New figures out this month show a steady trend for those wanting to buy property and build a new home near Tucson, Arizona. The reasons: prices are going up as inventory of existing homes shrinks and more people seeking new homes decide to buy their own lot near Tucson and build on the acreage.
Sales of existing homes were up in February, along with average selling prices, showing some encouraging signs the region’s housing market is continuing to move off the bottom toward stabilization.
According to this report on Tucson area real estate in February, total sales for the month increased 11.4 percent from January to 1,019. And although the median sales price held steady at $125,000, the average sales price was up almost 5 percent to $164,513 from $157,059, according to the Tucson Association of Realtors Multiple Listing Service report.
For the first two months of 2012, the pace of sales is averaging 967 per month, 16.5 percent faster than in 2011. Homes in the $200,000 to $299,999 price range accounted for 14 percent, or 146, sales. Overall inventory fell in February for the fourth consecutive month. The selling price per square foot across the region is showing signs of strength.
Home permits in the Tucson area are also increasing. Like the market for existing homes, early signs of stability also are beginning to show up in the new construction sector. New home permits issued for the first two months of 2012 are up 16 percent over 2011.
On a monthly basis, total permits issued in the region grew to 154 in February, up from 125 in January.
Michael Orr, director of the Center for Real Estate Theory and Practice at ASU’s W.P. Carey School of Business told Arizona Week ” … Most of the signals I look at are looking up.”
Orr said the Tucson real estate market usually follows Phoenix trends by up to 12 months. The two metro areas take in nearly 90 percent of the state’s housing market.
Orr said prices are beginning to rise as housing inventory falls, and that is leading some builders to become active again. “Each week that goes by, we’re seeing less and less homes available, so anybody who’s in the market to buy is getting more frustrated and more desperate, and that tends to mean they’ll bid higher prices against their competition,” he said. “The good news is that we’re seeing a continued downward trend in foreclosure activity in Arizona,” Orr said the state’s housing market has shifted in the last few months, and unlike others, he sees recovery coming. “People are saying we need to get used to the market being this low and it’ll stay low,” Orr said. “I don’t think that’s going to happen. We’re going to have something of a snap back. And, given the very low supply (of houses for sale) we currently have, it’s going to be a feeding frenzy for quite some time.” Prices are rising, in some cases as much as 5 percent a month, he said. Still, because at the bottom of the market they had fallen by 58 percent, there is a long ways to go to get back to normal. Even with rising prices, home ownership is a relative bargain, both in home costs and mortgage lending rates, said David Godlewski, president of the Southern Arizona Home Builders Association. In an Arizona Week interview, he said it is a good time to buy. A report from a popular realty website shows that, on average, Tucson homes are being sold for more, there are fewer homes on the market, and they are staying on the market for longer. Over the past year, the median home price here jumped 3.16 percent, according to some respected sources. One of the places offering new buyers options is Red Hawk at J6 Ranch, only a few minutes from Benson, Arizona in lovely Cochise County that features a small town atmosphere with all the amenities of dining and shopping. The property is close enough to Tucson for work commuting and additional entertainment and lifestyle choices.
For those seeking a lot to build a new home, the utilities are already in place. Water, sewer paved streets reduce the number of headaches that new homebuilders usually face. Figure in the cost of how the lot will improve in value if these utilities are secured and in place for years to come. Cochise County, just a half hour drive from downtown Tucson via freeway, is the best available option for building lots near Tucson. It is a mix of suburban to rural setting with the room you need for a comfortable new home setting.
Red Hawk at J6 Ranch has already attracted attention and acclaim. The success of this development and its sold-out sister property shows buyers know what value they have in this location near Tucson Arizona when choosing building lots.