The January Effect

Chart: Total Sales Units vs Month 2004-2008

When one looks at the Tucson MLS statistics, an interesting pattern is quite evident. In the past 4 years, closed sales numbers hit bottom in January, then begin to climb again in February and March, peaking within the next few months.

The peak occurred in June in 2004, 2005 and 2006, with sales numbers March, April and May not far behind. The peak in 2007 occurred in May, but the numbers for February March and April were also not far behind. The numbers for 2008, while down considerably from previous years, had a significant percentage jump in February and March, peaking in June with 1034 closed sales, slightly behind May which had 1,025 closed sales.

Since there is a lead time between when a buyer looks at and decides to make an offer on a home and the closing, (lets say 45 days for argument's sake) you might conclude that it would be wise to have your home on the market in January to catch those buyers and the others that follow in February, March and April. I would agree with that conclusion.

Interest rates are now at historic lows, there is a "First Time Buyer" Federal tax credit available through April 2009 (as much as $7500 for married buyers who file jointly and $3750 for those married or not who file individually) Inventory has been reduced considerably since last year. History points to an improved market in the early part of this year, compared with the previous months, although the actual numbers may still be below last years, YTD. Regardless, a window of opportunity is opening for those who want to sell their home now, and January is the time to begin.

Census Releases Growth Figures. AZ in 2nd Place!

This just in from the US Census , Arizona comes in second, behind Nevada in population growth (percentage wise) since 2000. adding almost 1.4 million souls in that time frame.

Arizona's actual growth in population (not percentages) since July 1 2007 was 147,000, fifth behind Texas, California, North Carolina, and Georgia. Here is a link.

Check out These Homes

One of the ways that we promote our client's listings is to design and publish e-flyers. Here are three of our most recent ones:

2005 4 BR 2 BA Home for under $100 per Square Foot!

Big East Central House with Guest House!

Cute East Side 3BR with RV Parking!

They have been submitted to Oodle, Google Base, Vast, Yahoo, HotPads, Trulia, Zillow, Geebo, OLX, Backpage, DotHomes, CyberHomes, FrontDoor, and others, to get the maximum web exposure possible.

Thought you would find this interesting!

More Good News

More good mortgage news from the Federal Government. In a move to further push mortgage rates down, and stimulate the housing market, Treasury Secretary Paulson is considering a new plan to reduce mortgage rates. Further implementing the purchase of mortgage backed securities, the move could push rates to 4.5%, according to an unnamed government official. Here is more from Bloomberg News.

We have seen substantial reduction in mortgage loan rates in the past two weeks, one lender we follow had a Dec 2 quote of 5.25%, APR 5.404% for a 30 year fixed conventional loan and 4.875%, 5.135% for a fixed 15 year conventional mortgage!

Refinances are gaining steam and despite the cloudy take in the article, lenders do have money to lend and are offering it to qualified buyers with decent credit.

This is a big opportunity for someone who has been sitting on the fence waiting for a good reason to buy a home.

Change is Here

Well a lot has happened since my last post. We have elected a new president, the financial markets are in a tizzy and yet interest rates and the local housing market have been better than what many people might expect.

A local lender e-mailed me his rate card yesterday an it showed that there has been a downward move in the 30 year fixed conforming mortgage to 5.875 with an APR just over 6% @ 6.035. 15 year checking in at 5.5% with an APR of 5.765%. This is cheap mortgage money!

I remember when I started in the real estate business in 1989 and we were praying for single digit rates. It took a while for that to happen. The market was terrible, with the collapse of the S&L industry, the RTC properties flooding the market, IBM moving out of Tucson and difficult credit policies. Deja vu with a twist! As we got through those challenges, we will go through this one too.

The Tucson Association of Realtors came out with a new statistics report for October and although showing a slight decrease in sales since Oct 2007, it also shows a 4.16% increase in sales price over Sept 08. Listing inventory is slightly higher, but well below a year ago, which is good, since it lowers competition for your listing. The report is available on our web site. Click on the "Market Report" to view the pdf document.

Yesterday I viewed about a dozen properties in the central city. One thing that I noticed is that the properties that were priced right were being shown by agents who were working with buyers. Two things: pricing is key to activity and there are buyers out there!

Finally, with a new administration coming in next year, it might be wise to schedule an appointment with your tax person or CPA to get an early start on a strategy in the event that there are changes in tax policy. Currently we enjoy a $250K exemption in capital gains on the sale of a primary residence ($500K for married couples) This could change. Also, keep an eye on any proposed changes in the capital gains rate for investment properties.

Despite all of the negativity out there, I still see positive things ahead for our marketplace. Tucson is a great place to live, the weather is marvelous and Arizona is still a net gainer in population. We have the U of A and DM, not to mention Raytheon. There are buyers out there, some with cash. (We closed on a cash buyer last month who relocated to Tucson) Home prices are stabilizing and if you are a buyer, there are some great deals out there for you. I am counting my blessings.

Words of Wisdom

A few days ago, I had to drop off my car at the shop. Rather than take a taxi or enlist a friend for a ride home, I decided to walk. Holy Hope cemetery was near my route, so I took a slight detour through this old Tucson landmark. It's a peaceful place, with huge trees and cool, moist grass. It is also the resting place for many of Tucson's famous and not so famous pioneers.

I have always enjoyed looking at old headstones. It's a perfect way to get a bit of history and sometimes to find some wisdom. I found both that morning.

During my walk, I encountered the grave site of Clyde Wanslee. Mr Wanslee, who died in 1984 at the age of 70, had a car dealership located at the 5 Points intersection south of Downtown. The thing that I remember most about this car lot was his sign "Ugly but Honest" This lot was a fixture in the Tucson landscape for many years, and Clyde sold a lot of cars.

One thing that I learned at Mr Wanslee's grave site was that he was a champion cowboy.

And now for the wisdom: This was also engraved on Mr Wanslee's headstone:

"A good name is more desirable than great riches. To be esteemed is better than silver or gold". Prov 22-1

RIP Mr Wanslee. Thanks for the reminder.

Tucson a "Bicycle Friendly" Town!

The League of American Bicyclists named Tucson and Pima County as "Bicycle Friendly" giving the region a "gold" rating for education, engineering, enforcement and encouragement of bicycle oriented issues. Here is a link.