Tuesday, January 8, 2013

December Residential Sales Statistics

The Tucson Association of Realtors has published the Residential Sales Statistics for December 2012. The average sale price was $183,011, the highest average for any month in 2012. This is unusual, because sale prices in Tucson usually peak in the summer, and then go into a seasonal decline until the market picks up the following spring. We are back to the prices of 2004, the last normal market before the housing bubble started to expand.

Cash sales are still 33% of the sales. Many of these cash purchases are made by investors. Cash buyers have an advantage over buyers who are getting a mortgage, because mortgage companies require that the house be in habitable condition. A stolen air conditioner, leaking water heater, termite damage or even a broken window can prevent a buyer from getting a mortgage on a house. Many of the distressed properties are neglected and vandalized, so only a cash buyer can purchase them.

15% of the sales were short sales, and 24% of the sales were foreclosures. Distressed sales still have a grip on 39% of the market. These distressed sales must be used as comparable sales on appraisals, and they drag down the value of non-distressed houses. It seems we still have a long way to go to get rid of all the distressed inventory.

The LA Times says that short sales are now more common than foreclosures there. The real estate boom started in California, and the real estate bubble burst in California first. We can only hope that Arizona catches this wave of more cost-effective and productive distressed sales.