Tucson Real Estate Market | Selling in a Buyer’s Market (a tip)
October 23, 2006
Post Tags: buyers-market , dont-ride-the-wave , down-market , home-sellers , Tucson Real Estate
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On September 8, 2006 I wrote the article for our website
Tucson Home Seller - Price it Right or Keep it till 2007 I quoted this article in a blog the other day Tucson Home Sellers Price is Right or Jeopardy. Articles and statistics in the paper keep saying the prices for Tucson homes is coming down. The median sale price is lower for September 2006 than a year ago as reported today in “The Arizona Daily Star” Median used home cost lowest since June 05. This is just the latest news reported this week. Nationally asking and selling prices of homes is coming down, often referred to as “a normal market”. Normal or not the trend in this market is DOWN. Asking prices are DOWN, selling prices are DOWN, the direct of our residential market as a whole is DOWN!
Riding the Tucson Real Estate Wave.
A couple bought their Tucson Home in 2005 and fully intended to move into the home when they were being transferred to the Tucson area. They purchased the home in the spring of 2005 for $235.000 they added upgrades of approx 10,000 bringing their investment dollars to around $250,000.
The transfer didn’t happen and wasn’t going to either. They needed to sell their new home in Tucson. They knew the real estate market in Tucson had appreciated significantly during the spring and summer so they figured they could at least make a small profit on their purchase. They listed the home in early December of 2005 for $337,500. Their new home was in a new subdivision that wasn’t build out yet and they were caught in Tucson New Construction Buyer Be Aware. They were competing with the builder to sell their new home.
The other thing that happened in Tucson was totally unpredictable. On Thanksgiving weekend 2005, it was like some secret memo went out and all the buyers left the area. Everyone knew the market was going to cool and slow down, but no one knew just when it was going to happen and I don’t think anyone thought it would be a sudden drop, more a gradual cooling was being predicted. Well it wasn’t gradual.
The buyers, investors, and speculators hit Tucson like a plague of locusts and they left just as quick.
The couple waited a few months with little activity on their home so they reduced the asking price to $334,000, a few more months went by and they reduced it again to $325,000. Fall 2006 arrived and they reduced it to $295,000.
But in the time their property has been on the market, there have been many other new homes in the same subdivision go up for sale. Some were purchased last year by investors and speculators that are now “flipping” the homes and finding the market saturated with listings. The builders have also just completed selling the remaining homes that they built last year and some that “came back” to them as well. The builder greatly reduced their asking prices just to get them sold.
This is just one example of a trend that we are seeing in this market; sellers gradually reducing the asking price hoping to get as much for their home or investment as they can.
But as everyone reduces with the flow of the downward market there is no perceived advantage to their newly reduced properties because everyone is reducing at the same time and at the same rate. Sellers are following the market and not leading the market.
In our example above, had the sellers started where they are at today, they would have sold the home and made a small profit, but by starting so high and following the market down, even today at $295,000 they have competition from similar homes in the area like theirs that have reduced their asking price to $279,000.
In the Tucson real estate market today and in the near future, it doesn’t look like prices are going to be up. We had approx. 4000 active listing in the spring, we now have, according to the Tucson MLS, over 9400 active listings. There are a lot of homes for buyers to choose from right now.
For home sellers in the Tucson market, the real answer to selling your home in this market is pricing. Price it right, and then if you really want to sell it you might want to consider reducing that asking price just a little more.
I know this isn’t what anyone wants to hear, but it is something sellers need to hear. While it may seem you are getting less than you thought, you are probably making more than you would have if our market hadn’t seen such appreciation over the last couple of years.
Right now in Tucson with our high inventory of residential homes, if you have to sell your Tucson Home don’t try and get more than your neighbor did last year. Don’t ride this down market wave.
