More buyers are buying as prices keep dropping

Some good and bad news for those homeowners trying to sell right now. The National Association of Realtors reports that existing home sales were up 2% in May, but the median sales price has gone down.

Areas that were hit hardest during the housing bust (like California, Nevada and Arizona) are the same areas that are seeing increased sales. While this is good news for home sellers, prices continue to go down each month. Great news for buyers! The national median sales price for May was $208,600, which is a decline of 6.3% from the previous year. When you look at Tucson's sales statistics for May, unit sales, median sale price and average sales price were down for the same period.

We're seeing more activity in the Tucson real estate market right now; mostly buyers that are out to take advantage of low prices and desperate sellers. Some are investors, others are pre retirement folks that have realized now is the perfect time to find that second home. Many of the buyers I've encountered are paying cash, giving them even more negotiating power. These buyers are slowly helping to balance out Tucson's housing market, but we still have a heck of an inventory to move through before we can really stabilize.

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Foreclosures affecting appraiser valuations

Rising foreclosure numbers are now having a big impact on home appraisers and the property valuations they're making. The Arizona Daily Star featured on article on today's front page reporting that foreclosure are pushing down home's selling prices.


Usually one foreclosure in a neighborhood doesn't have much influence on other property values because they are other comparable sales to measure against. The current real estate market is different; now high foreclosure numbers can't help but impact neighboring property values because these sales are the only comparables around. Fourteen percent of homes sold in Tucson in April were repossessed by lenders. Tucson foreclosure filings in April were up about 40 percent from March, and more then 80 percent from April 2007.

Foreclosures aren't the only thing impacting property values. Some home owners are drastically dropping their prices in order to sell. Many buyers are ready to move if the find a great deal, so the lowest priced homes are selling and lowering neighboring property values. This is not the standard; the majority of home sellers are perfectly willing to hold onto their home until the right deal comes along. But many will be holding onto their homes for a long time if they expect to get the price their hoping for.

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National home prices seeing sharpest decline in two decades

The latest data from Standard & Poor's/Case-Shiller shows that national home prices have fallen at the sharpest rate in two decades. S&P reported a 14.1% decline in the first quarter of 2008 compared with a year earlier.

According to S&P the areas reporting the biggest declines are those that grew the most in the recent real estate boom. Las Vegas leads the pack with 25.9% annual decline. Phoenix came in third with a decline of 23%.

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Fallin hard, but not too hard

Yikes! Arizona homes prices are dropping faster then ever according to figures from the Office of Federal Housing Enterprise Oversight. The value of an average home in Arizona slid 5.5% in the first quarter of this year compared with the same period last year.

At least Arizona didn't rank number one in the list. Florida homes lost 8.1% of their value, while Nevada saw a 10.3% decline and California saw a 10.6% decline.

Tucson home values didn't see quite the decline that Arizona saw overall. Year over year values in Tucson are down 2.9%, with a single quarter drop of 2%. Phoenix saw a big drop of 6.7%. Still puts Arizona home values up more then 72% over the same period five years ago, so homeowners that bought around 2002-2004 should have quite a bit of equity.

OFHEA has a great little graph that shows the trends in Tucson property appreciation

Read about Arizona home prices falling at record rate

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Gas prices dictate where buyers buy

It's not surprising that gas prices are affecting where home buyers are looking at homes. Back in the day when Tucson saw it's real estate boom (2003-2006) buyers were venturing out to the farthest corners of our city in their property searches. Homes in the outlying areas were cheaper then those closer to the city, so they were being snatched up while the gettin was good. Now many of these same outlying areas are saturated with home inventory because 1. Nobody wants to drive that far when gas is so expensive, and 2. There's just too much inventory closer to Tucson and all it's amenities.


Areas struggling with this issue include Vail and Sahaurita. During the height of Tucson's real estate market, both areas attracted buyers who either wanted to or had to spend less then what current prices in town were (drive til you qualify). Each area offered new construction homes at relatively dirt cheap prices, so buyers flocked to these sites because of their affordability. Unfortunately these communities were and still are considered isolated by some due to the lack of amenities close by.

Increased gas prices are going to continue to have some impact on where buyers are choosing to live, but areas like Rancho Sahaurita will most likley remain steady due to affordability. Tucson home prices have continued to drop over the last few months, but Sahaurita still offers new homes at prices that can't be matched closer to town.

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Median home prices drop nation wide

Looks like the nation's median home prices fell hard during the first quarter of 2008. According to a report in USA Today, median home prices across the nation dropped 7.7% from Q1 2007 to Q1 2008. Sixty-seven percent of the 149 metro areas reviewed saw price declines, the highest declines since NAR began recording data in 1979.

The Western states seem to be struggling the most, suffering an average 12.3% drop in median home prices where overbuilding, sub prime lending and speculation were most prevalent.

According to the data, Tucson's median home price in Q1 2008 fell 8.8% from Q1 2007.

Median home prices in reviewed metro areas

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Arizona in a recession

Several Tucson newspapers are are reporting what so many Arizona residents already know; our state's in a recession. According to Moody's Economy.com, Tucson is in worse shape then Phoenix.

The sluggish housing market seems to be having the biggest impact on Arizona's economy. As foreclosures continue to rise at record numbers and housing related employment continues to fall, the Arizona economy continues to drag. Higher food costs and gas prices are also playing a major role, leaving consumers struggling to make ends meet.

Just driving through Tucson it's easy to see the impact the economy is having on local businesses. Several furniture stores have closed their doors, while others are offering discounts and promotions ot bring consumers in. A number of retailers specializing in womens high end fashions have closed, and several fine restaurants are trying to entice diners with drink and dinner specials. A clerk at a local grocery store told me that more people are using coupons, and I've spoken to several people trying to conserve gas by scheduling all their appointments in one area on a single day so they avoid driving too much.

Many Arizona economists feel that Arizona hasn't hit rock bottem yet. Until the housing market re adjusts our economy isn't going to be able to recover. Some speculate it could be 2-3 years before that happens.

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Condo loans could be difficult to get

Looks like refinancing or getting a loan for a condo purchase is going to get tough. Underwriting changes by Fannie Mae and Freddie Mac as well as new restrictions by private mortgage insurers are going to limit the number of loans available for condo purchases.


Kenneth Harney, a nationally known columnist on real estate, reported that many private mortgage insurers will no longer write coverage on condominiums in hundreds of areas across the country that are designated as having declining markets. Even in parts of the country where real estate markets are healthy there are going to be difficulties. Buyers will be required to put a least 10% down, and if the condo project's ownership is made up of more than 30% investors then all buyers loan applications will automatically be turned down. Buyers with 20 % or more down will avoid paying PMI so they won't be affected with the new restrictions.

These new procedures are going to be time consuming for lenders as they're going to require a lot of research on condo project characteristics. Legal documents, condo association operating budgets, percentage of unit owners that are late in association fees, and percentage of units owned by investors are just a few of the areas that will need to be investigated in order to insure a new loan. On top of that lenders are going to be required to warranty their research. Fannie Mae said the new procedures are designed to "protect borrowers and manage increased credit risk in the market".

Tucson's condo market could be seeing some hard times ahead. In the last few years several Tucson apartment complexes were converted into condominiums. Needless to say we have a lot if condos in the Tucson area. As of today there are about 150 condo units for sale in North Tucson alone. The new restrictions could have a big impact on local condo sales. It's going to be interesting to see the sales numbers over the next few months!

Securing a loan for a condo might become even tougher

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Poll shows fewer people plan on buying homes

According to a poll conducted by the Associated Press-AOL Money & Finance, a growing number of Americans are stressed about the current state of the real estate market, and it's impacting their decisions about real estate purchases. Not at all surprising when we see that gasoline and food costs are continuing to climb, forcing many homeowners to make some cold hard decisions about what they can and can't afford.

Almost sixty percent of those polled in this survey said they definitely won't be buying a home in the next two years. More then a quarter of the homeowners polled said they worry their home will lose value over the next two years, and one in seven mortgage holders are afraid they won't be able to make their mortgage payments on time over the next six months. These statistics are pretty overwhelming but they say what everyone already knows; people are unsure and scared of what the future holds. Moving to a new home is a luxury for many, and with gasoline prices starting over $3 a gallon, it's a luxury that more people are putting on the back burner.

As everyone knows, real estate markets vary by area. Yes Arizona is seeing some tough times right now, but it's not as bad here as it is in much of the country. Though the average sales price in Tucson was down about 1% from February to March, home sales increased 26% over the same period. We're still seeing a high number of foreclosures; one in 264 Arizona homes received foreclosure notices in February. Many of those were investors that bought with the intention of "flipping" the property, financed most of the home's purchase price and are now stuck with an extra mortgage they can't afford. Some were borrowers that just bit off more then they could chew. Whatever the reason, the large number of foreclosures are slowing down the rest of the local real estate market. Until the inventory of foreclosure homes begins to shrink, Tucson's resale market will continue to drag behind what it once was.

Right now most of my clients are buyers searching for second homes, hoping to find a place they can eventually retire in. These individuals don't need to sell in order to buy, which is the perfect situation to be in. There's great inventory out here right now, with just over 2000 homes available in NW Tucson alone. It's a great time to take advantage of our local market and buy while many home sellers are willing to negotiate any deal they can in order to sell. Deals are out here if your persistent, and buyers are in the driver's seat

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Arizona foreclosure stats for January

I'm a little late with January's foreclosure statistics, so here goes... RealtyTrac reported that foreclosures were on the rise again in January; the nation saw on an 8% increase in foreclosures from December 2007, and a 57% increase from January 2007. Once again Arizona ranks in the top ten of highest foreclosures rates, coming in at number 4.

Arizona saw a 19% increase in foreclosure filings for January, but it's down from December 2007's increase of almost 32%. The state reported foreclosure filings for 9,059 Arizona properties during January. Although there were 1000 more Notice of Trustee sales (NTS) then in December, there were fewer Notice of Defaults (NOD) and Real Estate Owned (REO) properties.

First American CoreLogic released it's quarterly forecast and reported that the Foreclosure Index rose by 22% from a year ago and is currently at it's highest level in six years due to delinquency and default of home loans originating during 2005-2007.

According to the Corelogic forecast home prices have declined more then 5% nationaly, and are down 2.4% from a year ago. Home price declines are gaining momentum; and some cities are seeing double digit declines. Pheonix saw a decline of almost 11.5% in home price appreciation.

There is a strong inventory of homes available in Tucson. I've been contacted by a lot of people that are looking for great deals right now because of all the media hype about our sluggish real estate market. It's a great time to buy if you're looking for an investment and don't need to sell. Buyers are having more difficulty obtaining loans so the competition is not as strong as it was a few years ago. Still anyone interested in buying has got to have their finances in order before they start their search. If a home is in great condition and listed at a great priced then it will sell quickly, even in today's market. That's why it's better to have all your ducks in a row; then you're ready to buy when you find the home that's right for you.

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Tucson home price declines not as significant as some

The latest report by the Office of Federal Housing Enterprise Oversight (OFHEO) shows Arizona home prices are dropping fast. Arizona saw a 1.21% decrease in home prices in the fourth quarter of 2007, and home values dropped an average of 2.4% for the entire year.

While Phoenix was hit hard, Tucson saw better numbers. The Phoenix metro area suffered priced declines of 1.8% for the fourth quarter and 3.42% for the year. Tucson home values saw a small increase of .31% for Q42007, and a minimal decrease of only .01% for the year. When you compare these numbers to each of the cities appreciation over the last five years, the decreases are really insignificant. Phoenix saw 82.76% appreciation and Tucson saw 71.65% appreciation since 2002. The national average for appreciation over the last five years was only 41%, so Arizona as a whole is way ahead of the game.

Although this report shows that the real estate market as a whole is suffering, Tucson fairs on the better end. Tucson is a destination city that draws in large numbers of new residents each year. Local homeowners that purchased before 2003 and plan to hold on to their homes for awhile should still see a large amount of appreciation (as long as they didn't max out that equity!) For those that bought during the real estate boom of 2003-2006 and had planned on selling in the next year or so, think again if you want a profit. 2008 is going to be a tough year for real estate, in Arizona as well as the rest of the nation. If you don't have to sell in the next year or so, DON'T! If you're patient and can ride out the wave you and your pocketbook will be much happier!

See the full OFHEO report regarding widespread house declines in Q42007

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Tucson Real Estate Sales Statistics for January

Just got the latest Tucson Real Estate Sales Statistics for January (seems like they're coming out later and later each month). Looks like everything but Pending Contracts was down from January 2007, but some areas showed increases over December 2007.


Let's just get down to the facts -

- Tucson's average sale's price for January was $266,450, a 2.4% increase from December 2007's average sales price of $260,196. (I'm having trouble with my graph but I will include it as soon as I can fix the problem)

- Tucson's median sales price for January '08 was $203,500, a 3% decrease from December's median price of $210,000, and a 7.65% decrease from January 2007's median price of $220,365.

- There were 1,079 Pending contracts in January 2008, an increase of 35% over the number of Pending's in December (799). It's also a 25% increase over the number of Pending contracts in January 2007 (863).

- The average days on market increased to 83 in January 2008, a 9% increase over December and a 22% increase over January 2007.

Tucson Average Days on Market January 2008

- Tucson had 9,168 Active listings in January, a 5.3% increase over December's number of 8,708, and a 6% decrease from January 2007 (9,742).

- Tucson saw 3,744 New listings in January 2008, a huge increase (135%) over December 2007, but a 7% decrease from January 2007. Everyone waits until the holidays are over to sell their homes!

- The number of units sold in January increased by 15% over December's number of 682. It's still a 36% decrease from January 2007.

Tucson real estate usually picks up in late Winter/early Spring when the weather is great here and horrible everywhere else. The last two months I've been swamped with visitors looking for second homes. Most of these people plan on buying something now and using it for vacation purposes short term, then retiring in it later.

Several of the major events in Tucson are scheduled in January and February; the Tucson Gem and Mineral Show and Accenture Match Play golf tournament. Many of my clients have been visiting these events and decided they want to purchase in Tucson while it's a buyers market. There's a great inventory of homes right now, and sellers are willing to negotiate. It you don't need to sell a home to buy another then you're in an ideal position right now.

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Arizona real estate predictions

More predictions for the Arizona real estate market! Local economist Elliot Pollack gazed into his trusty crystal ball and came to the conclusion that Arizona's real estate market hasn't hit rock bottom yet.

Some of the reasons aren't so mysterious; fewer new jobs and slower population growth. According to the latest Blue Chip job growth update by Arizona State University, Arizona's job growth dropped from 4.9% in November 2006 to 1.9% in November 2007. Arizona's population increased by 2.8% in 2007, down from a 3.6% increase in 2006. The fact that lenders have gotten much stricter is also a big factor. There are a lot of interested buyers that have great credit but just can't get the kind of financing they're hoping for. Tighter lending practices are attributed to shrinking the Phoenix buyer pool by 20%.

Pollack predicts that Arizona's real estate market won't bottom out until late 2008, early 2009. He expects a full recovery to take three to five years. This means we can expect more foreclosures and lower home prices.

Recently I've seen several articles and interviews with local real estate professionals predicting that Tucson's housing market will make a comeback in 2008, but I personally feel that we're not likely to see a big improvement until early 2009. Though we're continuing to see high foreclosure rates and falling prices, the Tucson market is still much better then the rest of the nation. Unfortunately I think there's still more room to fall and we'll see this play out during 2008. New home builders are slashing prices to bring in buyers, and resale home sellers are dropping prices to compete. A huge number of adjustable rate mortgages are "re adjusting" this year, making it difficult or impossible for some home owners to afford the payments. This will most likely lead to an increase in foreclosures. I don't want to be a pessimist, but I think we should look at the reality of what we're up against. Let's just hope I'm wrong and everyone can tell me they told me so!

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Tucson Real Estate sales statistics for December

Tucson's real estate statistics for December 2007 were just released and as expected the numbers are down from November's. The average sales price, median sales prices, number of home sales and number of new listings were all down, while Pending sales and the number of days on market was up.

- Tucson's average sales price for December $260,196, down 3.8% from November's average of $269,968. It's also a .4% decrease from the average sales price in December of 2006.

Tucson Average Sale's Price for November

- Tucson median sales price for December was $210,000, down 1.5 % from November's median price of $213,000. This number was also a 2.3% decrease from December 2006's median price of $215,000.

- There were 799 pending contracts in December, down 14% from November's number of 910, but up 17.84% from December 2006's number of 678. Pending sales have actually been on the rise over the last several months, yet the number of closed sales continues to go down. The Arizona Daily Star featured an article about this last week, and attributed this discrepancy to many new home builders seeing cancellations before the homes are complete. The fact that a lot of potential buyers can't get financing is another possible cause. Although a home may receive an offer and go into escrow, the deal might fall through if the buyer can't lock down a mortgage.

- The average days on market for December rose to 76, up 5.5% from November's number of 72, and up 19% from December 2006.

Tucson Average Day's on Market

- Tucson had 8,708 Active listings in December, down 6% from November's number of 8,518 but up 2.23% from December 2006.

- Tucson saw 1,590 New listings in December, down almost 40% from November's number of 2,224 and down 11.17% from December 2006.

- The number of units sold in Tucson during December was 682, down 11% from November's number of 759 and down a whopping 30.5% from December 2006's number of 981.

These sales numbers are not surprising considering the time of year. Though Tucson is beautiful in December, it's the holiday season and most homeowners aren't interested in selling while they have all the decorations up and the gifts under the tree. Potential home buyers were spending their money on gifts and food rather then homes. With the current state of the nation's economy, more people are just holding on to their money right now and looking for a great deal.

I myself am already starting to see a swing; there's a lot of people poking their heads out and asking questions about available homes. I'm really seeing an interest from second home buyers right now. The hectic holiday season is over and there's a huge inventory and some great deals to be made. Many out of state residents are beginning to jump at the opportunities in front of them. Can't wait to see what January's sales stats will hold.

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Tucson sales statistics by area

Just wanted to post the Tucson real estate sales stats by area before everyone heads out for the holiday weekend. Sales prices were mixed over the city, with some areas seeing declines and some seeing increases from September's numbers.

Comparing the average sales prices by area, Extended Southwest Tucson saw the biggest decrease, down 19% from September to October. East Tucson wasn't far behind with a sales price decrease of almost 16%.

The extended portion of NW Tucson saw the biggest increase in average sales price; up 40% to an average price of $221,689. This increase is a little misleading; when you look at the sales stats for this area you'll see that only five homes sold in XNW Tucson in October, the highest priced being $385K. In September the were 8 homes in XNW Tucson that sold, most priced below $200K.

Central Tucson also saw a sizable increase, up 16% from September's average sales price of $187,751 to $233,689 for October. This number is a little misleading as well; one home in Central Tucson sold for $1.1 million while about half of the rest of the homes sold for less then $210K.

Northwest Tucson saw a 2% decrease in average sales price for October; not too bad considering this area has the largest number of active listings at 2460.

Tucson Average Sales Price by Area for October

Although Tucson's overall Average Days on Market for October decreased to 70 from 73, parts of the city did see significant increases for the month.

Tucson Average Days on Market by Area

Once again NW Tucson had the highest number of Active listings at 2460, while Central fell into second place with 1159.

Tucson Active Listings by Area for October

I don't have much to comment about (my mind is occupied as I'm thinking about turkey and sweet potato pie). We'll just take it one day at a time and see what the future holds for Tucson real estate.

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Explanantions for increase in Arizona foreclosures

As our nation continues to see an increase in foreclosure rates there are still a lot of people asking "What's causing it?" Basically it all comes down to loan problems. Sure the housing slump plays a role, but the current state of the real estate market only escalated an already existing problem. The loose loan standards of several years ago increased the potential for problems. We can't play a blame game here; lenders did provide the loans but buyers were the ones signing on the dotted line. The emotional rush that came with the 2004-2005 housing frenzy was just too overwhelming; many of those individuals felt they had to get in on the action and by a home then and there.

The American dream is to own a home, and in the first part of this decade a large number of people were able to make that dream come true. Unfortunately many potential buyers went out on a limb and overextended themselves to obtain their dream, and now it's coming back to bite them in the form of loan default. Some of the reasons for foreclosure increases include

- Lending guidelines, which have changed quite a bit in the last decade. Back in the day home buyers were required to put 20 percent down, have a stable income and great credit to obtain a loan. In the last decade all that changed. Lenders loosened their requirements on credit standards so buyers could obtain loans with no money down, lower credit scores and less income. Many buyers were purchasing more then they could afford, resulting in increased defaults.

- "Bad" mortgages, as I'll call them, are a significant reason that so many homeowners are defaulting. These include adjustable rate mortgages (ARMs) which offered low minimum payments, encouraging buyers that might not have otherwise pursued or obtained loans. Though their initial payments may have been low, the loan balance continued to rise, and now interest rates on those loans are resetting at higher rates.

- Home equity is also a contributing factor. Arizona as well as many other states saw huge gains in appreciation in 2004-2005, and many homeowners took advantage of it by cashing out their home equity. Unfortunately there are now a large number of homeowners that owe more then their home is worth, and they can't come up with the funds to make monthly payments.

- Bankruptcy change in 2005 . In October 2005 the Bankruptcy Abuse Prevention and Consumer Protection Act went into effect, making it more difficult and expensive for individuals to file bankruptcy. In the past homeowners would file bankruptcy to avoid foreclosure, but the new act makes foreclosure an easier option.

- Declining housing prices will continue to impact foreclosure rates as they feed off the other factors listed above. Homeowners that obtained creative financing like the popular "interest only" loans are finding that their home's value is less then what they owe due to an increased loan balance and the drop in housing prices. Those homeowners that maxed out their home equity are facing the same obstacle.

Only time will tell what will happen with foreclosure rates in Arizona and the rest of the nation. Stricter lending guidelines are already in affect, which is a step in the right direction. As the holiday season get's underway it will be interesting to see the impact our national foreclosure rate and the housing slump will have on consumer spending.

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Arizona ranks 7 in top foreclosure states

Arizona again made the top 10 list for states with the largest foreclosure rates according to a third quarter analysis done by Realtytrac. Arizona ranked in at number 7, with Nevada and California taking first and second place.


National foreclosure rates were up 30% for 2007's third quarter, with 635,259 foreclosure filings nationwide. This amounts to about one foreclosure filing for every 196 households for the quarter. Arizona reported 22,750 foreclosures for Q3 2007 , about one foreclosure for every 112 households in the state. It results in a 44% increase in foreclosures from Q2 2007, and over a 200% increase from third quarter 2006.

Looking at the map below it's easy to locate high foreclosure areas (think pink!) Both coasts seem to be carrying the brunt while the Midwest appears to be holding steady, other then Michigan and Ohio (Michigan is suffering through one of the worst housing markets in the nation). It's evident that states that saw an explosion of population and real estate growth in 2004-2005 are the same ones that appear to be suffering right now.

Each time we review new foreclosure statistics we ask the same questions, what's causing it? There are several contributing factors, and most are a result of the credit crunch we continue to experience. So as not to drag this blog out I've added a separate blog to describe some of the reasons behind the current explosion in foreclosures.

For more information about Arizona foreclosure statistics

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Worries about Tucson's downtown revitalization project

The revitalization project for downtown Tucson, also called Rio Nuevo, has been in the works for about 8 years now, but the city has yet to see any real progress. In fact, it's now almost a joke amongst most Tucsonans who are wondering if the project will ever get off the ground. I recently visited St. Louis MO with my husband and we stayed in the downtown area where they're also undergoing a revitalization effort. After checking out the progress and talking with the locals, I began to wonder about Tucson's revitalization project and if we'll ever see any progress.

Downtown St Louis was presented to me as a place to stay away from once it's dark. The crime rate is high according to news reports and statistics, and even my neighbors who've lived there. The area's only source of traffic comes from those that work downtown, and they leave when they finish their work day. Needless to say I was a little worried about walking around downtown. Once we arrived we took a few short treks on foot just to see what it was like, and we were amazed to find that the entire St Louis downtown area is undergoing redevelopment. There's major construction everywhere, from retail and restaurants to lofts, lofts, lofts galore. I was extremely impressed at what I saw in the lofts being developed, but I could tell that most of the completed units were vacant. The landscape in the downtown area was beautiful considering it was cold and rainy; obviously someone is working hard to maintain the look of the area. With all the construction going on, we still saw very few people on the streets; not a lot traffic other then workers coming and going from jobs. We learned the most about the revitalization project from a bartender we chatted with one evening. She said the the city has big plans for downtown St Louis, and the goal is to "urbanize" the area and increase traffic by adding more restaurants, shopping and housing. It was exciting to hear about all the great plans in the works, but considering the project has been underway for 10 years so far and they expect another 15-20 before completion, I began to worry about Tucson's own downtown revitalization project.

The goal of Tucson's Rio Nuevo is to preserve and enhance the city's historical and cultural downtown area while adding restaurants, shopping, housing and other attractions. What was once an exciting concept is now leaving many Tucsonans with a sour taste in their mouths. The latest Rio Nuevo update came in October when the Arizona Daily Star reported that the Tucson community is losing faith in many of the proposed projects because there's been no progress. One developer is now under pressure to begin the promised projects but blames the slow housing and credit markets for the delays. Speaking with locals I found that many Tucsonans feel some of the projects are impractical; why build lofts and condos when people move to Tucson to get away from the city? Others feel that it's just not feasible when you look at the $700 million price tag. Considering the Rio Nuevo concept was approved by voters in 1999 and we haven't seen much yet, I'm wondering if we'll see any progress in my lifetime (I'm a Gen X'er so that's sarcasm on my part). Personally I'm still excited by the project. It would mean great things for Tucson as a whole once it's complete. While any development that's made to downtown Tucson will be well received, our city's patience is wearing thin.

There are a few great sites discussing the St Louis revitalization and Rebirth of St Louis

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$8 million home sale sets Tucson record

The Arizona Daily Star reported today that the sale of home in Tucson's Catalina Foothills area set a new record at $8 million. The home, which was not publicly listed (sorry, no photos!) is 7,200 square feet, has a glass bridge walkway, a large patio and pool with waterfall. This sale beat the last recorded high dollar sale for a Tucson home located in Saguaro Ranch, which took place in March. That home sold for a price of 4.95 million.

Photo courtesy of the AZ Daily Star

Though the average sales price for a Tucson home is about $279K there are a large number of luxury homes available for those who can afford it. The luxury home market has held strong even through the Tucson housing slump; 15 homes priced at 2 million or above have sold in the last six months. Better buy that lottery ticket!

For more info about the Tucson area home selling for $8 million

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Rate cut won't significantly impact Tucson housing market

The Feds once again cut the key rate by a quarter percent on Wednesday to motivate the economy and help the country out of it's housing slump. The question on everyone's mind is "How will this impact me?" The answer, not much. Lower short term rates will lower interest rates on home equity loans and some credit cards, which is a positive for consumers. If short term rates are lower then fewer people are likely to default; a good thing when our nation is currently plagued with foreclosures. As a result consumers are likely to spend a little more during our upcoming holiday season because their confidence level is higher. It also means consumers will likely accumulate more debt on their credit cards. Tis the season!

Unfortunately the problems with the housing market won't be resolved with a simple interest cut because the issues are too deep. The after affect of the mortgage meltdown has resulted in stricter lending standards, leaving a lot of home buyers with no way to obtain a home loan. Even popular new home builders like Pulte and Lennar have tightened their standards and are struggling to make sales. A client of mine just received her second price reduction from her home builder, and her home will be complete in a week. Most Tucson home builders are offering incredible incentives to encourage buyers to purchase their homes.

With the Tucson housing market being as saturated as it is, sellers are negotiating their socks off. If you're a buyer looking for a retirement or vacation home, it's the perfect time to take advantage of Tucson's prices. And you can be in your home to enjoy a Tucson winter; sunny and 75 degrees!

To see how this rate cut can impact a home equity loan

For more info about the fed rate cut and it's impact on housing

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