The Catalina Foothills

against all odds

Every time I see one of these it drives me nuts.

5950 E Avenida Arriba was listed today for $725,000.
But here's the rub. Prior to today's new listing, Avenida Arriba was on the market for six months with no takers, and the listing expired last month when it was listed at $649,000.

So why would you come back on the market a month later, in a much weakened financial environment, and raise your price $76,000 -
or nearly 12%.

And then people wonder why their homes aren't selling.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

really dumb pricing

Just inside the guard gate at Catalina Foothills Estates 10 the little house that had served as the former sales office for Cat 10 many years ago, finally sold today. But because it was so foolishly overpriced for so long, it ended up being sold by the lender.

A real estate agent (who shall remain nameless) listed it in July 2006 for $749,000, and that was it, it couldn't do anything but fail.

It's a teeny house, more like a doll house really- 1004 sq. ft., or $746/sq. ft. at that (ridiculous) price, with one bedroom, one bath, and just a little mini-kitchenette, and it sits adjacent to the guard gate and straddles Hacienda del Sol rd. So not the most desirable location either.

So after struggling through two years in a declining market, and playing with the price - lowering it, then raising it again - it finally sold today for the fire sale price of $202,000.
And to make matters worse, just one year before they put it up for sale at $749,000, the sellers had bought this little house for $405,000. What or who made them think they could get $749,000 for it 12 months later. 

Here's another.

A house at 6052 N Paseo Zaldivar in Alta Vista was listed for three months at $1,499,000. Way too high, so of course it didn't sell, and the listing expired, and they got rid of that agent and got a new one.

And the new agent, or someone, had a very different idea of what the house was worth, and now they listed the very same house for $849,000. So in one swoop it went from $1,499,000 to $849,000.
At least one of those prices is way way off base, wouldn't you say.

These are just two recent examples of dumb pricing, and there are many more. So whether you're buying or selling, make sure your agent really knows the Foothills market, understands pricing, knows what's selling, what's not, and for how much, and is not just blowing smoke and telling you what they think you'd like to hear. Mistakes like this can be very costly to your financial well-being.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

more on what's happened in Tucson Foothills home sales

Yesterday I did a little update on how sales have done in the last two weeks under the cloud of recent financial meltdowns, and concluded that things were OK, considering.

And while it's encouraging that even under these dismal conditions, we haven't shut down, and homes continue to go under contract and sell, that's just part of the picture. The other part is the months of inventory, the measure of sales relative to the number of homes for sale. And that picture is a little less OK.

So by price range - here's a look at the number of homes currently for sale, the number sold in the last 3 months, how many are currently under contract, and the resulting months of inventory for that price range.

$0 - $500,000; 164 homes for sale, 60 have sold last 3 months,
31 are under contract, and months of inventory = 8.2 months.

$500,001 - $1,000,000; 259 homes for sale, 46 sold last 3 months, 25 are under contract, and months of inventory = 16.9 months

$1,000,001 - $1,500,000; 66 homes for sale, 9 sold last 3 months,
3 are under contract, and months of inventory = 22 months

$1,500,001 - $2,000,000; 34 homes for sale, 3 sold last 3 months,
3 are under contract, and months of inventory = 34 months

$2,000,000 & UP; 28 homes for sale, 1 sold last 3 months,
2 are under contract, and months of inventory = 84 months

So at all but the lowest price range, it's a buyers paradise.
But for sellers, the odds are not good. see> what are your odds.

One caveat. In addition to the burden of the financial crisis, this sales data is for the last three months, and the summer months in the Tucson Foothills are typically the slowest time for home sales.
So things may pick up in the months ahead and offer a somewhat brighter picture going forward. But where we go from here really hinges on Washington coming up with a workable solution to the growing crisis.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

what's happened since 9/15/08

Since the latest wave of financial meltdowns started about two weeks ago, activity in the Tucson Foothills real estate market has been surprisingly OK, well not bad, better than I expected anyway. Considering.

Here's a look at what's happened since Monday 9/15

We've had -

72 new listings (50 are actual new listings, 22 are re-listed old listings) and that's OK because it means that people continue to believe they can sell their homes. And I hope they're right.

and they may be, because a surprising 29 have gone under contract,
priced from $234,900 to $1,795,000. And 29 under contract is very respectable for any two week period. But given what's gone on in the last two weeks it's down right miraculous.

11 homes have fallen out of escrow and come back on the market.
I'd guess that some are a result of lenders new tactic of backing out of deals, plus some buyers getting cold feet and then the usual inspection issues.

18 homes had price increases. Don't ask me why.
Although most of those were in Villa Milano at Rancho Sin Vacas, see
 ships in the night for more on that.

71 had price reductions. And that's a lot, but what do you expect, price increases.

and 9 have sold, priced from $255,000 to $1,550,000

So not bad, OK really. But now, with the bailout having failed to pass and the stock market really tanking, we may be entering a new chapter.

Calling all cash buyers.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

drop by any time

The attached article from the Chicago Tribune - Blank canvas or wasteland? - asks the question of whether it's better to sell your home while you're living there, or should you move out and offer unfettered access. For me, there's no contest.

If you can,  definitely move out. Let people come see your home at their leisure- with no appointments, no pressure and no strings or planning required. You'll get more showings, the buyers will be more at ease, and you'll sell it quicker.

But if you do move out, either leave some furniture and accessories behind (if you have the right stuff) or have the house professionally but lightly staged. Empty, it often looks desolate, vulnerable and sad. 

In either case, stage it with just enough furniture and accessories to liven it up a bit, define the space and give a sense of how the rooms can work. But don't make it personal. Do your best to make it look and feel like a suite at a good hotel. Spotlessly neat and clean, comfortable and attractive, but with not a clue that anyone had ever occupied that suite before you arrived. Nothing personal.

and see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

something's happening out there

Perusing the Tucson MLS this morning I see a quite a few new listings and price reductions for the last 24 hours in the Tucson Foothills. Eight new listings - 6 of which are actually new - the other two are just re-listed for another go at it.

But two of the new ones are worth noting for their more rational pricing. 6595  E Placita Alhaja in Cimarron Foothills Estates just sold for $785,000 three months ago, and for some reason it went back on the market today listed for $800,000. And that's going to be an expensive change of plans. And in the scheme of things that's pretty good pricing, because most sellers would have listed it for $850,000 or more, because they expect to come out of it whole. However unlikely that might be.

And apparently deciding to take their lumps sooner rather than later, the owners of 4910 E Oakmont Dr in Skyline Country Club listed their house for $680,000 today, even though they paid $750,000 for it three years ago. OUCH!

NOTE- both of the homes above are range priced. For my take on range pricing see> range priced homes in the Tucson Foothills

And there were nine price reductions, all of them pretty much routine -except for 3550 E Camino A Los Vientos which has come way down in price in the 2 + years that it's been on the market. This is a new builder spec home in Eleven Arches off Hacienda del Sol.

It started out at $2,450,000 in December 2005 (at which point it wasn't much more than a hole in the ground) and over the next two years the price see-sawed up and down, though mostly down.
But getting serious, they've now lopped $499,000 off the price.
It's gone from $1,999,000 to $1,500,000. And if this is your cup of tea- new construction, 4885 sq. ft., 4 bedrooms/4.5 baths, pool, etc., on 1.46 acres in the heart of the Foothills, I'd say it's now finally getting into the strike zone.

And one more. The owners of 2230 E Camino El Ganado finally got serious too. Listed for $995,000 two years ago, this is a really nice house in a terrific Foothills location, but at that price it was worth a look, but not an offer. And though they dragged their feet, the owners finally got it, and reduced it to $775,000 recently,
and presto, it went under contract a couple of weeks ago.
And having now passed the final hurdles, it went PENDING today.  Congratulations!

and see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

what are your odds

An agent I know who's having a hard time selling one of her listings that's priced at about $2.0mil, asked me to stop by today and give her my opinion of the price.

Happy to do that I went on over. But before I looked around the house I told her I knew what the problem was and why it hadn't sold.

It's simple, I said. The problem is that it's priced comparably to other similar homes. yes it is, she said, but why is that a problem,  

well, because there are 50 homes for sale in this price range in the Tucson Foothills

and just 5 have sold in the last 6 months

So at best, each month your listing has a 1 in 50 chance of selling.
Those are your odds. Will you get lucky this month, next month or a year from now. Who knows.

So forget about comps and comparably priced, competitively priced and all that other jazz. That doesn't count anymore, because less than 1 home/month is selling in that price range. And that's what counts above everything else. 

And the only way to improve your odds is to be much more attractive than the competition. And the only way to do that is to price it way below the competition. I suggest 15 to 20% below.

Then you might have a chance. So either do that, or wait around until you get lucky. That's the market we're in in that price range.

and see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

ships in the night

In the piece I did yesterday I mentioned that Villa Milano at Rancho Sin Vacas has been slow to get off the ground.

I was reminded of Villa Milano, and wrote about it because it came up the day before in a conversation with a client friend of mine about Foothills real estate and opportunities and what's happening, etc.
So I went home, did a little research and wrote that piece. And I ended that post saying that since prices had come down recently in Villa Milano, sales had picked up a bit, and that maybe things were changing (for the better). I spoke too soon.

Because in a strange and coincidental twist, while I was busy writing about the recent sales and lower prices at Villa Milano, the folks
at Villa Milano were busy (making a liar out of me) raising prices.
I found out when I checked the MLS this morning and Villa Milano showed up with price increases on 12 of the new builder units-
after I just got done applauding them. Imagine that!

Here are a few examples of what they did. 

They raised them from
$675,000 to $751,730
$710,000 to $758,650
$535,000 to $617,250
$710,000 to $758,650
$545,000 to $629,660
$560,000 to $632,520
$550,000 to $632,520
$675,000 to $722,520

So now the 12 units they raised prices on are listed for an average of $349.50/sq. ft. And the four units that sold in the last six months- sold for an average of $224.82/sq. ft. See anything here that doesn't quite add up. And by the way, none of those recent sales were builder units. They were all re-sales.

Makes you wonder what they're thinking. Or if.
Are they so giddy about the few recent sales they believe things are now on a big upswing and it's all hats and horns from here on out.

Who knows. So I take back everything I said yesterday about Villa Milano. It does look like things are changing, just not for the better.

and see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

the villas at rancho sin vacas

Developed in 2005, Villa Milano at Rancho Sin Vacas is a small single family & town home community here in the Tucson Foothills that has been slow to get off the ground.

It's in Sin Vacas, a very nice guard-gated community high in the Foothills. And the homes are beautifully designed, built and appointed. They're nicer (in my opinion) and much newer than comparable homes in La Paloma or Ventana. And because of their convenient location and being in a gated community, they're ideally suited to second home owners.

But for some reason they haven't captured people's imagination.
I've mentioned them to clients looking at similar homes in Ventana or La Paloma, and explained the slow sales scenario, and that was that, we never went up for a look. So slow sales lead to even slower sales.

According to the MLS there are 21 for sale and just 9 have sold in the last three and half years. Maybe it's because there's no golf course, or because they just don't have the cachet of La Paloma or Ventana.

But one thing's for sure. When it was first developed and for a long time after, the homes were priced as if they were the only game in town. And unfortunately it's taken them about three years to realize they're not. Now prices are finally down, and maybe things are changing. Because of the 9 homes sold in the last 3 1/2 years, four of them have sold in the last 5 months. So we'll see.

and see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

more tales of how not to do it

Even accounting for a good dose of greed, this is a little hard to believe. How do I start.

The subject is a house in Finisterra that today, has once again been listed for sale. This time for $1,549,500.

The house last sold in December 2004 for $1,170,000.

And then, and apparently after some powerful smoke was blown around the table, it went back on the market seven months later for the arrogantly ridiculous price of $2,650,000.

That's not a typo, they listed it for $2,650,000, 7 months later.
To justify that price they said it had a complete remodel, but it didn't, not even close. It was more like a freshening up, a little here a little there. That's it.

Six months of that and of course no sale. So they took it off the market and waited until the market was really losing air before they put it back on again, in February 2007. And in a confounding strategic move, instead of lowering the price, they raised it $300,000, to $2,950,000.

So still no takers. So they got a new agent and reduced the price to $2,370,000. But talk about timing, they waited to do that until right after the mortgage mess hit in August 2007.

And again, no sale. So they got yet another new agent and reduced the price to $2,200,000. But by then it was January 2008. Way too late, they'd missed the boat.

Now they're on their fourth agent and the price is $1,549,500, but it's not their problem anymore. It's our problem. Because now the bank owns it, it's a foreclosure. In Finisterra. This house was carefully guided, step-by-step into foreclosure- through greed, ignorance, bad advice or all of the above.

And the lender, No Red Tape Mortgage. I swear.
See the listing HERE

and see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

La Paloma short sale, a first I think

6350 N Placita Arista  in La Paloma came on the market this afternoon as a possible short sale. The listing says, " SELLER HAS FORECLOSURE LOOMING!! "

Listed for $675,000, 2956 sq. ft., 5 bedrooms/3 baths, 1/2 acre, built in 2000 by architect/builder David Tyson. That's $228.35/sq. ft. in La Paloma. And that sounds pretty good.

Haven't seen it yet, it just came on the market this evening, and depending on how it looks and what they'll accept, on paper, it seems like it might be a good, or even a very good deal.

The online records indicate the loan amount at $600,000. And if that's true, there's some wiggle room.

See the listing details here (no pictures, yet)> 6350 N Placita Arista

I don't recall any other bank related sales in La P.

and see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

9 fast facts for Tucson Foothills homes, 9/23/08

for the period of Jan 1 to September 23, 2008 vs. same period in 2007

1. 543 homes are for sale today in the Tucson Foothills

2. 407 sold since 1/1/08 vs. - 493 same period last year = -17%

3. 121 sold in gated communities, 286 sold in non-gated areas

4. 334 single story homes sold & 73 two story homes sold

5. 214 homes sold had a pool, 193 did not

6. The average sale price is $634,922 vs $679,182  last year = -6.5%

7. The median sale price is $525,000 vs $548,500  last year = -4.2%

8. Avg sale price=$652,077 in District 16, $609,761 out of District 16

9. Avg $/sq.ft. = $216.02 vs $240.37/sq.ft. last year =  -10%

Since I last reported these figures on 8/26/08, sales have remained fairly consistent, but the average, median and the avg $/sq. ft. costs have all inched down a bit -both for the year, and vs last year.
And for the bigger picture, prices for single family homes in the Tucson Foothills are down just 9.7% from their peak year in 2006 - $703,616 in 2006, $634,922 so far this year.

But of course we've yet to see what the effects will be from the recent collapse of our venerable wizards on wall street.
So stay tuned.

**this data is for single family homes only - no town homes, no condos - listed,sold,etc. in the Tucson Foothills Jan 1 - Sept 23, 07 & 08. All data was gathered from the Tucson Association of Realtors® Multiple Listing Service.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

it's my WOW house

And after just one year on the market it disappeared from the MLS recently. Just one year. Well, it's a very special a one-of-a-kind house, and I could see it taking some time for the right buyer to come along.

It was listed last September for $5.5mil, but that didn't work.
So instead of pussyfooting around, they made three deep price cuts over the last year, and it left the market this month listed at $2.9mil.  

It's a bold contemporary design, sleek and spare, with wide-open living spaces and eagles nest views. Like living in a cutting-edge Manhattan loft, but on a hill-top in Tucson. WOW

7000 sq. ft., 3 bedrooms, 4 baths, with 25' X 100' floor to ceiling windows, and some of the most spectacular city and mountain views in all of Tucson.

I've shown this house a few times and heard various opinions about it from here and there, and not all of them complimentary, but that's understandable. It's cutting-edge and special, and not for everyone.
For me, I'm crazy about it, it's my WOW house, so yes, I'm biased.
And I'm hopeful it'll be back on the market soon, because judging by the the aggressive price cuts the owners made, it seems they really want to, and are ready to do what they have to, to sell. And I know there's a buyer out there for this house, and in a year or two I think
this will look like a missed opportunity.

 

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

short sales & foreclosures

Other than to point out the occasional short sale or foreclosure property that pops up in the Tucson Foothills, and offer my opinion of the asking price and opportunity, I haven't written much about in's and out's of pursuing short sales and foreclosures. And that's because I haven't handled a foreclosure or short sale transaction, so I don't have much to offer in terms of real street knowledge on that topic.
And happily, short sales and foreclosures are a very small part of the market here in the Tucson Foothills, so though it's a hot topic elsewhere, it's only been of passing interest here.

But I imagine some of you are interested in these bank owned or controlled properties. If so, Jay Thompson, a Phoenix broker and author of The Phoenix Real Estate Guy did a terrific post on short sales and foreclosures that may help you decide which, if any of these offerings, you want to get involved in -
Short Sales and REOs from the Buyer’s Perspective
And be sure to check out the links and comments to the post, many of them from Realtors who've been there-done that.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

not just scratching the surface

You see a lot of older homes here in the Tucson Foothills that claim to be TOTALLY UPDATED,  BEAUTIFULLY RENOVATED, or EXQUISITELY RE-DONE-LIKE NEW. Seems like totally, beautifully and exquisitely are subject to wide interpretation.

Because I find that many of them just scratch the surface, a little something here- a little there, just enough to give the place a freshened-up look, while around the edges and just beneath the surface all the old stuff still lurks.

Not this one. It was gutted, stripped down to the slab, and completely, beautifully and super energy efficiently re-built. 

they turned this

 

into this

and this

to this

and this

and from this

 

to this

 

and this

and the master bath

now looks like this

and this

Beautiful job. They went all the way. And now it's a Gold Level LEEDS certified house to boot. TEP guaranteed $59/month to heat/cool. Great design, beautiful materials, all new top-line systems and appliances, and it's super energy efficient. 

And it's for sale.
Listed for $749,000, it's 3180 sq. ft., 4 bedrooms/3 baths, 1 acre lot in Cimarron Foothills estates in the Tucson Foothills, District 16 schools, a small pool, 2 car garage, originally built in 1977 - and gutted, stripped down to the slab, and completely, beautifully and energy efficiently re-built it in 2007.

See the listing > 5626  N VIA SALEROSA

Call me if this interests you. It's special.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

is it fall buying season, already

Yesterday (in turn the tables) I remarked on the surprising number of homes that went under contract this week in the Tucson Foothills, despite the turmoil and havoc in global financial markets.

Now two more big ones have gone under contract, and in a flash too. Turmoil, what turmoil.
7308 N Mystic Canyon Dr, in Pima Canyon, listed at $1,549,000, and just 9 days on the market.
6072 N Paseo Zaldivar, in Alta Vista, listed at $1,795,000, and just 38 days on the market.

See them here> Mystic Cyn & Paseo Zaldivar

I admit, I was convinced this week would be a very dark one for home sales here in the Foothills. And though I still don't completely get it, I'm glad to see I was wrong and it's turning out to be quite a good one instead. Is it fall buying season, pent up demand, good prices, lots of inventory, low rates, gorgeous Tucson weather ...

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

the trickle up effect

THE WALL STREET JOURNAL reports that luxury homes are the latest victims of the housing crisis. According to the report, and not surprisingly, California, Florida and Nevada figure prominently in this latest chapter of housing doom. But on a happy note, and seemingly because Arizona does not figure prominently in this mess, any mention of Arizona is conspicuously absent.

In The Finest Foreclosures, " the housing crisis that swept through working-class and middle-class communities across the country is now creeping into the leafy driveways and the gated communities of the nation's most exclusive towns. The housing crisis is spreading to many luxury neighborhoods, as mansion-size defaults stun the industry."

 
This 5,700-square-foot home in Bradenton, FL was priced at $3.78 million but is now in contract for $1.1 million.

 
Purchased for $2.3 million in 2002, this 10,600-square-foot home has a private gym, media room and a resort-style cabana overlooking the pool and tennis court. Sale price is $1.75 million.

" For now, the biggest concentration of luxury foreclosures is in the Sunbelt. According to RealtyTrac, California accounted for more than half the nation's total of million-dollar foreclosures, with 4,756 homes in the year-to-date ending in August. Florida ranked second with 1,088, followed by Nevada with 215. California and Florida have for months been among the biggest losers in the national housing downturn."
Read it here> The Finest Foreclosures

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

turn the tables

With the deepening devastation of the financial markets this week, the odds were heavy that we wouldn't see much, if any action in Foothills real estate. And even the most rah-rah agents seemed pretty much resigned to that. I sure was.

Well I just took a look, and eight homes priced from $259,000 to $1,074,900 have gone under contract since Monday in the Tucson Foothills. That's more, not less than usual, for a normal three day period this time of year.

So instead of pulling out of the market because of all the fear and uncertainty swirling around, I'm guessing those buyers, some of them anyway, turned the tables and used it to their advantage to negotiate exceptionally good deals. That would have been my strategy, and it still holds because the fear and uncertainty is still very much with us.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

think big

Like 10,529 sq.ft. big.  Despite it's heft I'd forgotten about this house until today when it had a really big price reduction. It dropped from $2,5000 to $1,950,000. In the Tucson Foothills, it's at 3900 N Camino Blanco, and it's an awfully big bet for a spec house. Yep, it's new and it's a spec.

  

 

 

 

 

 

 

 

 

 

 

I wonder how many people are looking for a 10,000 sq ft house these days. Maybe in Beverly Hills or Greenwich, but in Tucson. But I also feel for the owner/builder. This was a big big project, and if it doesn't pan out, it's going to be an awfully big disappointment.

On the other hand, if you're looking for 10,000 sq ft, there are only two others available in the Tucson Foothills, so your choices are limited, and at $185/sq ft, this is a big house for the money.

See it here> 3900 N Camino Blanco

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

on the block

Priced to fail for much of it's time on the market, this house in the Tucson Foothills is now off to the auction block. It's very sad and unfortunate, but worse yet, it could have easily been avoided.

Over the last few years this house popped onto my screen constantly, with countless wild price swings. It was sort of amusing for a while, watching as the price was dropped & raised & dropped & raised- more times than I could count on my fingers and toes- it went as high as $1,250,000 and as low as $695,000.
Finally in January the third listing agent came on board and hit the bulls-eye, listing it for $719,900 and dropping it once to that magic $695,000. At that price ($169/sq ft) it went under contract four times, but for some reason it also fell out of contract all four times.

It sounds like there may be an opportunity for a good deal here, but I'd be concerned and inspect it very carefully before I jumped in.

 
4496 N Via Bellas Cata  Tucson, AZ 85718
This (terrible) picture from the auctioneer makes it look dowdy and small, but it's not, well it's not small anyway.

The house is in Bellas Catalinas, a very nice gated community in the Tucson Foothills. It's 4099 sq. ft., 5 bedrooms/5 baths, built 2006.
To be auctioned Wednesday, September 24th at 12 noon.
Here's a link to the auctioneer's web site, with more info, fine print and disclaimers > 4496 Bellas Catalinas

see my web site thefoothillsToday.com
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what me worry

The staggering events of the day on Wall Street seem to have not dimmed everyone's optimism. Despite the carnage, 8 new listings came on the market today in the Tucson Foothills, brave souls all of them. I'd have (chickened out) held off a day or two, just to see, but that's me.

But one of these new listings caught my eye, not only because they went ahead and brought it back on the market today, of all days - it's been on and off for the last five years - but in a further display of optimism they actually increased the price a smidgen, from $3,950,000 to $3,995,000. Five years on the market, why not wait a day or two 'til the smoke clears. Maybe even give yourself a chance to reconsider your pricing, in view of.

Anyway, it's quite the place, and it's in one of my favorite places, Skyline CC, for $3,995,000 - See it here, again> Javelina Dr.

see my web site thefoothillsToday.com
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all the wrong moves

In April of 2004 a house on Calle Del Ciervo here in the Tucson Foothills sold for $518,000. In January 2007, it sold again for $770,000, WOW, a whopping 48% increase, in not quite three years.
And no improvements or renovations had been made during that time either. Sounds like a ' have to have it ' house, you know, at any price.

Then just one year later, in January 08, and for reasons unknown, the new owners apparently didn't have to have it anymore, and put it up for sale again. And ignoring the (ugly)fact that the market had gone down and not up, and hoping I suppose to recoup some of their closing costs and commissions and come out of it just slightly bruised but not battered, they listed it for $800,000.

But the market went down, not up, so that didn't work out.
So they reduced it and reduced it again and again, until it was finally reduced to $600,000 two weeks ago.  At $600,000 it's a screamin' deal, and then it quickly went into contract.  Now I have no idea what it went to contract for, but even at list price these people are going to lose a bucket of money. If they'd listed it at a more reasonable price in January - when the market was less bad than it is now - it's very likely that they'd have sold it sooner and for more $$. oh well.

But it's almost beside the point, because given their poor timing, buying in 07 and selling in 08, I don't see how they could have even come close to breaking even. And worse yet, they paid too much for it to begin with. Even though the market here in the Foothills had been in decline for 8 months when they bought it - they still paid $770,000, a 48% price increase in less than three years. Too too much.

Yes, timing is everything, and along with that, they say (whoever they are) you make your money in real estate when you buy it, not when you sell it. They are right.

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gathering clouds

Sunday, September 14, 2008
From The New York Times online, In Frantic Day, Wall Street Banks Teeter

In one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself to Bank of America for roughly $50 billion to avert a deepening financial crisis, ... It remains to be seen whether the sale of Merrill, which was worth more than $100 billion during the last year, and the controlled demise of Lehman will be enough to finally turn the tide in the yearlong financial crisis that has crippled Wall Street.

The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of tens of billions of dollars in losses because of bad mortgage finance and real estate investments.

“My goodness. I’ve been in the business 35 years, and these are the most extraordinary events I‘ve ever seen,” said Peter G. Peterson, co-founder of the private equity firm the Blackstone Group, who was head of Lehman in the 1970s and a secretary of commerce in the Nixon administration.

... the problem here is there is leverage in the securities under the microscope and in the banks that own them. And to try and unwind it all at once creates a one-way market where there are only sellers, and no buyers."

The convulsions could lead to even tighter credit, higher borrowing costs and moribund capital markets, as securities firms and commercial banks try to further limit risk and preserve capital. Those moves could cause the U.S. economy to slow further.

From The New York Times online, In Frantic Day, Wall Street Banks Teeter

Earlier today I said, Because it ain't over, and the odds may get worse before they get better.

They just got worse.

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rolling the dice on high-end spec homes

Selling a spec home today in the Tucson Foothills is a roll of the dice. There are about 29 new spec homes priced from $1,074,000 up to $4,295,000 for sale in the Tucson Foothills today. And just 5 have sold in the last six months, less than 1/month. That puts us at about 2 1/2 years of inventory in the million+ spec home market.

Planned for and built when the market was flying high, they now sit vacant waiting for a buyer. And many have been waiting for a year or more, some much more. 

And beyond the spec home market, there are 95 used or re-sale homes priced at a million+ in the Foothills. And just 26 of those have sold in the last six months. So we've got roughly 2 years of inventory there.

So if you're a buyer, sure, it's an opportunity. But if you're an owner/seller of a spec home, what are the chances you'll get lucky and your number will come up this month, or next month, or the one after that. About 1 in 29. That's it.

So unless you've got oodles of money to keep pumping into that spec, I'd forget about what you were hoping to get, and do what you have to do to get what the market will bear, and get out now.
Because it ain't over, and the odds may get worse before they get better.

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how 'bout a little bidding war

A house on Cerrada Nopal in the old Foothills area of the Tucson Foothills popped into the Tucson MLS this morning as a new listing, for $445,000, or $163.66/sq ft.

The house is 2719 sq. ft., 4 bedrooms/3 baths, burnt adobe construction, built 1976, a pool, 2 car garage on .80 acres, for $445,000. It's been foreclosed and is being sold by the lender.
See it here> Cerrada Nopal 

 

I've seen and shown this house a few times over the years.
It sold in July 2004 for $440,000. Those buyers did a little renovating- new kitchen, new travertine floors, some new doors, etc, and sold it six months later for $523,000. But I don't think they did as well as they'd hoped.

Then it came back on the market last October for the pipe dream price of $829,000, and was reduced and reduced down to $769,000. Word was that it was a possible short sale or foreclosure, though it wasn't listed as one. And the online records indicate the outstanding mortgage amount is $701,250. Well it didn't sell, so now the lender owns it, and is taking a big hit selling it for what it sold for in 2004, before the renovations.

The listing says,  Seller will review any and all offers on 9.15.08
They've priced it to incite a little bidding war, and I'd be surprised if they didn't get one. The pictures above are from the previous listing, and right now the house doesn't look quite that pristine.
It needs some work, a facelift, this n' that. But at $445 

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the doldrums

Well it seems the doldrums of August have now extended their (unwelcome) stay into September. What happened, things are supposed to start picking up in September. But they haven't.
And if you hear otherwise, don't believe it.

Some agents define how the market's doing based on how it's going for them at that moment. If they're on a roll, then the market's good, if they're slow, the market stinks. " oh it's fabulous ..., I just sold...."

How nice for you. But what does that have to do with anything.
I hear it all the time, it's maddening.

Through today, September 11th, just 11 homes have gone under contract in the Tucson Foothills. One-a-day. With 540 homes for sale, selling at the rate of one-a-day, we have 540 days, or 18 months of inventory on our hands. But I'm sure it'll pick up, soon.

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in the market for a Foothills home at around $5.0mil

Then you might be interested to know that a home in Pima Canyon had a big price cut today - dropping from $5,900,000 to $4,995,000.

It's a new contemporary, a spec home no less, designed by Kevin Howard.  7000 sq. ft., 5 bedrooms/6 1/2 baths, on almost two acres. See it here> Sentry Ridge Ct 

$5,000,000 is a big bet for a spec home in the Tucson Foothills, the biggest I've seen. On the other hand, there's not much else to choose from at that price. And there are very few real contemporaries, at any price, too few in my opinion. So who knows, we'll see.

Correction, 9/13; I've been told that this house was NOT built as a spec home. Sorry for that. Apparently, it was custom built for owners who later changed their minds and offered it for sale. The plot thickens. 

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wrong again

A wonderful new house in a not so wonderful location Sold today in the Catalina Foothills. Surprised the heck out of me. And I remarked on it back in July when it first went under contract, 'and though I really liked just about everything about this house- with it's contemporary design and very open floor plan - I didn't think those things could overcome it's unfortunate location next to Skyline Dr anytime soon'

Skyline Drive is by far the busiest road in the Tucson Foothills, and this house backs right up to it. And I just couldn't see anyone popping for it in this market. At best, I thought it would only sell for a big discount from it's already much reduced list price.

Wrong. It sold for full list price. see it here> Calle Los Altos
(it's a lot nicer than it looks in the pictures)
Originally listed for $1,375,000, yeah sure, it was reduced and reduced again until it got to $998,000. And bingo, about a month later it went under contract, and sold today for $998,000.

I loved the house, it was one of my favorites. But I'd never buy it because of the location. And I never showed it to clients because of the location. I mentioned it to a couple of buyers, but prefaced it with a big disclaimer about the location. And that was that.

But I have a thing about the basics. The important things that you can't change need to be right. Being next to a busy road, or difficult access, or a west facing backyard. They're all a no-no for me, because nobody likes them, but you can't change them.
I'll take avocado appliances in a great location any day.

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short sales in the Tucson Foothills

Checking the MLS for short sales in the Tucson Foothills I find just 15 listed for sale. They range in price from $259,000 to $1,860,000.
And that's fewer than I expected, and given all the coverage short sales have gotten, it's probably a lot fewer than you expected too. 
See them here> Tucson Foothills Short Sales  **this link will expire
on 10/7/08

There are also 7 short sale homes currently under contract, plus 6 that have sold as short sales in the last 6 months in the Tucson Foothills, priced from $195,000 to $1,227,000 - as listed in the MLS.

So short sales account for a miniscule part of the Tucson Foothills real estate market. But you couldn't be blamed for thinking otherwise. Because regardless of where you get your news, the media generally reports short sales for a much wider swath of the landscape - focusing on state-wide reports, or the more notoriously upside-down markets like Phoenix, Vegas, etc, because that's where the short sale action is, and that makes for more dramatic headlines.

**this data is for single family homes only.

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an unhappy coincidence

Both the houses below marked with an X popped into the MLS today with a JUST REDUCED price. Dueling price reductions, eh.

They're both in the Tucson Foothills. And not only are they across the street from each other on Camino Padre Isidoro, but they're both listed by the same agent, and prior to this listing they were both listed by the another agent, and that agent owns both houses.
And sadly, both are now short sales. And though they're innocent bystanders, other property values along Padre Isidoro and in that community will suffer as a result.

6521 N Camino Padre Isidoro - 2393 sq ft, 3 bedroom 2 1/2 baths,
now listed for $499,000.
6530 N Camino Padre Isidoro - 2417 sq. ft, 3 bedrooms, 3 baths,
now listed for $549,000.
Here are the listings> Padre Isidoro short sales
And then make one trip, see them both & save gas.

**This is an unhappy coincidence, and in no way indicative of the short sale market in the Tucson Foothills, which is miniscule.

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welcome to fantasy land

The other day I showed some clients a house that had recently come on the market in the old Foothills section of the Catalina Foothills.

The house was listed at $2.6mil with one acre of land, and therein lies the problem. Three years ago, after having been on the market for eons, this house sold for $2.2mil, but it came with five acres of land.

The new owner then split off four acres and carved them into 4 one acre lots, which are now available to the buyer of the house- for an additional $1.4mil. So if you want what he paid $2.2mil for three years ago, the price is now $4.0mil. That's 82% appreciation after three years, in a market that's been in decline for two of those years.

I had all this info and sent it to my clients before we went to look at the house. And though the price didn't seem to make any sense, the house and land looked like it might fit the bill, so we went to see it anyway. We wondered if maybe they'd done a million$ refurbishment of the house, or something like that, to justify an 82% increase in price.

Well it was a wonderful house and very nice land, but no refurbishment, or any other value-added improvements had been done. The lots were just split, and no utilities or other  improvements were added there either.

So we left, never to return. It's insulting, they must think buyers as well as their agents, are stupid.

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the $264,000 question & a big short one

A house on Camino A Los Vientos in Eleven Arches was first listed in December of 2005 for $2,450,000. And then dropped to $2,000,000, then upped to $2,400,000, then dropped to $2,200,000, then dropped to $1,999,000, and to $1,799,000, and to $1,735,000.
And then today, in the old zig when everyone else zags strategy, and after almost 3 years and no takers, they raised the price by $264,000, to $1,999,000. I'm all for optimism, but come on, what gives. See it here> Camino A Los Vientos
It's new, sort of. And if by chance you're interested, you might want to go after it before they jack the price up again.

And another new house, a big one on Playa del Coronado in the Summit at Finger Rock, went short sale today. It started out at $2,495,000 in September of 06, and held at that price until this February when it was dropped to $2,395,000, then to $2,295,000 a couple of weeks ago, and then today they took a big whack at it, and dropped it to $1,860,000. That's $635,000 off where they started.
See it here> Playa del Coronado
The Summit at Finger Rock sits way high up in the Catalina's, so this house has incredibly stunning views, and looks to have all the luxury bells & whistles.

Click here> Foothills Spec Homes, to read more about this slice of the Foothills market.

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"I'm as mad as hell, and I'm not going to take this anymore!"

"Part of the reason some real estate agents are having trouble is they suck at what they do." YOW!

So says David Hatfield in a short piece on AZBiZ.com that comes out swinging at real estate agents who blame the media for the poor state of the real estate market. This is fun, the local media doesn't usually fight back like this.

" Can we please have a stop to whining real estate agents blaming the bad year they’re having on the media and the generic claim of "all that bad news they’re reporting." "Why? So you can take advantage of poor ignorant slobs who might not know any better?"
KA-POW!    Real estate agents can stop whining

That's an obvious question, and I think Hatfield's got a point.
Might there be some agents who are trying to make nicey-nice and gloss over what's really happening in the market. Do you think.

Lots of agents have blamed the media as the cause of this downward spiral. And that's bull, but then again I've taken a swing or two at them myself, but not blaming them for causing it, just for their sloppy, incomplete and therefore misleading reporting about the market.
You know, the usual.

The media didn't cause this, they just did their share of fanning the flames. But that's one of the side-effects of having so much media competing for our attention and coming at us 24/7. Imagine how Sarah Palin feels.

On the other hand, the media did their share of fanning the flames when the market was on it's way up too, and I don't remember hearing a peep of complaint about that from the agent ranks.
SPLAT!

Read it here> Real estate agents can stop whining

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Jan - August home sales for the Tucson Foothills

Instead of wondering how the market's doing, or having to rely on the latest gossip or media blurbs, here are the numbers - the facts - on how it's doing. First, the number of single family homes Sold by price range, then, the average and median Sold prices - for January through August 2008, compared to Jan/Aug 2007. 
For the Tucson Foothills.

Price Range	Jan - Aug 07     # SOLD	Jan - Aug 08    # SOLD	+/-%
$0 - $250K	7	13	+85%
250 -$500K	178	167	-6%
500 -$750K	153	113	-26%
750 -$1.0m	60	54	-10%
1.0 -$1.5m	42	29	-31%
1.5 -$2.0m	16	9	-44%
$2.0 & UP	9	7	-22%
Total Sold	465	392	-15.7
Avg List $	$711,026	$680,962	-4.2%
Avg Sold $	$680,104	$640,655	-5.8%
Median List	$569,000	$549,900	-3.4%
Median Sold	$545,000	$525,000	-3.7%
$$ Value of Homes Sold	$316,248,230	$251,136,592	-20%

Since the beginning of this year, average and median sold prices have crept downward, month after month in the Tucson Foothills.
And then in last months report I noted that the rate of decline had slowed, for the first time this year. 

Now another first. For the Jan - August period, those prices are now holding steady, or to split hairs, have even improved the slightest bit from last month. So two months of price improvement, however small, is very encouraging. But sales are still slower than last year, and we still have a relatively large inventory, though it too appears to be slowly shrinking, so we'll see. And now that summer is officially over, we'll start shifting gears, I hope, into what is usually a much busier time of year for sales.

If you've been sitting on the sidelines, while I don't think you need to jump right into the fray, I'd watch the market closely for signs of further improvement. And just as important, I'd watch mortgage rates for signs of further increases.

Also,
The gap in average sale prices between last year and this year has narrowed considerably since the July market report.
( -8% in July vs -5.8% now)
But this has more to do with the mortgage mess that hit last August and the sudden drop in sales and sold prices that resulted from that - than with any real improvement this year.
So until now, in comparing this year with last year, we've been in an apples and oranges situation. Comparing this years market- which is still seriously hampered by the constraints of the mortgage mess- to last years market, which had not as yet experienced that fallout, until August.

For the July numbers,  Jan - July homes sales in the Tucson Foothills

I look forward to your questions and comments.

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seller's regret, or flashbacks to offers past

Listing price two years ago: $979,000. Listing price now: $599,000
"Mr. Diaz still thinks longingly of his first potential buyer, whose offer of $770,000 he turned down near the end of 2006.

“I should have taken it,” Mr. Diaz said, his voice echoing inside the empty home he visits every few days to clean. “I guess I was a little cocky, or stupid.”

An article in today's New York Times relates the dismal, “if only I had sold when,” situation many home sellers in South Florida now find themselves in. Pangs of Seller’s Remorse in Miami Market

"It flew the highest and the farthest during the boom days, and now it is falling the hardest,” said Michael D. Larson, a real estate analyst with Weiss Research. The Case-Shiller index reported last week that prices of previously owned single-family homes in Miami fell by 28.3 percent over the last year.

While our little downturn here in the Tucson Foothills doesn't amount to a hill of beans compared to the south Florida market - prices here are down just 5.9% from last year - there is one striking similarity. There are many home sellers in the Tucson Foothills who now find themselves in the same " if only I had ...." situation as those in Florida.

There are many homes for sale today in the Foothills - including some that I offered a price opinion on, but didn't list because the seller believed they could get more - that are now, after multiple price reductions, listed below what they should have easily sold for a year or two ago.

I don't know if prices will fall further here in the Foothills or not.
But looking at the market, it seems unlikely they are going to go up anytime soon. So far this year, the number of homes sold is down 16% from last year and 27% from 2006. While the inventory of homes for sale is up, and the number of homes that have been listed for sale for a year or more is growing. And the % of sold price/list price is down, indicating that sellers continue to expect more while buyers (who control the market) are sitting tight until they can get it for less. And we're still stuck, with no end in sight, in this shaky mortgage situation, that makes it tougher to get money if you do want to buy a home. It's not Miami, but it' not a rosy outlook either.

If you're selling your home, I suggest you read this article and take it to heart, and don't let it happen to you.
Pangs of Seller’s Remorse in Miami Market

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