The smell that quells a home sale

I was out showing some clients a home the other day and as we entered through the property's front door we were broadsided with a wall of cigarette smoke. Suddenly I realized why this home has been on the market so long....

Mind you the home owner that greeted us at the door was not even smoking at the time, so this was residual smoke that stopped us in our tracks. Once my clients had walked into the home they said they wanted to see the backyard and quickly excused themselves out the backdoor. Then it was just a waiting game; as we admired the home's sparkling pool, we were actually planning out our escape. They didn't even want to see the rest of the home, in their eyes they were done with this house.

In my experience nothing can turn off a potential home buyer more then the smell of cigarette smoke. For those of us that are "smoke sensitive", the smell of cigarettes is offensive and a deal breaker. I think many homeowners underestimate the impact cigarette smoke has on the sale of their home. Though it's hard t believe, cigarette smoke permeates into everything in the home, the walls, carpet, window coverings, furniture and even the grout between tiles. One home in particular I remember well; the home had just been vacated and there were cigarette smoke outlines where the pictures had been hanging on the walls. That home sat on the market for YEARS!!!

The smell of cigarette smoke can be very difficult to remove once it's seeped its way into the walls, flooring and cabinets. Buyers understand this and more often then not just skip over a property with smoke issues. If you plan on putting your home on the market and you're a smoker, bring in your real estate professional early to discuss potential problems with cigarette smoke and options for removing/reducing the smells. It's a deal breaker in most real estate markets, and with the current excess housing inventories and slow sales, don't you want your home to be at its best?

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Maybe this is how you sell a house...

Everybody knows that the housing market is struggling right now, so it's entertaining to hear about some of the bright ideas people have to get their home sold. There are some creative minds out there.....

The Sinclairs, who live in Oregon, were finding it impossible to sell their beach house. Tired and frustrated, the decided to get creative and hold an essay contest. Entrants are charged a $200 application fee to submit an essay on why they deserve to win the house. The Sinclairs need to get 3000 entries to cover the value of the house and the fees associated with the contest. So far they only have about 360 essays, but they're hoping to reach their goal by the end of April. Considering the weather has been pretty miserable in that part of the country over the last few months, I can't imagine there are a lot of buyers eager to purchase up there right now. I'm not expecting the Sinclairs to reach their goal, but I do wish them luck and give them kudos for using their imagination!

Read about the Sinclair's essay contest

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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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Foreclosure rescuers; the latest scam

As if it's not bad enough that so many people are faced with the thought of losing their homes right now, it's even worse to hear that there are phony "bail out" companies taking advantage of homeowners that are trying to avoid foreclosure. Unfortunately "foreclosure rescuers" are popping up everywhere, preying on homeowners when they're at their weakest.


Foreclosure Rescue Management is the latest addition to these scam groups that trick needy homeowners into signing away their most precious asset. These companies approach struggling homeowners and tell them they can help them to avoid foreclosure by refinancing their debt. All homeowners need to do is sign over their home's title for a year while the company cleans up the debt. Problem is that during the year these companies sell the titles to buyers who in turn demand high rent from the original owners. When they can't afford to pay it, they receive eviction notices. Once homeowners have fallen for the scam it's almost impossible to get out.

It's really a shame that these companies are thriving right now, but what should we expect. In Cleveland over 20 mortgage fraud companies opened last year alone. Currently there are twelve states fighting back with new anti-fraud laws. Unfortunately Arizona is not yet on the list. Nothing worse then these bottom feeders in my opinion...

Read more about foreclosure scams

States fighting back against foreclosure fraud

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How foreclosure affects your neighborhood

As I was perusing through home listings the other day I came across a property close to my neighborhood that had apparently been repossessed. I looked at the sales history and noticed that the home was currently bank owned and had been previously purchased for an extremely low price. Like anyone who might live around a home that's fallen into foreclosure, I was curious about how this would impact my home's value.

Still today there's a stigma about homes that fall into foreclosure. Many people assume that homes in foreclosure are dirty and damaged or located in bad parts of town, but it's not necessarily true. During the last several years a lot of buyers purchased homes they really couldn't afford, and circumstances have now put them in a position where they can't keep their homes. Foreclosures come in all shapes and sizes, from starter homes to mansions, and the impact they have on surrounding properties is being seen all over the nation.

So how do foreclosures affect neighboring properties? Surprisingly they really don't impact home prices too much unless there is a large concentration of them in a specific area. Most appraisers try to avoid using distressed homes in their comparables if they can. They'd rather pull comps from adjacent neighborhoods and adjust them for value before they'd include short sales or foreclosures in the mix. If there are other home sales to choose from the appraiser will use those and the impact should be minimal. If there's a larger ratio of foreclosures then there are normal home sales, then unfortunately those sales prices become the market value. Communities with high foreclosure rates can also affect house values because often they're neglected. Many times the homes are vacant so no one is maintaining the property. Sometimes these vacancies are drawing crime to the area. Too often buyers look at these neglected properties and see diminished value of the entire neighborhood, not just the homes in foreclosure.

So if you happen to notice a foreclosure in your neighborhood, don't worry too much about how it will impact the value of your home. One distressed property shouldn't affect your value at all. But if you notice that the home is vacant, it might be wise to work with neighbors to maintain the exterior by pulling weeds or keeping debris out of the yard. It's too easy for the landscape to get out of control, and that's the first thing home buyers see when they're researching a community. Better to focus on preventative maintenance now and keep those home values up!

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Make your home stand out to Tucson buyers

It's a new year and everywhere we look we continue to see the sad facts about our nation's real estate market; prices are dropping, the market is saturated with homes that just won't sell, foreclosures still remain high, and buyers continue to have difficulty getting loans to buy homes. It's enough to drive anyone crazy! The Tucson market is better then much of the country; people are still buying homes here. But it's a difficult time for home sellers due to the excess housing inventory. A home practically needs to be perfect to compete and sell.

Right now buyers are in great shape because they have an endless variety of homes to chose from; they can afford to be picky and choose the best. My home sellers are the ones having difficulty right now. Because there are so many homes currently on the market, home sellers have a lot of competition. In November 2007 there were approximately 9234 active listings in Tucson. That's about 3700 more listings then in November 2005. Large supply and little demand ultimately results in a lower sales price for homes. Worse yet home prices are expected to fall more in 2008 and eventually pick up in 2009.

Tucson's real estate market is on average stronger then the rest of the nation because we see a lot of retirees and vacation home buyers choosing Tucson for their next home. That' why I'm giving my sellers the cold hard facts about their homes; strive to make your home perfect or it's not likely to sell for quite awhile. On several occasions I've showed listings and found that my buyers aren't interested in homes that are messy or need paint or new carpet because there are more homes down the street that are in perfect condition.

My advice to those thinking about selling is wait if you can, but if you can't, make your house stand out from the rest.

Clean, clean, clean! - That means clean every inch of the house and remove all the "stuff" that clutters your home. Many sellers expect home buyers to "look past" the personal items like excessive pictures, knick knacks, magazines and books. Today's buyers don't need to do this because if they don't like what they see when they walk in the door they can move on to the next home.

Create space - Buyers are looking for homes that feel open and bright; it's great for entertaining and a person's well being. Many homes have too much furniture crammed into too small of an area. And not every inch of a home's walls need to be covered with pictures or other artwork! When it comes to selling your home, less is more. Clear out one of the lounge chairs in the family room and take down the collection of family photos on the hallway wall. If you're not sure what should be removed contact a home stager to take a look at your house and tell you what can be done. Professional stagers can be a true asset because they see your home through the eyes of potential buyers. They're job is to tell you what's wrong and how to improve it before your home goes on the market.

Paint - I can't tell you how many listings I've viewed that had either gotten a very poor paint job or hadn't been painted in five years. Newly painted interior walls stand out and help a home to look clean and new. It's relatively cheap to have the interior of a home painted, but it's also something a handy homeowner can do themselves to save money. Just remember to keep the colors neutral (like antique white) and make sure the lines/edges are neat. Nothing's worse then sloppy paint that runs into the ceiling, baseboards or tile grout.

Clean/Replace Carpet - The condition of home's carpet is an important issue to many buyers. If spots and stains are evident it can be hard to overlook, and many buyers see the condition of the carpet as a representation of the rest of the house. If your home's carpet has stains that can't be removed by professional cleaning it's probably wise to replace it before putting the house on the market. It's best to keep carpet colors neutral but dark enough to hide everyday dirt. Your goal is to have colors that appeal to everyone so that you're not eliminating potential buyers.

Keep up the yard's landscape - In the Desert Southwest our landscape consists of rock, cactus, rock, a few flowering, drought tolerant plants, an occasional Palo Verde tree, accent boulders and more rock. It's pretty simple to maintain, but after the cold winter months (yes, I'm serious; it does occasionally freeze in Tucson) most plants will need to be trimmed back and some replaced. Don't overlook this step. You've all heard the phrase "curb appeal" and it does ring true. If someone is interested in a home that's for sale, they usually drive by it a few times and evaluate the exterior before the ever see the interior. If they don't like they way the outside looks then the won't care to see the inside.

Sure there are other steps to make sure you house will sell in today's market, but a lot of that relies on your real estate agent. As a home seller your goal should be to make your house look better then your competition. If your house stands out and is priced right from the beginning then it's most likely going to sell more quickly and bring you a higher dollar.

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Tucson homeowners like their fake grass

A few weeks ago the Arizona Daily Star ran an article about the growing popularity of artificial grass with Tucson homeowners. Though the price can be expensive, many homeowners are incorporating small areas of synthetic grass into their landscape because it's easy to maintain and requires no watering.

If you're not familiar with Tucson or the rest of the Southwestern United States, you might be surprised to find that we don't have lush green lawns like homeowners in the Midwest or East Coast. The brutally hot sun and lack of water make it practically impossible to have real grass in Tucson. That's why homeowners in the desert Southwest generally use gravel and drought tolerant plants in their landscape. It's easy to maintain; just lead drip lines to your plants and turn on the timer. Incorporating artificial grass can add to the aesthetic appeal and make a desert yard more interesting. And, dogs love to roll around in it! It's pricey to have it installed; prices run between $7-10 per square foot depending on the type of grass you choose. Most types of synthetic grass last about 15 years, and the only maintenance required is spraying it off with a water hose. Make sure you really check out different variations; I've noticed some that look like the old fashioned "astro turf" and others that look like real grass. It's better to spend a little more and be happy with the end result.

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With Tucson rain comes problems for homeowner

The entire Tucson area was completely saturated with rain this past weekend, and though this will result in an abundance of colorful wild flowers in Spring, it can also create some annoying problems for homeowners.

The first thing I notice in my home after several days of rainy weather in Tucson is the bugs. Suddenly I find crickets everywhere, sneaking in through ceiling air vents or through my garage. I understand that heavy rains force them to find a safe, dry environment, but they can move into my neighbors house. Termites also become a big problem when Tucson sees excessive rain. Arizona termites aren't as aggressive as you might find in more humid climates, but they can be a pain if you don't control them. Usually homeowners will see termites pop up during our summer monsoon season, but the December rains we've been seeing are sure to bring them out of hiding. Just in the last few days I've noticed a larger then normal number of pest control companies treating homes.

Yet another problem homeowners are seeing right now are roof leaks. Only after heavy rains do we find those aggravating little leaks that we usually miss due to our mostly dry climate. Just today I had a neighbor tell me they noticed a leak after this weekend's rains and they were in need a roofing company referral. Unfortunately the company I referred is already backed up until mid January with other roofing jobs. That's one problem I encounter a lot when trying to schedule roof inspections or repairs for clients in the summer. Tucson monsoons can delay roofing repairs for weeks if not months depending on the amount of rain we get.

One problem that many new to Tucson don't expect to find is mold. Although it's not directly related to rain per se, excessive moisture is known to cause mold in Arizona homes. Mold can drift inside from the outdoors and grow on wood, carpet and paper if left untreated . Musty smells and water damage can be signs of mold, but it's best to have a professional inspection if you think you might have a mold problem. Luckily we have the Arizona Mold Dog that can sniff out mold in a flash! To find out more about mold in the home check out the Mold Information Sheet provided by the Arizona Dept of Health Services.

None of these problems are all that significant; it's a matter of catching them in time. Homeowners just need to keep their eyes open and fix the little issues before they become big and expensive.

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What's the "right" reason to sell?

People decide to sell their homes for any number of reasons; recent marriage or divorce, unsafe neighborhood, need for increased living space due to growing family, unsatisfied with school district, etc. When you get down to it, some of the most common reasons for selling are not reasons that homeowners need to move, but reasons they want to move. With the current slow down of the real estate market, it's important to think about your reasons for selling your home. If you have a choice between selling or staying put, not selling definitely has it's advantages, especially now.


Selling your home and buying a new one can cost a lot of money. With the average home price down about 2% from last year and homes sitting on the market for months on end, it might be better to hold on to the home you're currently in. Still there are some reasons where it might be wise for you to bite the bullet and sell -

Job relocation - You just got a promotion; Great! But, the job is located about 150 miles from where you currently live. A portion of the Tucson population commutes to work in Phoenix daily. As gas prices and time away from family remain issues, sometimes it's smarter to pick up the family and move closer to the job.

Financial difficulties - If you're having trouble affording the home you're in it might be wise to downgrade to a lower cost living situation. Many homeowners are currently living beyond their means and have too much consumer debt; now they're being forced to sell because they can't keep their head above the water. This might be a good time to sell and move to a lower cost option while getting your finances in order.

Divorce or death of spouse - Too often losing a spouse or partner means losing income that helped pay the mortgage. Losing a partner to death or divorce can also leave bad memories and feelings in a home. It may be in your best interest emotionally and financially to sell and start a new life in a new home.

Retirement - Many new retirees find themselves living in a home that's bigger or more expensive then they need, so selling to downsize just makes good sense. Smaller means less house to clean! Active Adult communities are a popular alternative for retirees because they offer an endless list of sports and social activities, all within their own neighborhood.

If your decision to sell is based on wants, like wanting a bigger or nicer home, or wanting to move to a better neighborhood, it's wise to hold off until the real estate market turns around. With property values low, home buyer difficulties in obtaining loans and the overall state of the economy, it's better to just hold on tight and ride the real estate wave until the the market is more favorable to you, the seller.

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To buy or sell; which comes first?

One of the most common questions I get as a real estate agent is "Should I sell my house before I buy a new one?" My answer is always "that depends". Although that response may sound too non committal, it true. Current real estate trends, your financial situation and your reason for moving are all important factors that can determine whether it's better for you to sell or buy first. Generally it's better to sell your current home before you buy a new one.

There are several benefits to selling your home before you buy, and in our current buyers market, it just makes more sense. Selling your home first puts you in control. By selling before you buy you'll have the luxury of time. You won't have to take the first offer that comes along (unless it's a great one!). You can decide how much to accept for your home without feeling pressured to take a lower price because your financially strapped with two mortgages. Once you've sold your home you'll know exactly how much money you can put towards your new home. And selling first removes contingencies that may otherwise keep home sellers from accepting your offer to buy their home.

Ideally it would be great if you could sell your old home and close on your new home at the same time, but life doesn't always work that way so you need to keep your options open. If you receive an offer on your home but haven't found another one to replace it, see if you can rent back your home temporarily. It's best if you make this a part of your home's sales contract so that you know up front if it's feasible. There's also the option of renting an apartment or a different home until you find a house you want to buy. These situations might not not always be convenient but if they benefit you they might be worth considering.

Sometimes it might actually be better for you to buy before you sell your current home. When Tucson saw it's sellers market between 2004-2005, homeowners could put their homes up for sale and receive an offer within a few days. Demand was high and supply was low, so sellers knew that they could buy another home without much risk.

There are other reasons to buy before you sell. Sometimes you might find a house at a price that's just too good to pass up. Occasionally homeowners are forced to sell for any number of reasons; if they're motivated and it's going to benefit you and your situation, take advantage of it! And, if you come across that home you've always been dreaming about, it might be a good idea to buy it before you lose out. If it's the perfect home and you don't make it your own, you may regret it in the long run. But before you jump in and buy, make sure that you can afford two mortgage payments. In a worst case scenario your original home may not sell for awhile, and you want to make sure you can handle the temporary burden of double payments.

Whatever you decide to do, make sure you review your personal situation and finances so that you know what you're getting in to. One of my general rules in life is it's better to be prepared and find out a situation won't work before you commit to something you're stuck with!

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Tucson real estate; it's a buyers market!

Tucson's real estate market slowdown made front page news this morning in the Arizona Daily Star. The article discussed Tucson's current housing market , the advantages that home buyers have and the disadvantages that home sellers face as a result of our market slowdown. Tucson's real estate boom in 2004 and 2005 brought increased home sales to areas NW, SE , SW and South of the city, but these communities (Gladden Farms, Vail, Sahaurita) are now saturated with homes that just aren't selling due to availability of more properties closer to the city. On top of that the resale market is struggling to compete with new home builders that have excessive inventory and rock bottom prices.

The increased amount of home inventory had led to a steady increase for Tucson homes' Days on Market. Below is a map courtesy of the Arizona Daily Star, that shows the average days on market for a Tucson home per area.

Average DOM per area in Tucson

It's a frustrating time for Tucson home sellers that hope to sell quickly and take advantage of the market slowdown. The average days on market for a Tucson home is 73 days, with areas like NW Tucson seeing an average of 84 days because of the high number of homes currently listed. As of September Northwest Tucson had over 2400 homes listed for sale, twice the number of homes listed in Central Tucson, and more then three times the number of other areas.

The article in the Daily Star includes some great maps that provide Tucson real estate statistics by area; make sure you check them out. Find out more about Tucson's current real estate market Now may be the best time to buy a house

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Trust and the Real Estate relationship / Tucson Home buyers

Though it's not in the forefront of our minds most of the time, trust is one of the most significant aspects of any relationship. It starts when we're young, when we trust our parents to love and take care of us. As we become independent teenagers the roles are reversed, and our parents trust us to make wise decisions. In our relationships, whether personal or professional, trust impacts every decision we make and every emotion we feel. And though it's not something we consciously think about when buying a home, trust plays a very central role in every real estate transaction. Trust and real estate are rarely discussed but often implied. That's why I felt the need to bring up the two. In this blog I'll discuss trust and the home buyer; trust and the home seller will be a future entry.

Trust in the real estate relationship begins before a potential client and a real estate professional even meet. As 80% of home buyers begin their initial home search online, they trust that the real estate agent they locate online is professional and reputable. The home buyer trusts that this agent will help them to meet their needs; to help them find the right house in the right location at the best price while protecting them throughout the transaction. Then trust moves into a more significant role as emotions take over. Often when a person finds their dream home, logic goes out the door and emotion controls their every decision. With this the individual trusts that their agent will "guide" them to make logical and rational decisions and protect their best interests. Unfortunately this is not always the case. Though building a real estate relationship with someone you trust is very important, home buyers must remember to take the emotion out of the situation and take the initiative in making decisions. Below are just a few examples of how trust has played havoc on the lives of home buyers.

• My bother in law had exponentially increased the size of his family and needed a bigger home in California. He enlisted the help of a buyer's representative and found a home that would be perfect for his family and lifestyle. This real estate professional suggested he just offer full price if he really wanted the house. Mind you this is a house that had been on the market a LONG time, so there was room for negotiation. Under the guidance of this agent he also chose not to have any home inspections; he was told that the house seemed to be in fine shape and there wouldn't be any problems. After the closing was when the nightmare began. First there were numerous electrical problems with the house. The previous owner had been a "handyman" that had made several updates and changes to the home and none were up to code. Still today there is a never ending list of issues with the plumbing and roof. Unfortunately my brother in law trusted his emotions without using his better judgement and ended up on the short end of the stick.

• After getting married my sister in law and her husband decided it was time for a bigger house in Portland. Hoping to save money, they chose not to enlist the help of a real estate agent in their home search ( I know, I know.....but my attempted guidance fell on deaf ears). After several months of looking they finally found a home in the perfect neighborhood which was for sale by owner. They decided to make an offer, and at this point they put their trust in the home owners. After negotiating and agreeing on a price, they had successful inspections and finally closed on the house. Eagerly they picked up the keys to their new home, raced over and entered to find that the sellers had left the house a total disaster. Beside being just plain filthy, there were holes in the walls, stained carpet and several other issues. Unfortunately these home buyers had placed their trust in the home seller; they assumed that since he was a corporate executive with a big company that the home would be left in good condition.

• My father decided to buy a house back in Kansas. The home was for sale by owner, but my father was wise and followed my suggestion of having a real estate agent represent him. He contacted the city's top sales agent, one he had sold a home with in the past. They sat down and determined that both the home seller and buyer would contribute towards the commission, then wrote an offer on the house. During escrow the real estate agent referred my father to a so called reputable home inspection company she had used on numerous occasions. The home inspection came back with minor issues which were resolved by the seller. My father closed on the house, received his keys and moved in. Right away he began to notice problems with the house; problems that the home inspector was responsible for but missed. After much harassment on his part my father received reimbursement from the inspection company. Unfortunately he had trusted and relied on the real estate agent to refer an inspection company that was reliable.

My point in this blog entry is not to say that real estate professionals cannot be trusted; we already get a bad rap for that. As usual a few bad apples spoil the bunch. In all the above scenarios the buyers could have been more proactive in investigating and decision making. My point is that though there are many real estate agents you can trust your life with, you shouldn't trust anyone but yourself when it comes to making important decisions. As a real estate professional my job is to help buyers and sellers make informed decisions; I give clients all the information they need to make decisions that are best for them. But I still encourage my clients to investigate every avenue before making a decision, because in the end they are the ones that will have to live with the result. My final words are just this, remember that working work with a real estate agent is just like any other relationship; at the end of the day make sure you've trusted your own judgement first.

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Number of new NW Tucson listings appears strong

Just snooping early yesterday in the Tucson MLS and noticed that NW Tucson had the largest number of new listings to start off the month. Northwest Tucson, including Oro Valley and Marana, had 59 total new listings on October 1st, with North Tucson following in second with only 19. I say total because I'm including SFR, SFNC, Condo/TH, MSFR and MH's. Considering there were only 158 new listings on Monday, and NW Tucson made up 37% of that total, it seems that homeowners in NW Tucson may not be too concerned about the so called "housing slump". Still it's too early to tell, we'll have to see where we end up for the week. The number of new listings have been slowly declining, as Northwest Tucson had 132 new listings for the first week of September, down 10% from the number of new NW Tucson listings for the first week of August. Tucson MLS will release the September real estate sales stats early next week so we'll have a better view of market activity then.

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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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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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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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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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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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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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