Foreclosures Make Up 22% Of All Sales In Tucson Today -Down ...

December 19th, 2012 by Michael Oliver

Foreclosure sales in Tucson are steadily making up less and less of the market. Not long ago (from 2009-2011) foreclosures made up between 40% and 60% of all Tucson home sales. Foreclosures pushed down home prices by flooding the market, lowering prices, which in turn circled back on itself and created more foreclosures. This was a difficult cycle to break in the Tucson housing market and held as the normal for many years. At this point heading into 2013 I would say a new market has formed which will continue to push the foreclosure numbers down until they make up less that 5% of the overall sales. This ?under 5%? is a historically ?normal? figure.

In a normal real estate market those 5% which are foreclosures generally speaking are low quality and low priced fix-up homes that the banks couldn?t sell any other way. As it is today in Tucson buyers can still find decent quality homes that are foreclosures at basically every price point. This type of ?clean foreclosure? will be a thing of the past (at least in any great quantity) within the next 24 months as I see less and less of them hitting the market every day. As is stands today the foreclosures in the market are generally under priced compared to what other homes are able to sell at. The foreclosures need more work/ repairs than a regular sale, but due to their under market pricing foreclosures sell for over 99% of their listed price. This indicates buyers and having a harder time finding better deals in the market pushing them to pay almost full price for any foreclosure that needs little work or that is priced to sell.

I estimate by the end of next year (2013) foreclosure sales will make up 10% to 15% of all sales with 2014 being the last year of any significant number of them available. With Tucson home prices steadily climbing higher, low mortgage rates, and more buyers in the market than at any point in about 7 years the Tucson real estate market looks to have gotten past the down market which lasted from early 2006 until about January of 2012. For those looking to buy a new home this year (and going forward) should allow new buyers to feel confident the home they buy has a small chance of losing value and a high chance of appreciating steadily for the next few years as in my mind Tucson home prices are still under valued relative to what they could be by 2018.

-michael

Source: http://www.sellingtucsonrealestate.com/blog/foreclosures-make-up-22-of-all-sales-in-tucson-today-down-from-43-last-year/

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