Welcome back!

Happy Fall, everybody!!  While we normally back off in terms of real estate sales at this time of year, 2008 is proving to be the exception to the rule.  There are deals to be had and buyers seem to be more interested in getting a good deal than in listening to the doom and gloom in the media.  Yes, consumers are feeling the crunch, but for some, lower home prices help make living more affordable during these tighter times.

But enough chit chat.  Let’s look at the numbers.  I will compare the numbers from September 2008 with those from August 2008 and September 2007.

Homes Sales Volume and Home Sales Units

Well one of these went up and one went down.  Can you guess which was which?  Home Sales Volume actually decreased from August 2008 to September 2008.  It also decreased slightly (about 4%) from last year at this time.  However, Home Sales Units experienced an increase both from the month before (3.4%) and from the year before (21%).  As has been the case for the last few months, we are seeing a lot of short sales and foreclosures selling, which brings down the volume.  However, lots of homes are being sold, 934 in September alone.  I don’t see any sign of the market slacking off in response to the economic turbulence, at least not here in Tucson.  However, November and December will tell the more detailed story as homes that were already pending sold in September.  Homes that went under contract in September will close in October (reported in my market report next month) and November (reported in December’s market report). 

Median and Average Sales Prices

With huge amounts of distressed properties selling, these numbers are low and will stay low for a while.  Remember last month’s median sales price of $185,000.  Well, it’s even lower this month at $180,500.  The average sales price is down almost 9% from August at $217,400.  This reflects a 20% decline over last year’s numbers.  This is not a reason to despair, however.  It simply means that a lot of lower priced homes are selling.  Sellers with higher quality homes in good locations are still getting decent prices for their properties.  I just had one go under contract within 14 days of listing it with a full price offer.

Pending Contracts

Pending Contracts are where the rubber meets the road and is the best indicator of what kind of sales we will be seeing next month.  This month they are down from 878 to 836, a nearly 5% decrease.  Compared to last year, we see a 15% decrease.  For this time of year, this is normal, but I’m very interested to see how things progress over the next 60 days, typically a time of serious cooling off in the market.

Active Listings and New Listings

We saw a slight increase in Active listings this month as opposed to last month (a 1.2% increase).  Compared to last year, our active listings are down 14.5%  New listings increased by about 4.5% this month, but when comparing to last year, we are down 18% on new listings.  These numbers are small enough that they aren’t too much of a problem but I don’t want to see them continue to increase if pending sales decrease.  As it stands we have an 8.4 month supply of homes on the market.

Understanding MLS Designations

To understand the future of what may happen in Tucson’s real estate market, we need to look not only at currently pending contracts, but at some of the active designations.  There are two designations, Active Capa and Active Contingent that indicate the property has a contract, but is still “Active” in some sense.  Active Capa means that there is a contract accepted, but that others can be accepted to replace the first one.  This is a designation I see on many short sales that are still awaiting bank approval.  Active Contingent means that a home has an accepted contract, but there are contingencies (typically inspections) that must be removed before the transaction closes.

I just did a search on the MLS including all the types of homes for Tucson (counting manufactured, but not mobile homes) and came up with 975 houses in the Active Capa and Active Contingent categories.  The Actives with no contracts were 7931, which jibes with the MLS stats on Active listings.  There are also 479 contracts currently Pending.  During this month, many of the Active Contingents and Active Capas will become Pending contracts and will be a part of next month’s numbers.  And of course, as is the case with short sales, some of the Active Capas will become Active again.  There is still a lot of movement here with 1454 homes under contract right now

My Analysis

My analysis is that this is a very exciting time to be working in real estate, in the same sense that riding a roller coaster is exciting.  Regardless of the national media and the hoopla from the candidates blaming the other party for the economic mess (which both parties contributed to, by the way), people are still out buying houses here in Tucson.  Housing remains a fairly stable investment in a world of very unstable investments elsewhere.  Yes, your market value may go down temporarily, but over the long haul, you get a fairly decent return on your investment.

I personally see a lot of activity in the market.  I have gotten contracts on three of my listings in the last two weeks.  Two of them are short sales, so they will take a couple of months to show up in the stats.  However, if other agents are experiencing the same thing, we are about to have a really good time selling real estate.  Now please excuse me while I go sell a house or at least take a couple more listings so I can sell another one by the end of this month. 

Happy house hunting!

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