Tucson Mid Year Market Report 2104

ARIZONA HOUSING MID-YEARState of the Market

2014

The housing market in Arizona started recovering off its lows in early 2012, as investors took advantage of eroded prices and distressed properties. As the market has recovered, prices have begun to rise off lows and the supply of distressed properties has diminished, resulting in a more normal and balanced market. Throughout the recovery and into 2014, Long Realty as a company has continued to outperform the market.

As investors have retreated in 2014, sales have adjusted to a sustainable pace. In the first half of this year, sales were down 8% in Tucson and down 17% in Phoenix as compared to 2013. We expect these market trends to continue for the balance of 2014.

CLOSED RESIDENTIAL SALES BY QUARTER - TUCSON

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Q1 Q2 Q3 Q4

2012 2013 2014

0

5,000

10,000

15,000

20,000

25,000

30,000

Q1 Q2 Q3 Q4

2012 2013 2014

CLOSED RESIDENTIAL SALES BY QUARTER - PHOENIX

Statistics based on information obtained from TARMLS and ARMLS on 07/03/2014. Information is believed to be reliable, but not guaranteed.

Don Vallee - Vallee Gold Team | (520) [email protected] | ValleeGoldTeam.LongRealty.com


2014


During the market recovery, sales increased and the available inventory of homes dwindled to low levels, resulting in a seller’s market at many price points. As demand increased and supply decreased, prices rebounded off recession lows. Rising prices sparked more homeowners to put their properties on the market. Coupled with a slowing sales rate this year, the result has been a stabilization of the supply/demand balance. In June 2014, Tucson residential inventory was 34% higher than June 2013, and in Phoenix it was 54% higher than 2013. Greater inventory of homes for sale means buyers have more choices, and sellers now face stiffer competition.

RESIDENTIAL ACTIVE INVENTORY BY MONTH - TUCSON

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14

0

5,000

10,000

15,000

20,000

25,000

30,000

Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14

RESIDENTIAL ACTIVE INVENTORY BY MONTH - PHOENIX



2014


While prices of sold homes rebounded in the initial housing recovery period of 2012 and first half of 2013, they have since leveled off into a more flat pattern. These charts reflect residential median sold price changes from June 2013 to June 2014, across multiple price ranges. Predominantly pricing is flat, giving buyers another window of opportunity into the market. Sellers should be re-evaluating their pricing strategies, along with property condition, to attract today’s buyer.

CHANGE IN RESIDENTIAL MEDIAN SOLD PRICE JUNE 2013 TO JUNE 2014 - TUCSON

1%

0%

-3%

2%

-2%

2%

-4%

1%

-10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10%

$0-$99,999

$100,000-$199,999

$200,000-$299,999

$300,000-$399,999

$400,000-$499,999

$500,000-$599,999

$600,000-$799,999

$800,000-Over

3%

1%

0%

-1%

1%

0%

0%

7%

-10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10%

$0-$99,999

$100,000-$199,999

$200,000-$299,999

$300,000-$399,999

$400,000-$499,999

$500,000-$599,999

$600,000-$799,999

$800,000-Over

Only slight variationsby price range.

Overall pricing trendis flat.

Pricing trend is flat,with a slight

increase in luxury.

CHANGE IN RESIDENTIAL MEDIAN SOLD PRICE JUNE 2013 TO JUNE 2014 - PHOENIX



2014

Statistics based on information obtained from GV/SAHMLS and SEAMLS on 07/03/2014. Information is believed to be reliable, but not guaranteed.

CHANGE IN RESIDENTIAL MEDIAN SOLD PRICE JUNE 2013 TO JUNE 2014 - GREEN VALLEY

-14%

-3%

-7%

5%

17%

-25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25%

$0-$99,999

$100,000-$199,999

$200,000-$299,999

$300,000-$399,999

$400,000-$499,999

15%

-1%

4%

-6%

-25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25%

$0-$99,999

$100,000-$199,999

$200,000-$299,999

$300,000-$399,999

Low to mid priced homessee declines, upper pricepoints see a gain. Overall

pricing is flat.

Low-end homes see price gains, the rest of

the market is flat to declining pricing.

CHANGE IN RESIDENTIAL MEDIAN SOLD PRICE JUNE 2013 TO JUNE 2014 - SIERRA VISTA



2014


Real estate is still very localized, and conditions can vary greatly by area and price point. Months of inventory is a good measure of the health of the market, and reflects the amount of time it would take to sell the available homes listed at the current month’s sales rate. Six months of inventory is considered balanced, below that a seller’s market and above that a buyer’s market.

MONTHS OF INVENTORY BY PRICE RANGE - TUCSON

3.1

3.0

4.2

5.8

8.7

12.6

13.7

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0

$0-$99,999

$100,000-$199,999

$200,000-$299,999

$300,000-$399,999

$400,000-$499,999

$500,000-$599,999

$600,000-$799,999

$800,000-over

Seller’sMarket

BalancedMarket

Buyer’sMarket

2.7

2.4

3.0

4.6

5.9

6.5

10.9

0.0 2.0 4.0 6.0 8.0 10.0 12.0

5.5

$0-$99,999

$100,000-$199,999

$200,000-$299,999

$300,000-$399,999

$400,000-$499,999

$500,000-$599,999

$600,000-$799,999

$800,000-over

Seller’sMarket

BalancedMarket

Buyer’sMarket

5.5

MONTHS OF INVENTORY BY PRICE RANGE - PHOENIX



2014

MONTHS OF INVENTORY BY PRICE RANGE – GREEN VALLEY

Seller’sMarket

BalancedMarket

Buyer’sMarket

Seller’sMarket

BalancedMarket

Buyer’sMarket

6.1

9.6

8.4

26.0

0.0 5.0 10.0 15.0 20.0 25.0 30.0

$0-$99,999

$100,000-$199,999

$200,000-$299,999

$300,000-$399,999

$400,000-$499,999

6.2

10.6

11.7

0.0 5.0 10.0 15.0 20.0 25.0

$0-$99,999

$100,000-$199,999

$200,000-$299,999

$300,000-$399,999

5.2

23.7

MONTHS OF INVENTORY BY PRICE RANGE – SIERRA VISTA

Statistics based on information obtained from GV/SAHMLS and SEAMLS on 07/03/2014. Information is believed to be reliable, but not guaranteed.



2014

Data obtained 07/03/2014 from TARMLS, and ARMLS, Monthly payments based on a 5% down payment on a median priced home. All data obtained is believed to be reliable, but not guaranteed.

Low interest rates and home prices created historically significant affordability in the recovery. As prices started to inch up and interest rates ticked up, the monthly principal and interest cost on a median priced home rose slightly. However, mortgage rates have stayed in a tight range and prices have flattened, so we expect to see a leveling off of affordability for the balance of 2014.

MONTHLY PRINCIPAL AND INTEREST PAYMENT ON A MEDIAN PRICED HOME

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Jun-

07

Sep

-07

Dec

-07

Mar

-08

Jun-

08

Sep

-08

Dec

-08

Mar

-09

Jun-

09

Sep

-09

Dec

-09

Mar

-10

Jun-

10

Sep

-10

Dec

-10

Mar

-11

Jun-

11

Sep

-11

Dec

-11

Mar

-12

Jun-

12

Sep

-12

Dec

-12

Mar

-13

Jun-

13

Sep

-13

Dec

-13

Mar

-14

Jun-

14

Tucson Pymt Phoenix Pymt

THE LUXURY MARKET CONTINUES TO LAG

While lower price points experienced a very competitive landscape during the housing recovery, the luxury market (priced $800,000+) has lagged behind. This year, sales and under contract properties in Tucson are off from YTD 2013, relatively flat in Phoenix and both markets are experiencing increases in luxury listing inventory. This will put additional pricing pressure on sellers at the high end.

Statistics based on information obtained from TARMLS and ARMLS on 07/03/2014 for residential properties priced $800,000 or higher. Information is believed to be reliable, but not guaranteed.

Tucson Phoenix Jan-Jun Jan-Jun Jan-Jun Jan-Jun 2013 2014 % Change 2013 2014 % Change

Luxury Closed Sales 78 75 -3.8% 966 984 +1.9%New Properties Under Contract 110 95 -13.6% 1144 1148 +0.3%Luxury Inventory* 222 269 +21.2% 1680 2115 +25.9%

*as of June 30 each year

“Did you know 40 percent of today’s homebuyers using mortgage financing are making down payments that are less than 10 percent? And how about this: since 2010, the number of people putting down less than 10 percent for conventional loans has grown three fold. So, not only are low down payment options real, they represent a significant portion of today’s purchases.” Source: FreddieMac.com



2014

One of the indicators of future market activity is online home searches. Long Realty is experiencing a positive trend in terms of an increase in online home searches, with more consumers visiting its websites and mobile app in the last 12 months. This trend could very well lead to an increase in buyer activity in the second half of 2014. Consumers continue to grow their use of mobile devices to search for real estate. In 2014, more than 50% of online search traffic to Long Realty has been on a smartphone or tablet.

TOTAL VISITS TREND BY FULL WEBSITE, MOBILE WEBSITE, AND MOBILE APP

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Jun-13 Jul-13 Aug-13 Sept-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14

LongRealty.com Mobile LongRealty.com Long Realty Mobile App

MARKET SUMMARY Today’s market is punctuated by these key trends: - A more normal and traditional market with investors on the sidelines. - Sales off the pace of 2013. - An increase in the number of homes for sale. - More buyer choices and negotiating power than in the last 2 years. - Greater competition for home sellers with increased inventory and flattening prices. - Dynamic market conditions that vary by both area and price point.

Real estate can be complex, from locally changing market trends to challenging transactions. To ensure you are making the best real estate decisions, work with a knowledgeable Long Realty professional. Please contact me for help addressing your specific needs.

Be the first to know in Arizona.

Faster – See new listings within 15 minutes.More Accurate – Information directly from the MLS.

Download My App: Visit My Website:


longrealtyapp.com/donvalleeValleeGoldTeam.LongRealty.com

Tucson Mid Year Market Report 2104

Documents

Transcript of Tucson Mid Year Market Report 2104