The National Geographic has named Tucson as one of 10 recommended winter vacation destinations. The choices span the world, and we are the only place chosen in the USA. I have to question their praise for the Sonoran hot dog, but I've never had one, so maybe they are amazing. For unique fare in a lovely environment, I say get the beer-batter fried avocado tacos at Seis in the Mercado San Agustin at the western end of the modern street car line. Or the cornmeal-crusted chile relleno at LaCocina in the delightful Old Town Artisans. Thank you, I think I will.
And by now everyone knows that UNESCO named Tucson the first City of Gastronomy in the USA. I love traveling the world, but I sure miss the food of of the Old Pueblo when I'm in places that are less culinarily enlightened than my Sweet Desert Home.
Thursday, December 15, 2016
Monday, December 12, 2016
When's the Best Time to Buy a Townhouse?
Dear friends of mine are moving back to Tucson and I am looking forward to helping them buy a townhouse when they get here next week. They are getting discouraged because the properties they like best are being sold so quickly. They wondered whether the snowbirds are buying the properties, and asked whether they would have better luck in June. This is what I said:
Check out this link to the Tucson Residential Sales Statistics for November.
The number of escrow closings of all types of real estate (single family, townhouse, condo, etc), is highest in June. At the bottom of page 4 in the link above, you can see that there were 150 closings of townhouses in April and 109 in August. This is contrary to the overall trend of sales peaking in June. Because townhouses are only about 9% of the sales, and the sample size is so small, I don't think this indicates anything about the best time to buy a townhouse. The sales that closed in April got under contract in March. This is when snowbirds are leaving.
Snowbirds tend to rent, not buy. I don't think you're in competition with snowbirds for townhouses in December, or any other time. I have shown many, many properties to snowbirds, but I can't remember ever selling anything to a snowbird. They come to their senses when they realize the expense and risk of owning a property that's vacant most of the time.
You can see on page 6 that sale prices peak in June. This is because most of the closings are in June, and that's because we have more buyers competing for the properties in May than in other months. Seems weird that people would want to move in June, but the school calendar is driving that.
The problem from a buyer's perspective is that demand is high and supply is low. On page 4 of the November sale statistics, you see there were 1,266 sales (buyers = demand). On page 10, you see there were 4,069 listings (sellers = supply). 4,069 divided by 1,266 = 3.21 month supply of listings. This is very low. Anything under a six month supply is considered a seller's market.
Why is demand high? Could be the down payment assistance program for low income buyers, and also the insanely low interest rates. Rates have gone up 0.5% since the election. Apparently this is because investors think the bond market rates will go up as the Republicans spend money on infrastructure without raising taxes to pay for it. When bond market rates go up, mortgage interest rates go up. So the disappearing down payment assistance funds and the rising interest rates may be what is motivating some people to get off the fence and buy. Also, there just isn't much to buy, so well-maintained, well-priced properties are often selling in bidding wars. Yes, bidding wars are back.
I think you need to buy when the property you want is on the market. Trying to predict when you will have less competition or greater inventory is probably not going to work.
Sorry, I wish this were easier, but that's the way it is now.
Check out this link to the Tucson Residential Sales Statistics for November.
The number of escrow closings of all types of real estate (single family, townhouse, condo, etc), is highest in June. At the bottom of page 4 in the link above, you can see that there were 150 closings of townhouses in April and 109 in August. This is contrary to the overall trend of sales peaking in June. Because townhouses are only about 9% of the sales, and the sample size is so small, I don't think this indicates anything about the best time to buy a townhouse. The sales that closed in April got under contract in March. This is when snowbirds are leaving.
Snowbirds tend to rent, not buy. I don't think you're in competition with snowbirds for townhouses in December, or any other time. I have shown many, many properties to snowbirds, but I can't remember ever selling anything to a snowbird. They come to their senses when they realize the expense and risk of owning a property that's vacant most of the time.
You can see on page 6 that sale prices peak in June. This is because most of the closings are in June, and that's because we have more buyers competing for the properties in May than in other months. Seems weird that people would want to move in June, but the school calendar is driving that.
The problem from a buyer's perspective is that demand is high and supply is low. On page 4 of the November sale statistics, you see there were 1,266 sales (buyers = demand). On page 10, you see there were 4,069 listings (sellers = supply). 4,069 divided by 1,266 = 3.21 month supply of listings. This is very low. Anything under a six month supply is considered a seller's market.
Why is demand high? Could be the down payment assistance program for low income buyers, and also the insanely low interest rates. Rates have gone up 0.5% since the election. Apparently this is because investors think the bond market rates will go up as the Republicans spend money on infrastructure without raising taxes to pay for it. When bond market rates go up, mortgage interest rates go up. So the disappearing down payment assistance funds and the rising interest rates may be what is motivating some people to get off the fence and buy. Also, there just isn't much to buy, so well-maintained, well-priced properties are often selling in bidding wars. Yes, bidding wars are back.
I think you need to buy when the property you want is on the market. Trying to predict when you will have less competition or greater inventory is probably not going to work.
Sorry, I wish this were easier, but that's the way it is now.
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