Several national media investment analysts are now recognizing the Tucson Arizona area is one of the hottest opportunities in the United States for real estate and land investment.
The projection by the website Realtor.com picked the best places for investors right now selecting areas where inventory has fallen. The areas were selected on the criteria that demand hasn’t risen steeply yet, and where the job market is on the upswing.
The study found in Tucson, foreclosures plagued the market, but things may be looking up — and investors are taking notice. The facts are encouraging and signal a quick turnaround on the near horizon.
The city ranked No. 1 on Realtor.com’s list of top 10 investment markets for this year. Despite prices falling 31% during the housing bust, foreclosure inventories are now declining. Still, the median list price in Tucson was an affordable $170,000 in February, 3.03% higher than a year ago. Homes are selling 12% faster than a year ago. The area has the benefit of being a vacation destination as well as a college town, Research from the website shows that 33% of all sales that closed in Tucson in February were cash sales, suggesting a high level of investor activity.
Built from Realtor.com data updated through February 2012, the report put Tucson, Ariz.; Austin, Texas; and Kansas City, Mo., as the top current real estate markets to invest in. The top ten list was built by analyzing the housing inventories, price trends and unemployment rates from the Bureau of Labor Statistics for 146 markets Realtor.com tracks.
Thanks to the jobs boom surrounding the University of Arizona and the Davis-Monthan Air Force Base, and an 8.19 percent drop in real estate owned (REO) properties along with a 3.03 percent median house list-price increase from a year ago February, Tucson, Ariz., tops the list. Several national news outlets picked up the report on Arizona land.
Even Tucson Arizona contractors whose business has slowed because of the decline in new-home construction have gotten into the game. Lower land prices are ripe for investors with cash on hand who are considering building a home now and hold onto it until prices rise even more. While values have dropped and investors are swooping in to pick up deals, the presence of such buyers indicates they have confidence housing prices in Tucson will eventually rebound.
At least one report on Tucson Arizona real estate and land indicated a more wide-ranging level of buyer has confidence right now. The latest trend numbers prove the market is only headed for more demand. There are 2170 active listings for clean sales in Tucson with 883 under contract. That is a 28% pending ratio.
The breakeven from a buyer’s to a seller’s market is 25%, which puts the Tucson Clean Sale Market closer to the Seller’s Market category than it has been since 2007. Remarkably, there have been 2161 “clean sale” homes successfully closed in the last 6 months, the best number seen in years and the inventory has dropped for four months indicating there will soon be more buyers who want to purchase lots and build their own homes. Average sales prices are also going up as the average sale price for clean sales in Tucson is $237,029.
Buyers can identify with attractive properties and are willing to pay good, fair market prices for them.
The February median list price for a home headed to market was $170,000, about 3% higher than it was this time last year, according to Realtor.com. The number of REOs (bank-owned homes) for sale is down 8% from February of 2011 and the number of foreclosures scheduled for sale has dropped 40%. Sales have also picked up, decreasing inventory levels. Single-family houses and condos are selling 12% faster than they were a year ago, averaging 86 days on the market (the national average is 111). The Tucson Association of Realtors reports the total number of sales was up 16% in February from the same month a year ago due to a drop in foreclosures and a stable employment rate.
“It’s very exciting news” said Realtor Tricia Friedrich who sells Arizona land just outside of Tucson. “We’ve noticed an increase in activity and the home buyer is now looking for better options.” Friedrich handles lot sales for 2.5 to 5 acres starting at Just $69,900.