I’ve dreaded looking at comparable homes in appraisals over the past few years.  It’s been a long, discouraging trend.  Each sale was about so much more than a house.  It was about a seller struggling in some way.  Occasionally, I ran across an exception, but overall, it’s been tough for everyone.  Lately, I’ve noticed an improvement in comparable data.  More and more homes are selling for MORE than they did in the previous sale.

So this seemed like a good time to check in with the Tucson Real Estate market and evaluate where things are.  Were my observations supported by numbers from the larger Tucson metro area?  Every month, the Tucson Association of Realtors publishes a number of sales related statistics.  March 2011 stats can be found at http://www.tucsonrealtors.org/tar-v2/statsMar2011.pdf .  There are pages of information about sales and prices in the Tucson area market.  You’ll find a breakout of sales by zip code at the end of the report.   And yes, the data is generally encouraging.

All in all, sales volume is steady for now.  The same number of homes were sold in March 2010 as in March 2011 (n=1169).  The March volume of sold homes increased 20% over February.  But in 2010 that increase was over 60%.  It’s possible that March’s unit increase over February’s may be more about time of year, than a trend in sales volume.

An encouraging trend is the 2011 month over month increase of properties newly under contract.  New contracts in 2011 outpaced 2010 numbers for the same months by at least 30%.  That should help boost unit sales in the upcoming months.  You can’t assume new contracts in February (n=1184) translate into closed sales in March (n=1169), but 30 days is a typical close.  We’ll know in the next month or so if those written contracts translated into closed sales.  The sharp increase in new contracts follows 5 good, stable months at the end of 2011.  The good news is that contracts are being written like gangbusters.  Buyers are out there looking and trying to buy.  Lesson Being:  If you see a house you want, write an offer, because it won’t be available long.

There is also an interesting change in the trend of “Newly Under Contract” units.  For years June and July were the busy contracts month.   I hypothesized it was because families move before the children’s new school  year begins.  Interesting to note that last year, there were more new contracts written in April.  I wonder if it’s a reflection of the current employment challenges.  Is the spike because adults want to make a job transfer or search after school is out?  Or possibly people are using their tax refund for a down payment on a home?  The good news is that every month this year has shown an increase in contracts written.

More homes are sold in the Northwest and Central parts of town and that’s a consistent trend across four years.  In March, dominant sales prices were in the $90,000-$160,000 range, with spikes at $200,000 to $250,000, and again in the $300,000-$400,000 range.  I was surprised to see that 5 homes over a million dollars also sold in March.  That’s a good volume at that price. 

The median sales price is the exact point at which there are an equal number of homes that sold below it as above it.  I compare it to the midpoint in a teeter totter.  An increase in median price can reflect an increase in value over time.  A monthly to month dip in the median just means more sales under the median than over.  Unlike “new contracts”, the median price is a stable indicator; it isn’t subject to much extraneous measurement.  The average median sales price crept up month by month from 2001 to mid 2006.  It dips in late 2006, goes back and forth in 2007, until September

when it slowly sinks to it’s lowest point, March, 2011.  So, the local housing market hasn’t reached a “recovery point”.  We are still seeing houses sell for less than previous values, but we are also starting to see some recovery at lower prices and that is what will drive an improvement in values. 

Almost 37% of March sales were cash sales, which would be consistent with lower end investment purchases and a dropping median price.  Many of the homes on the market are in need of repair.  With that amount of cash volume, we can hope that these homes will be repaired, renovated and placed back on the market for a profit.  This would also help increase sales prices over time, which would increase home values.  Many of the properties previously purchased in the $ 70 to $ 80 thousand dollar range are being resold in the $ 100 to $ 120 thousand range.

I’m looking forward to the summer numbers.  I think we’ll see a stabilization in median price and hopefully the continued activity in new contracts will translate into a high percentage of sales.  I’ll be sure to give you an update in mid-summer.

In the meantime, hope you’re having a great May – enjoying all the celebrations that seem to happen this time of year.

This is a basic outline of steps involved.

PRE-QUALIFICATION I’ll gather financial information from you about your assets, debt, income, credit and employment. This information determines what type of a loan you can get and how much you can borrow. Your secured monthly debt should be about 45-50% of your gross monthly income.

This is the point where you will be looking for a home with your Realtor.

PRE-APPROVAL While you’re looking for a new home, I’ll get your documentation to support the pre-qualification. If everything matches what we talked about, I can send the REALTOR a form to accompany an offer that validates your ability to qualify for a loan.  After March 31, 2011, the updated version of this form is called a Pre-Qualification Form.

After you select a home & have an accepted purchase contract, you’ll inspect the home to make sure it’s in good condition or to note what you’ll want repaired before Close of Escrow. This is where your REALTOR will distinguish themselves, by working hard to make sure the property is in sound condition and meets local code. This is also when the escrow company will issue a preliminary title report, so you can make sure title to the property is clear.

PROCESSING The processor organizes everything you’ve provided into a file, double checks to make sure it’s complete, coordinates with your insurance company and submits the file to underwriting for a final loan approval once the file is complete.

Once the inspection period is successfully resolved, the appraisal is ordered to validate the purchase price is correct.

UNDERWRITING An underwriter reviews your financial information, the appraisal, the preliminary title report and issues a Clear to Close or could request more information at that point in order to get your loan to the closing department.

LOAN DOCUMENTS to TITLE CO. Loan documents are emailed to the title company. The escrow officer issues an estimated Settlement Statement (HUD-1), which is reviewed by the REALTOR,  the Loan Officer and the lender closing department to make sure that all the figures are correct. Once everything is in agreement with the purchase contract terms, the estimted HUD-1 is sent to you for review.

SIGNING AT THE TITLE CO. You meet with the Escrow Officer, your Loan Officer & Realtor at the title company to sign the loan docs. You will bring a cashier’s check for the amount needed to cover your down payment and any closing costs.

CLOSE OF ESCROW This is the date specified in your contract that the purchase will record. The lender funds their loan, your funds are deposited and the title company records your purchase at the county. That’s when you’ll get your keys.  This is the date you should work from if you’re planning moving vans, utilities, etc.

Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!