Monday, February 27, 2012

Residential Sale Statistics

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

After three consecutive months of slight increases, the average sale price was down a little to $157,059. We are back to the average prices of 2001.

Part of the reason the real estate market has been so haywire is the supply (number of listings) has greatly exceeded the demand (number of sales). The good news is that there were 4,840 listings in January, which is about the same as in January 2002 when the market was normal. This less than half the 10,387 listings we saw in 2007 when banks were flooding the market with foreclosures.

The banks are now releasing their foreclosures more slowly, and of course the number of foreclosures has declined, now that all the people who shouldn't have bought houses have lost them. We are now working through the inventory of foreclosures caused by unemployment combined with the depression of property values that resulted from banks selling houses for incredibly low prices. In some neighborhoods, all the comparable sales are still foreclosures and short sales. People who did everything right--got mortgages they could afford, made significant down payments, and paid on time--are finding themselves with negative equity, which results in more short sales and strategic defaults.

The other good news is January saw 915 sales, more than in January 2003, the last normal year. This is so much better than the 621 sales we had in January 2008 and the 615 sales in January 2009.

Today the MLS shows 969 sales in January, perhaps the result of listing agents turning in the sales data after the January 31 deadline. Foreclosures accounted for 390 or 40% of the sales, and short sales were 16% of the sales. The banks continue to prefer foreclosure over short sale, even though foreclosures appear to net the banks less money.

37% of the properties were purchased with cash. Many of these buyers were investors who purchased houses that were in such bad condition, owner-occupant buyers would have difficulty getting a mortgage to buy them. Fortunately, these investors are renovating the properties and reselling them a few months later at prices that will help boost the value of the surrounding houses.

FHA and VA backed 29% of the sales, and 30% of the buyers obtained conventional financing.

78% of the sales were under $200,000, and 58% of the sales were under $140,000.

With 30 year fixed interest rates at all-time lows, and lots of bargain-priced houses, home buyers are becoming very motivated.

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