Million Dollar Home Tour

Yesterday I spent the greater part of the afternoon touring some of the finest homes offered for sale in the Northeast area of Tucson. Asking prices ranged from $1.4 million to almost $3 million. The homes sizes ranged from about 4400 to 7800 square feet. All but one had 5 bedrooms and at least 4 baths.

Most of these homes are of fairly recent vintage and are fully equipped for comfortable, modern life. A few offer horse facilities, with corrals and barns while others boast unparalleled city views that stretch into Mexico.

The lots for these homes are generous, ranging from 3.3 acres to over 7. Lots of privacy here!

Construction was varied, from rammed earth to stuccoed double adobe to modern frame stucco. Flooring was also eclectic. I saw large format Saltillo, natural stone, gleaming hardwood and polished concrete. There was something for everyone.

Most of these homes have a Southwestern flavor and the styles were typically Santa-Fe with a couple of exceptions. One home that was literally nestled in the arms of the Catalina mountains offered a modern, contemporary style that would be comfortable anywhere in the world, but distinguished itself for the Sunbelt lifestyle with a wrap-around porch where one could follow the Sun and catch 100 mile views.

All of the homes offered outstanding guest facilities, some more elaborate than others. All were of a style visitors would be hard pressed to leave. Typically included was office space, upgraded kitchens, dining areas and multiple bedrooms. One even boasted a screened room for pets and people! These are the guest houses, mind you!

Two of the seven homes that I saw seemed to offer the best value. If you would like to have my opinion regarding the winners on this tour, give me a call or an e-mail and we can talk about finding your place in the Sun.

Here is a link to the properties that I saw.

Short Sales, Foreclosures and You

I attended a 2 day series of classes this week that outlined the pitfalls and advantages of short sales and forclosures to the homeowner, lender and real estate broker. There is a lot of misunderstanding in the marketplace regarding these issues and the time was well spent.

According to the media, there has been an "explosion" of foreclosures in our marketplace. This is not necessarily the case. The average percentage of defaulted loans in Arizona since the early nineties has been about 1.5% of the total mortgages, now it is about 3%. Of course, that is a 100% increase in defaults, but the media neglects to mention that 97% of the borrowers out there are still current with their loans. Of course, things may get worse, but let's save the bleak headlines for when (and if) it really gets bad.

Another misconception is that the main cause of all of the secondary loan market problems are non-performing loans (defaults) Not true. The primary problem that lenders have encountered is a lack of liquidity. Managers of retirement funds, insurance company portfolios and others who have traditionally invested in mortgages are now holding back and are reducing their exposure to mortgage backed securities.

The current solution to this crisis is to "freeze" adjustable rates for some sub-prime borrowers. My question to you is: Do you think that government tinkering with mortgage yields will help or harm the secondary mortgage market? Will an investor want to buy a mortgage if the yield can be arbitrarily changed by the government, in the name of rate relief for the consumer? I think not.

So what is a "Short Sale"? A short sale is a sale of a home for less than the mortgage that encumbers it. The Seller will net no money in the sale. The lender will not agree to a short sale if the seller has other assets (IRA, other property, etc) Properties that are listed in the MLS as a "short sale" may not necessarily sell for the price that it is listed for since the lender has to sign off on the deal. Response times can be long. It is not a sure thing. There is a lot of homework for the seller and listing broker to do, and you may not know how far along they are in the process when you make your offer.

So how many properties are involved in "short sales" here in Tucson? Let's look at central Tucson for now. According to the Tucson Association of Realtors MLS, since June 18th 2007, there are currently 19 single family homes listed as "short sales," 5 more with offers on them, 4 "Expired," 7 sold, and 23 withdrawn or released. These are not huge numbers, but bear watching. I will later post the numbers for all of the MLS.

Next Post: Foreclosures!

Opportunity Knocks for Canadians!

In a recent article in the Edmonton Journal, Brian Wruk, co-author of The Canadian Snowbird in America says that "all of the moons are aligned" for Albertans (and other Canadians as well!) to buy property in Arizona. The "moons" are 1) a strong Canadian Dollar (called the Loonie) 2) a soft housing market in Arizona, and 3) the frigid temperatures in Canada. Wruk thinks that the bottom may not yet be here, but I have not yet known of anyone who has been able to accurately forecast a market bottom, or a top, for that matter. The Canadian dollar is now above "par" vs the greenback when only a few years ago it was only worth 64 cents US. This strength in the Loonie is not a forever sure thing, as the current market numbers show, but it is still remarkable. Combine this with the recent drop in asking prices in most markets in Arizona, this does in fact look like a great opportunity for Canadians to purchase a home here. And the weather in Tucson is (usually) great.

Snowbirds: Is Florida Out?

A Canadian friend e-mailed this link to me today. It's a story from the Toronto Star outlining the apparent reluctance of Canadian Snowbirds to commit to the purchase of Florida real estate now despite the abundance of properties for sale, a big decline in prices and a historic upsurge in the Canadian dollar or "Loonie." Reasons cited were the general negativity of the local professionals and press regarding Florida's real estate market, excessive insurance rates for coastal properties due to the threat of future hurricanes, and an unfair tax structure for non-resident owners of Florida real estate.

This bodes well for Arizona. Unlike Florida, non resident owners of real estate here are not punished at tax time, we have no hurricanes, and hazard insurance rates in Southern Arizona, although climbing, are not anywhere near what Floridians are paying. We also have an abundance of real estate for sale, and prices have dropped to more reasonable levels since 2005. This is a great time to buy, and sellers are more motivated than ever.

And the Sun shines here a lot! (over 300 days a year!)

So to my Canadian friends I say: Take a look at Tucson. Your Loonie goes a long way here. Bring your golf clubs too. Find out what Tiger already knows: Tucson is a great golf city as well.