March Residential Sales Statistics

Instead of taking their usual two to three weeks to leisurely compile the residential sales statistics, The Tucson Association of Realtors published the March stats on April 3. I think providing these sale data is the most important function of TAR, so I'm glad they finally agree with me.

After a 6.8% increase in average sale price from January to February, we saw an 8.1% decrease from February to March. Number of listings continues to decline, down to 7,415 in March. Happily, the number of sales was up 35.36% from February to March, with 892 homes sold last month. 7,415 listings divided by 892 sales equals an 8.3 month supply of listings. This is a huge improvement over the 13 month supply we had a few months ago. When we get back to a six month supply, the market will be considered balanced, with no advantage to the buyer or the seller.

The low prices combined with unbelievably low interest rates (4.5% owner occupied! 5.5% investor!) are the primary movers of houses right now. Savvy buyers see this as a once in a lifetime opportunity.

The luxury market remains weak, with only 15 sales over $750,000. Eighty-six percent of the sales were of properties under $300,000.

In my own business, I am seeing several first time home buyers who are excited about the $8,000 tax credit. This is free money that no qualified buyer should pass up.

Open House at 211 E 2nd St

When you're through walking around the Fourth Avenue Street Fair this weekend, head a few blocks northwest to the fabulous house I will be holding open from 1 to 4 on Sunday. 211 East 2nd Street is two blocks south of Speedway between 5th and 6th Avenues.

This 1912 Craftsman style bungalow is quintessential West University. Of course, it has an embracing front porch, maple floors, big windows, French doors, high ceilings, rich wood accents and character galore. But there are surprises, too. You'll say "I'm going to do that at home!" when you see the shower that reminds me of a Japanese garden.

The kitchen has been updated and rearranged so you can happily cook holiday meals here that you will serve in the formal dining room. The pool is the highlight of the back yard oasis.

This property is listed by Susan Denis of Realty Executives Southern Arizona for $435,000. The seller (a fellow Realty Executives agent) has a fabulous sense of design, and the furnishings are enchanting. You can have everything in the house except the art, electronics, and the kitchen knife set for only $5,000 more. Move into this dream home and you don't have to buy a single chair, towel or dish. You won't want to leave this warm and serene retreat, and here's a rare opportunity to buy the ambiance along with the house.

National Appraisers

Effective May 1, all lenders must submit a request to a national appraisal clearinghouse and an appraiser will be assigned to appraise the property. Currently, lenders choose their appraisers. This usually means the lender is able to get the appraisal done quickly by a competent appraiser. The perceived downside is that some lenders may pressure their appraisers to cook the appraisal and overvalue a house so a sale can close or a mortgage refinance can occur. This is the problem the national appraisal clearinghouse is supposed to fix.

I don't know if anyone has any statistics on how many bogus appraisals were the results of collusion between the lender, the real estate agent and the appraiser. It would be interesting to know whether this problem was big enough to warrant this "solution". In general, I don't think borrowers are going to benefit from this new policy. They are going to pay more for their appraisal--perhaps $150 more--and that fee will go to the clearinghouse to pay them for the appraiser referral. The appraiser will make less. The worst part is the delay caused by this added layer of bureaucracy. It can take up to three weeks to get an appraisal by this system, which some lenders have voluntarily adopted ahead of the May 1 deadline. We will no longer be able to get sales closed in 30 days. If the interest rate is favorable to the buyer on the day his contract is accepted, he won't be able to lock the interest rate for 45 days for free. He will have to pay at least 1/8 point (one-eight percent of the loan amount) for the 45 day lock. Locking for 30 days is free, but 30 days locks will be useless under this system.

I would like to know which industry lobbied for this legislation. Follow the money. I don't think this originated with a consumer group

February Residential Sales Statistics

The Tucson Association of Realtors has released the Residential Sales Statistics for February. Finally, some positive news. From January to February 2009, average sale price in Tucson increased 6.76% to $222,207 and median sale price increased 9.04% to $178,000. Is the downward tumble over? It's too early to tell, but other indicators are encouraging. Number of units sold were up 12% from the previous month and number of active listings were down 2.11%. With 7,352 listings and 659 sales in February, we have an 11 month supply of listings. This is far from the 6 month supply of listings that indicates a balanced market, but at least we are now heading in the right direction.

The increase in the FHA loan limit was a big help. Last year, FHA had practically no market share. Because conventional financing requires at least 5% to 10% down payment, FHA is the loan of choice for many borrowers with limited savings. FHA and VA loans accounted for 33% of the sales. Conventional mortgages (not government-insured) were 39% of the market, and cash accounted for 25% of the sales.

What is selling? The entry-level market is strong. Eighty-one percent of the sales in February were of properties priced under $300,000. While there were 1,297 houses priced over $500,000, only 38 of them (less than 3%) sold last month.

Quail on the Window Sill

Every spring, a quail couple will discuss the possibility of building a nest on the window sill of my home office. They walk back and forth, tapping on the window, and squeaking their comments about the pros and cons of the home site. Pros: 1) it's off the ground behind the security bars and 2) vines partially obscure the sill. Apparent cons: 1) when the chicks are born and get adventurous, the three foot fall to the ground may be hazardous to their health, 2) then there's that large animal with the camera on the other side of the window and 3) this year, there also seems to be a cat in residence. They always decide against the nest site, but it's fun to watch them up close.

New FHA Loan Limits

Back during the wild and crazy lending days (less than two years ago) of no documentation of credit worthiness, no income verification and no down payment required, conventional loans ruled. Nobody got an FHA loan because sellers wouldn't accept the repair requirements that went with them, and borrowers who couldn't put 3% of the purchase price into the loan couldn't qualify for them.

Now a borrower needs a minimum of 10% down to get a conventional loan. Those who don't have that amount are left with FHA.

Last month, FHA loans were used on 28% of the sales in Tucson. VA loans were 8%, conventional loans were 35% and cash sales accounted for 27%. FHA is the loan of choice for many first time home buyers.

After being temporarily raised last year, on January 1, the limit on FHA loans dropped to $271,050. This made home financing unavailable to a significant part of the population.

The new stimulus package passed this week raised the FHA limit to $316,250. This is welcome news, especially for people who have houses priced above $271,050. Now they have a better chance of selling.

In January, a whopping 83% of the home sales in Tucson were under $300,000. The higher FHA loan limit should help move more properties.

Ice Cream Truck

I was out doing battle with thorny plants in my yard this afternoon, when I was thrilled to hear an ice cream truck. When I was a little girl in Massachusetts, the sound of the ice cream truck would send everyone running for home to beg for ten cents so we could buy a push up or fudgicle. Even running on very short legs, we still had time to catch up with the ice cream man who slowly and patiently cruised the neighborhood, trolling for sweet-craving children.

Today's ice cream truck was playing "O Suzannah!", which made sense, followed by "Love Story" (the Ali McGraw/Ryan O'Neal thing) which didn't make any sense at all. The ice cream truck of my youth only played one song, "Pop Goes the Weasel". It was monotonous, but I guess children like the predictability.

I grabbed my camera, and only had enough time to get one shot of the tail end of the speeding ice cream truck. I think the driver is unclear on the ice cream truck concept. Anyway, I'm delighted to live in a place where the ice cream truck comes around in February because when it's summer in Tucson, eating ice cream is too messy.