WHAT'S UP IN TUCSON REAL ESTATE JAN/FEB '23
The Tucson, Arizona area enjoys a thriving real estate market. Of course, there are ups and downs, as in all markets, that prompt questions in the minds of consumers. One basic fact underlies the Tucson area real estate market: the Tucson, Arizona area has experienced non-stop growth for decades on end.
Due to constant and consistent growth in population in the Southwest in general, the real estate market has provided good returns over the short, medium, and long haul.
Should current economic uncertainty worry you? Well, yes, I believe there's cause for concern. But, economic data over the last 6mo plus has indicated inflation is easing, the job market is strong, and there are signs of hope for economic conditions improving country-wide. Plus, mortgage interest rates have eased a bit.
Mortgage interest rates are a strong driver of demand for real estate. We experienced years of unprecedentedly low mortgage interest rates. We became a bit spoiled and expectations became skewed. The quick doubling of mortgage interest rates into the mid 6%s shocked consumers, and demand for housing quickly fell off. Prices naturally subsided a bit. But, it seems consumers quickly got a reality check realizing mortgage interest rates in the 6%s aren't bad (look at historical charts of mortgage rates), and demand has steadily returned. Lately, mortgage interest rates have eased a bit. I believe this bodes very well for the housing market.
Supply and demand for housing in the Tucson area are pretty well balanced at the moment. It's neither a “Buyer's Market” nor a “Seller's Market” at the moment. Homes are taking a more traditional amount of time to sell.
The number of Active Listings of Residential Properties in the greater Tucson area is up from a low of around 2200 listings a year ago to almost 4000 current market listings. This number is close to “equilibrium”. The average list time is almost two months (this is NORMAL unlike the recent past when homes were flying off the market in days), and many properties are taking longer than 2 months to sell. The average home price in the greater Tucson, Arizona area is in the low $300Ks. This figure has been consistently rising. That's a good sign for the housing market in general. The average price/per square foot is just over $200. That's up over 2% from last year. The sold price to list price ratio is at about 96% meaning sellers are slightly discounting (negotiating) their list price. Compared to the recent past, one can see we're in a much more “normal” market condition. Yet, the Tucson market is still competitive.
I feel Tucson's market is competitive because, in part, we're still a bargain compared to other metropolitan areas. Plus, Southern Arizona, and the Tucson area in specific, have very strong job markets.
There's a lot to love about the greater Tucson, Arizona area. In my opinion, our real estate market will continue to stay strong. Buyers and sellers should not fear overall economic uncertainty and should act on their particular real estate needs instead of holding off due to prognostications.
Email me with any real estate-related questions, and I'll either address them in my column or respond directly.
Check out this Blog in Inside Tucson Business - https://www.flipsnack.com/CC65D9DD75E/inside-tucson-business_0224.html?p=30