Thursday, January 7, 2010

December Residential Sales Statistics

The Tucson Association of Realtors has released the Residential Sale Statistics for December.

With 886 units sold in December, we saw a 10.5% increase since the previous December, but a 12.4% decline from the previous month. I think this may be because the $8,000 first time home buyer tax credit was due to expire on November 30, and buyers who didn't have a house in escrow in November (which would have closed in December) no longer had that incentive. At the very last minute, Congress extended the tax credit through April 30, and added a $6,500 tax credit for buyers who lived in a home they own for five of the last seven years. I expect we will see a resurgence in the first time buyer market in the first quarter of 2010.

Average sale price was $202,376, up 0.8% for the year and up 7.4% from November. Median sale price was $154,262, down 8.2% for the year and down 5.1% for the month.

Most of the action remains in the under $250,000 market. With 4,423 listings and 693 sales in December in this price range, we have a 6.4 month supply of these houses. This is almost down to the six month supply that is considered a balanced market.

In the $250,000 to $500,000 range, we had 1,618 listings and 141 sales, for an 11.5 month inventory.

The over $500,000 market will remain weak as long as buyers have difficulty getting loans in this price range. With 937 listings and 52 sales, we have an 18 month inventory.

Government-insured loans (FHA and VA) accounted for 50% of the financed sales. From 2004 to 2007, sellers would have laughed at the idea of considering an offer with FHA and VA financing, when conventional loans were available for no money down and no concerns about the condition of the house. In December, 43% of the financed sales used conventional financing, which requires at least 10% down payment now, excellent credit, and a house in very good condition. Amazingly, 236 of the 886 sales, or 27%, were cash sales. Cash can be the only way to buy some of the short sales and foreclosures that either were trashed by the previous owners or deteriorated while they sat vacant for months or years.