend to stick with those foods I really enjoy and never experience the full menu, but at NoRTH I have ventured out and found I like pretty much everything. I almost always start with the Spinach salad, which is sprinkled with goat cheese and tossed in a Pancetta vinaigrette. I was really lost when there was a national recall on spinach this last Spring and I couldn't get my Spinach salad! If I'm not in the mood for the salad I will get the Calamari, which is served on a bed of Arugula that's been tossed in a lemon vinaigrette. It's incredible, that's all I can say. For those afternoons when we're eating light my husband and I will split a pizza, and I have to say they are about the best in town. The crust is very thin and slightly crisp, and North has some unusual combinations that are pretty incredible. If I'm really hungry then I have the difficult decision of choosing between the Chicken Parmigiana and the Short Rib "Osso Buco". The chicken, a huge moist breast that's served golden brown and slightly crispy, is topped off with fresh tomato marinara and mozzarella, and few butter rigatoni to accent. Every time I've had the chicken it's been incredible. The Short Rib "Osso Buco" is my comfort food; I feel guilty and peaceful every time I take a bite. And the white polenta that is served with this dish is the perfect compliment to the rich and slightly tangy sauce. If I'm feeling healthy I get the Salmon with roasted squash and sweet onions, which is delicious, but I'm partial to my comfort food. Deserts....well I have trouble getting to that course most of the time. They have the standards such as Tiramisu, Cheesecake and Creme Brulee. The few items I've had have been mediocre, but I'm VERY picky when it comes to dessert. You just got to try everything and see what you like.

Everyone I have referred to NoRTH has had a great experience. It's a lively and chic atmosphere that consistently provides great food and service. If you live in Tucson or are just visiting, I recommend stopping by NoRTH and checking it out. Who knows who you might see!

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Pinal County Grows as Does Inventory of Available Homes

Though Pinal County was recently recognized by the US Census Bureau as one of the nation's fastest growing counties, the slow down of the real estate market has left a large inventory of homes in this area. The statistics provided by the Census Bureau measured the number of new homes or apartments that were built between 2005-2006, right at the tail end of the housing boom in Arizona. The sudden surge in buyers during 2004-2005 encouraged the construction of new homes by builders hoping to ride the wave. Very little land was available for new home developments within Pima County, which encompasses most of Tucson, so builders were forced to begin construction farther north into Pinal County. Between 2005-2006 the number of new housing units in Pinal County increased by 17%, compared to the 3% increase in Pima County. During the market surge buyers were eager to find affordable housing, even if the homes were slightly farther from services and amenities. New home construction was strong in these areas, which included Gladden Farms, Black Horse and Eagle Crest. As the market has slowed and the housing inventory has increased, these same developments are suffering from lack of interest. All three developments have had a large amount of inventory available since the beginning of 2007, and now that more homes are on the market throughout Tucson, buyers have a choice and they choose to live closer to city, even if they pay a little more. Homeowners in these areas are in a bind and willing to negotiate to sell, so it's great for the buyer that plans on holding on to the home for several years. As more hospitals, shopping and other services become available in these areas, interest and prices will begin to rise.

For more information regarding these stats you can read the full article on AZStarnet

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In Memory of those Lost

No Real Estate posts today. As this is the anniversary of the September 11th tragedy, I thought it best just to note that my thoughts and prayers are with all those that lost loved ones six years ago. Makes you think about who and what is really important. Best wishes to everyone.

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Is Home Equity Overused?

The September 6th edition of USA Today had an interesting article about home equity (or lack of it) and the "dependence" homeowners have on it. One of the great features of owning a home (other then the tax deduction) is the equity one has in it. From 2003 thru 2005, Tucson and much of Arizona saw a huge jump in property values and home appreciation. Many home buyers, myself included, were lucky enough to buy at just the right time and in just the right place, and then BAM....instant equity. It's great knowing that the home you bought has doubled in value over two years, but it's also dangerous for those that don't have the strongest control over their finances. If your local real estate market continues to see appreciation, then great; spend to your heart's content without worrying. But today's housing market has slowed considerably, and home appreciation is not what it was a few years ago. Too many homeowners are still using their home's equity to pay off high interest bills without restructuring their spending habits, or are buying expensive luxury items and trips when their equity is fading away. They're putting themselves further into dept with no "escape hatch" in site.

Now I do think that a home equity loan used wisely is a great thing. Why not pay off the high interest credit cards when you can get a lower rate, or consolidate loans with a home equity that's tax deductible. That's a no brainer. It's also great if you want to add a pool or landscape the backyard; anything that will add value to your home. And I don't think it's a bad idea to have a HELOC in case of emergency. I've even seen individuals buy new vehicles with their home's equity (although I'm not sure how I feel about that; what would Suzi Orman say?) But now it seems that it's gotten out of control, and many homeowners rely on their home's equity to pay their bills. According to a report by CardTrack , from 2000 to 2006 the average credit card debt increased from $7,842 to $9,659. Still today a large number of homeowners are paying off these credit card balances with home equity loans on their homes. Unfortunately once the balances are paid, many homeowners continued to make purchases, charging the cards right back up to their limits. Creditcards.com reported that more then one-third of credit card holders acknowledged using their cards for purchases they can't afford. The problem here is that home equity is shrinking away as the nation's current home values remain flat or drop, leaving homeowners without a way to pay off these debts. Amazing that credit card debt is rising when a consumer poll done by Lending Tree found that 48% of Americans are uncomfortable with the total amount of household debt they have.

If so many homeowners are uncomfortable with the amount of debt they have, why does it continue to grow? Sure there are emergencies that require some to utilize their equity, and others consolidate all their loans to make paying off debts easy. But I do think that a lot can be contributed to the consumers desire to live in the here and now. Who knows what tomorrow will bring, so let's enjoy today. We're are all guilty of thinking like this from time to time. But we have to draw the line between enjoying life and balancing our finances, and sometimes it's a hard line to draw. Buying that special item or vacation we really want with a credit card is alright, but relying on our home's equity to ultimately pay for it every time might not be the best decision in the long run. It's important to remember that unsecured credit card debt an be erased, but filing for bankruptcy is not going to erase a home equity loan.

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Retirement Communities Keep Tucson Home Sales Strong

Just saw an interesting real estate related story on the evening news on KOLD . The newscaster noted the real estate slump that's being felt across the nation is not as evident here in Tucson, and the explanation behind this is the large number of retirees that purchase homes in the Tucson area. Most real estate professionals in Tucson already know this as we have all introduced at least a few home buyers to some of our area's beautiful Active Adult communities. Approximately 35% of home sales are attributed to retirees purchasing in the area. This news is not at all surprising as Tucson and Phoenix both have a large number of age restricted communities with numerous amenities that attract residents from near and far. Sun City and Saddlebrooke are two of Tucson's top retirement communities, and are located in Northwest Tucson. Active Adult communities are extremely popular as they have EVERYTHING available within the community; there's no need to leave unless you need food! Both Sun City and Saddlebrooke have beautiful golf courses, community pools, tennis courts, exercise facilities, arts and crafts centers, numerous club houses; there's just too much to list! And is there a more practical mode of transportation within these communities then the golf cart? I think not. As you drive you'll see golf cart crossing signs everywhere, so be careful and look both ways before you turn!

Though sales in the Tucson real estate market do appear to be a bit slower then in the past two years, home sales in Sun City and Saddlebrooke seem to be right on track with previous years. Most home buyers that are considering these communities don't have many obstacles holding them back. A large percentage of retirees pay cash for their homes, so getting a loan is not a problem. Often it's a matter of making the move away from where they've spent much of their lives. The Arizona climate is a big draw as the warm, dry weather seems to be a cure all for many ailments. And the weather in Tucson is just a lot nicer then the weather you'll find in other parts of the country. No cold winds or icy driveways to slip on; just green golf courses and gorgeous sunsets!

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The Resurgance of the Short Sale

I'm seeing more and more information about Real Estate Short Sales and their resurgence in the past few months. Neither the real estate community nor consumers have seen much about this type of transaction since the real estate market has been so good in past years. But now all that's changed. As a record number of homeowners continue to struggle to make their mortgage payments, low property values make it impossible to refinance or sell, and foreclosure has been their most likely option. According to a report by the Mortgage Bankers Association, the number of Americans receiving foreclosure notices hit a record high this past Spring, with .65 percent of mortgage holders starting the foreclosure process in the second quarter of 2007. Short Sales are becoming a popular alternative to foreclosure for homeowners that are in a bind but want to avoid the financial and emotional impact that foreclosure will have.

Short Sales are actually very similar to a typical real estate transaction -

- Seller puts home up for sale

- Buyer makes offer on home

- Seller and Buyer agree to price and terms and are under contract

This is where the transaction changes. In a Short Sale, the lender must agree to take less then is owed for the mortgage if there is a proven hardship. It may sound crazy; agree to take less then the owed amount? Not so crazy when you see that lenders can lose up to 50 percent of the amount due in a foreclosure, so it's likely they're going to be more eager to use a short sale to handle the situation. Still, Short Sales require a lot of extra documentation, and did I mention proven hardship? Basically you need to prove that you're flat broke, which can be hard to do when you're up against the banks. And you do need to have a firm offer on the home before you can even address the possibility of a Short Sale with your lender. This in itself is difficult in today's sluggish market, but seasoned real estate investors are in search of "smokin deals" so there is some demand. Also, a Short Sale is not inexpensive. You'll need a real estate agent to handle the home sale, an attorney to negotiate with the lender, and a tax professional to help clear up all confusion and explain the repercussions. Simply put, a Short Sale is not for the faint hearted, but it may be some homeowners only alternative.

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Rain Gutters in Arizona?

So many of my past clients have laughed when I've mentioned that some homeowners in Tucson really do install rain gutters on their homes, I just felt the need to mention here! Although Tucson averages about 325 days of sunshine a year, as you'll read in my past weather blogs we do get some heavy rains in the Old Pueblo.

Heavy rains in Tucson and other desert areas can easily cause flash flooding as the density of the ground prevents rain from being absorbed (as you'll see happening in my front courtyard area!) We're near the end of the desert's summer monsoon season, but we're awaiting the remnants of Hurricane Henriette, which should bring storms to Southern Arizona over the next few days. Another reason I'm glad we just had rain gutters installed. I actually hear rain on the roof right now. Better go check out the new gutters to see how they're working!

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Answers From a Mortgage Pro

The mortgage and lending industry is making headlines every day now, and consumers are being overwhelmed by the news that's brought to them. Buying a home can be stressful, but obtaining a loan for the home can be even more difficult and confusing for some consumers. It seems that many home buyers (and some real estate agents) have a lot of mortgage related questions but are afraid to ask anyone for help. For this reason I decided to "pick the brain" of a professional mortgage consultant I know, and get answers to some of those common mortgage questions. Perry works with Wells Fargo Home Mortgage, and he's agreed to be my "Answer Man". My plan is to provide a regular question and answer feature every few weeks. We are going to start off with the basics; I know that most real estate agents are already familiar with this information, but there's nothing like a refresher course! And this information is helpful to all those potential home buyers. Anyway, here we go!

Do I need to be Pre - Qualified for a loan before I begin my home search?

You should get Pre-Approved, not just Pre-Qualified. There are important differences for both you and the seller.

A Pre-Approval Letter is a written commitment from a lender, subject to a property appraisal and certain conditions, that lets you know exactly how much home you qualify for. The power of this document is that it authenticates that you are a viable buyer and tells real estate agents and home sellers that you already have your financing lined up and can afford to buy up to the specified amount.

The less substantial Pre-Qualification Letter can be helpful in determining the appropriate price range you should be shopping in but does little else. Because it’s based on basic financial data the buyer provides that has not been verified, it’s not worth much more to a seller than the paper it’s written on. Therefore a pre-qual should be thought of as a minimal first step, a step that’s often better to forego if time allows you to jump directly to the more useful Pre-Approval.

Advantages of being pre-approved

It's a smart move for serious home buyers to get pre-approved and here are some reasons.
Not only will real estate agents perceive you as a serious home buyer, but sellers are much more apt to accept offers from pre-approved buyers. Many sellers only accept offers that are accompanied by a pre-approval or “priority buyer” letter.

Helps you shop confidently because you know exactly how much you can afford.

A pre-approval gives you an advantage over other buyers who haven't been pre-approved, especially if multiple offers are presented.
The mortgage process goes more quickly once pre-approved since much of the work has already been done and the required conditions have been spelled out, giving the buyer plenty of time to comply.

“Not only will you know your housing budget to the dollar before you start looking for a home, you'll also have more negotiating leverage because the seller knows you've already got a loan virtually in your pocket”

Understanding your mortgage options gives you an advantage as you negotiate your home purchase.

Characteristics of a reputable lender

Never before has it been more important to choose one of the few remaining financially solid “Big Boys” as your mortgage lender. The mortgage industry is experiencing unprecedented times. Never have so many long standing companies gone out of business so quickly. Many of the departing lenders literally went out of business overnight leaving home buyers stranded at the closing table with no funds and no warning.

· You can ensure you’re working with a reputable lender by looking to a company with stability, integrity, capabilities and experience.

How does the process work?

Before you begin shopping for a home, call a reputable lender. Wells Fargo, Citimortgage and BofA are probably the only 3 major lenders that stand virtually no chance of going under anytime even remotely soon. Wells Fargo is the only one of those three lenders, the only bank in the U.S., to have the highest credit rating (AAA) from both Moody’s and Standard & Poor’s investor’s service.

How much should I be pre-approved for? It's a good idea to get approved for the maximum amount that you can qualify for (without wildly exceeding what you’re willing to spend) so that you're prepared.

You are not locked into the maximum loan amount. You are able to buy a lower priced home, lower your loan amount, or switch to another loan type. The beauty of having a pre-approval is the flexibility it provides for you and the ability to enter the real estate market with confidence.
fact...sellers are much more apt to accept offers from pre-approved buyers.

A home purchase is an important transaction. That’s why it’s important to work with experts committed to helping you make a smart investment. To maximize your purchasing power, rely on an agent who is a REALTOR® to help you find the right home, as well as a reputable lender to help you secure the right financing.

PERRY (Timothy Perry)
Home Mortgage Consultant
Wells Fargo Home Mortgage
866258-8363 Office
866711-6377 Fax
timothy.perry@wellsfargo.com

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