The Catalina Foothills

here we go again

 No wonder banks are in trouble, again

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they're still hanging tough at Villa Milano

I don't know if anyone's paying attention at Villa Milano at Rancho Sin Vacas, but the only two homes that have sold in there in the last six months, sold for $227 and $221/sf. And that was well before our latest financial woes took root.

Yet inexplicably, the 20 homes that are still for sale in Villa Milano are listed for an average of $322.79/sf. The high is $384/sf, and 15 of the 20 are above $300/sf.

And most of these homes have been on the market for more than 500 days, some for 600, 700 and more days. Hello! Anybody home
See them here> Villa Milano (link will expire on 12/28/08)

And Villa Milano's very nice. It's in a great Foothills location, in gated Sin Vacas, far from the maddening crowd. And the homes are nicely designed and built. But for some reason (price maybe?) it ain't working.

Worse yet, a year ago I wrote about Villa Milano,
villa milano at rancho sin vacas,
with basically the same story to tell. So this is now getting boring, even for me, so let's hope something changes by next year.

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

keep it simple

Under a million, there are 444 homes for sale in the Foothills today
-36 have sold in the last 30 days = 12.3 Months of Inventory

Over a million, there are 147 homes for sale in the Foothills
-0 (none) have sold in the last 30 days = months of inventory can't be calculated.

In simple terms, that's the market in the Foothills today.

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

after the investment craze

On Valentines Day in 2007 I was at the florist and bumped into a real estate agent I knew. And because he'd moved to a different brokerage we hadn't seen each other in a while, so we spent a few minutes catching up while we compared bouquets.

I remember how proud he was telling me about the investment properties he and his wife had just bought, and how they were going to make a quick buck flipping them. I thought they might have been a little late to the party, but I also thought this guy was pretty savvy, so I wondered if I was the one missing out. And according to him, they'd gotten in on the ground floor of a great new development called Miramonte by the River. In the Foothills he said. I'd never heard of it, and turns out it's on the very southwestern edge of the Foothills behind the Tucson Mall. Technically in the Foothills maybe, but just.

Anyway, having now heard about Miramonte by the River, and wanting to keep an eye on what I'd missed out on, I took notice of it when it popped up from time to time in the MLS. But after a while, when they weren't selling, it started popping up all the time with lots of little price cuts on the different units in there.
And that got tedious, so I stopped noticing. 

And then yesterday, almost two years after our Valentine's Day meeting, the two units they'd bought finally showed up in the MLS as under contract. Yeah!

In January of 07 they paid $456,468 for one, and $605,858 for the other. And of course, they put them up for sale for more than they'd paid, but they didn't sell. And they cut and cut, and still no sale. And eventually they were foreclosed and the lender took them back.

And having no illusions about the current market and wanting to cut their losses and get it over with, the lender listed the unit my agent pal paid $456,468 for, for $270,000, and the one he paid $605,858 for is listed at $375,000. I don't know what they'll close for, but at $129/sf list price, these are the least expensive units to sell in Miramonte by the River. So maybe now, finally, they're a good investment.

And the lender, they're on the hook for the $433,600 in mortgage money for one, and $575,000 for the other.

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

what's moving and what's not in the Tucson Foothills market

There's a big difference in the list price of the homes that have recently gone under contract (Active Contingent & Active Capa)
& Sold, vs those that have been Withdrawn, Expired, or are still
For Sale.
Presumably, the under contract and Sold homes are those that buyers have found to be desirable and priced right in this market.
While the Withdrawn, Expired and still Active listings are those that have yet to find a willing and able buyer, for one reason or another. The following data represents activity for just the last 14 days,
so it's a small sample for sure, but it's all about what's moving right now, and what's not.
                           what's moving

Status/# of homes       Average list       Median list

Active Contingent 14    $524,886 -        $370,000

Active Capa 3              $439,933 -        $400,000

Sold 17                       $529,276 -        $495,000
                                                                    
The total average          $498,031          $421,666

                                  what's not
Withdrawn Release 17   $886,971  -       $629,000

Expired 12                   $926,333  -       $722,000

Active 592                  $898,717  -       $650,000
                                                                     
The total average          $904,007 -       $667,000 

So based on average list prices, what's moving is priced about 45% less than what's not.  37% if you're looking at median prices.

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

Tucson Foothills, Wednesday 11/26, 5PM

5 minutes later,

After Noah's Deluge, the Bible relates that the rainbow gained meaning as the sign of God's promise that terrestrial life would never again be destroyed by flood (Genesis 9.13-15^[24]):

Have a Wonderful Thanksgiving!

John Schneider

Luxury homes in a slump

I found this Barron's article on the woes of the Luxury home market at the Greenwich, CT blog For What It's Worth. And though it focuses on homes in the $5.0mil & up range, which are as common as green grass in places like Greenwich, Beverly Hills and the like, the parallels with our own more modest luxury market are nonetheless unmistakable.

Sand Castles – Half-Price Mansions

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

speaking of 05 prices

This one looks like it could be a good deal.
 

It's in La Paloma, 3127 sf, 5 bedrooms/3 baths, 2 story, now listed for $538,200, as a bank owned (REO) property.
I saw this place a few months ago when it was listed for $750,000.
At that time it was a short sale that obviously didn't happen, and at $750,000 I'm not surprised. It needs work, or a least it did then, and I'm guessing it still does. And my memory is foggy on just how much work, so I can't say.

On the other hand, it's on the golf course in La Paloma, and at $172/sf list price, it's starting to look awfully pretty.

See it here> 6230 N Calle Del Halcon Tucson, AZ 85718

And here's the murky sales history.

It sold for $789,000 in 2005, yes, $789,000.

And as yet another example of why we are where we are, Meritage Mortgage forked over $775,000 in mortgage loans to the buyer of this home-sweet-home.
And then it looks like this past August Meritage was the high bidder at a foreclosure sale and paid themselves $619,380 for the privilege of taking it back. So they wrote off about $155,000 on the $775,000   loan, closed it out, and are now looking to get rid of it for somewhere around $538,200.

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

if you've been waiting for 2005 home prices to return

Your wait is over,

It's no surprise that the economic fallout of the past couple of months has taken yet another bite out of home sales, and everything else, and re-set the bar on prices.

Based on recent home sales - late September through late November- homes in the Tucson Foothills are selling below their 2005 level.

Homes Sold  
9/24/05 - 11/24/05 vs. 9/24/08 - 11/24/08

05- Average SOLD price = $612,663
08- Average SOLD price = $607,707

05- Median SOLD price = $541,250
08- Median SOLD price = $525,000

05- Average $/sf = $225.00
08- Average $/sf = $197.91

05- # of homes sold = 126
08- # of homes sold = 81

Whether you're buying or selling a home in the Tucson Foothills, you need to be looking at sold prices since mid September.
Further back than that, and you're looking at the way it was, not the way it is.

On the other hand, and I'm going to back peddle a bit, I hate to hang my hat on what is a relatively small sample of sold homes, 126 vs 81. But for now, that's all we've got to work with, so that's what it is.

And looking for a ray of light, I wonder if some of these recent sales weren't panic sales resulting from the catastrophic collapse of the markets, and barring further catastrophes and assuming things begin to heal, maybe we'll start to see some upward momentum.
It's possible.

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

2 worth mentioning

First is a new spec home. This is a brand new listing for a brand new spec home under construction in the Tucson Foothills, ETA is 3/31/09.  4000 sf, 4 bedrooms/4.5 baths, with pool and pool house with changing room and shower, yours for $1,395,000.
I hope they know something we don't.

The other is a Foothills home that sold in 2005 for $869,000, and then came back on the market in October of 07 for $995,000, and sat there for 6 months. And good for them, they finally bit the bullet and re-listed it for $899,000. And that did the trick, it went under contract today. But if they'd have bitten the bullet 8 or 9 months ago, they wouldn't have had to bite so hard. But better late than never.

See them here> something old, something new
link will expire on 12/22/08

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

what are your odds

Suppose you'd decided to sell your lovely Foothills home and called your favorite Realtor® to come by and list it for you.

And after showing them around, and reviewing the comps and talking about the market and this and that, you decided to list the house for $1,250,000. Wanting your home to be competitively priced, you priced it based on recent sales and the price of other similar homes that are for sale, and then left yourself a little wiggle room. Everyone does.

And now, just as you're beginning to feel some relief that you've done the right thing and the big decisions are behind you, your friendly Realtor® tells you that your odds of selling your house are 1 in 36.
WHAT! you say, 1 in 36, what the hell are you talking about 1 in 36.

Well in your price range Mr. Jones, $1.0 - $1.5million,
there are 72 homes for sale. And in the past 3 months 6 have sold.
Doing the math, for sale 72 ÷ 6 sold = 12 x 3 months = 36
or, more simply, each month an average of 2 homes out of 72 are selling. That puts your odds at 1 in 36.

In real estate we call that 36 months of inventory, (MOI, months of inventory is the measure of how long it would take to sell all the current inventory, assuming no new listings were added) and that works, but like most industry lingo, it's kind of impersonal and anonymous, and it doesn't really hit home. ha-ha.

But posing it as, you've got a 1 in 36 shot of being the lucky seller, that puts a more personal spin on it.

If sales increase then Mr. Jones's odds will get better, if sales slow down, they'll get worse. And whether you call it months of inventory (MOI) or odds of selling (OOS), there's no getting around it, that's the market.

Looking at existing inventory of Foothills homes for sale vs. the number of homes sold during the last three months, here's the months of inventory, and the odds of selling a home in different price ranges.

$0 -$500,000- 182 for sale/56 sold = 9.75 months of inventory, or,
the odds of selling, 1 in 9.75

$500,000 - $999,999- 266 for sale/43 sold = 18 months inventory, or,
the odds of selling, 1 in 18

$1.0 - $1.5m- 72 for sale/6 sold = 36 months inventory, or,
the odds of selling, 1 in 36

$1.5 - $2.0m- 39 for sale/3 sold = 39 months inventory, or,
the odds of selling, 1 in 39

$2.0 & UP- 33 for sale/1 sold = 99 months inventory, or,
the odds of selling, 1 in 99

I like odds of selling, because it really hits home and makes the point.
But take your pick, MOI or OOS, either way, people need to understand the market we're in. 

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

short sales and foreclosures, how close to list price are they selling

Though it's usually not true, there's a belief that short sale and foreclosure properties (REO's) sell for a big discount off the list price.

Let's have a look.
In the last three months just 4 REO's in the Tucson Foothills have sold through the MLS. Here's what they were listed/sold for;

-4255 N Camino Arco Tucson,85718- $234,900/$237,000
-5000 E Calle De Las Chacras Tucson,85718- $389,000/$375,900
-2050 E Cerrada Nopal Tucson,85718- $445,000/$455,000
-5601 E Rio Verde Vista Dr Tucson,85750- $650,000/$575,000

And there were 5 short sales. Here's the listed/sold prices;

-5535 N Calle La Cima Tucson,85718- $260,000/$245,000
-640 E Deone Ln Tucson,85704- $329,000/$330,000
-6641 N Mesa View Dr Tucson,85718- $499,000/$500,000
-4540 N Flecha Dr Tucson,85718- $550,000/$550,000
-5535 N Calle La Cima Tucson,85718- $785,000/$783,500

The REO's sold for an average of 95.6% of list price, while the short sales sold for a whopping 99.4% of list price.

And normal, or non-distressed sales during the same period sold for 93.5% of list price.

Why is that, why are short sales and foreclosures, contrary to popular belief, selling closer to list price than normal non-distressed sales.

Because in both cases, short sales and foreclosures, there is a very motivated seller. In a short sale the owner is trying get the property sold, and the lender to agree to take less than is owed them, before the property enters foreclosure. Meanwhile the lender is also motivated to take less than is owed them, because the cost of executing a foreclosure, and the costs of then owning, maintaining and selling the property are very high, and the outcome unknown.
So a bird in the hand ...

In a REO the lender already owns the property, and has had multiple BPO's done by different agents. BPO = broker price opinion, an opinion of value for the property given by various agents. So the lender has a very good idea of what the property is really worth as a foreclosure sale, and they have no emotional attachment to it, and everyday they own it, it costs them more money. So they want to get rid of it as fast as possible, and to do that they price it to sell. And unlike your average home seller, who's usually looking to maximize their profit, the lenders at this point are just looking to cut their losses. And the less time they spend with a property, the less it costs them.

And because buyers are attracted to attractively priced short sales and foreclosures, they get more attention, more bids, and end up selling at higher sale price to list price ratios.

But; It's not a perfect system, so not every short sale and REO property is a screamin' deal or priced where it should be. You've got to evaluate each and every one that interests you.

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

telling it like it is

Chris Fountain, a much admired fellow real estate blogger got his comeuppance today as the local expert in a New York Times article on the Greenwich, CT real estate market.

Chris Fountain, a local real estate agent whose blog, christopherfountain.wordpress.com, keeps a jaundiced eye on the market, figures there are at least 88 spec houses on the market in the Greenwich area, 53 of them listed for more than $5 million.

And I thought we had problems.
Read it here> The Bigger Houses Are, The Harder Prices Fall

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

a big dose of reality

It started in June of 2005 when this house on Calle Ladero in the old Foothills area sold for $2,200,000.
It's quite the estate, with 8100 sf on 5.5 acres and it's own gated entry. Very posh, very private. It feels more like a celebrity home in Beverly Hills than your typical Foothills mega-buck McMansion.

Then this past August the house came back on the market, but now for $2,590,000, with just one acre. The other 4 acres had been split off, and though they weren't actually listed for sale, they were available, first-come-first-served, for an additional $1,400,000 to whoever bought the house. So get in line, because for a mere $3,990,000, you'll have the privilege of owning this property that sold for $2,200,000 three years ago. And because of where the additional acreage is in relation to the house, in my opinion, the only way to buy this place is with the additional acreage.

And I had a client who was interested, and liked the house and the property, but not at $3,990,000. So that was that.

And so after it sat for a while with no takers, the house with one acre was recently reduced to $1,750,000. But again, I think it only makes sense with all 5.5 acres. And now it's beginning to make even more sense. Because today it showed up in the MLS listed for $2,250,000 with all the acreage. So it's within $50k asking price of the 05 sale price, along with a whopping $1,740,000 dose of reality.

I don't think it's too little, I just wonder if it's too late.

See it here> Calle Ladero

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

how not to inspire confidence in your listing

Start out by listing it way high, let's say, $1,750,000,
then drop the price to $1,455,000, and keep dropping it to $1,355,000, $1,295,000, $1,249,000, $1,195,000, $1,145,000, $1,095,000, $999,000, $950,000, $925,000, $900,000, $950,000, $900,000 and then to $850,000, for now. I bet they get it right eventually.

OK, the pricing strategy didn't work, so how 'bout this,
OWNER FINANCING/LEASE PURCHASE AVAILABLE. EASY TERMS, ANY CREDIT! INSTANT EQUITY! CALL WITH CREATIVE OPTIONS OR OFFERS!OWNER-AGENT.

Yep! It's an Owner-Agent. (see, we're not all perfect)
Nope, I can't give out the address, MLS #, etc, but this is for real and I've probably said enough.

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

the bargain bin

Last week I was in class learning the in's and out's of handling transactions for short sale, and lender owned properties, a.k.a. REO properties. I took the classes because home buyers today are interested in short sale and REO properties, and in order to represent them properly it's essential to understand the procedures involved to successfully transact these deals. In other words, the lenders have their own way of doing things, and if you don't do it their way, the deal won't get done.

And now, anxious as I am to put all that book learning to good use, I thought I'd start by identifying the short sale and REO properties listed for sale in the Tucson Foothills.

And there aren't that many really, just 20 short sale properties, and
5 REO's at the moment. Hardly enough to make a living, but have a look and let me know if you see something that interests you.

SHORT SALE PROPERTIES

REO PROPERTIES

The key differences between short sale and REO properties are;
Short sale properties are-
-owned by an individual, the person who bought the house
REO's are-
-owned by the lender

Short sales are-
-in default or pre-foreclosure because the owner has fallen behind on the payments and the property is worth less than the loan amount
REO's are-
-already foreclosed, the previous owner is out of the picture.

Short sales-
-an offer to purchase must first be negotiated and agreed to with the owner/seller, and then the loan payoff must be negotiated with the lender
REO's-
-there is no loan payoff. The lender owns the property.

Net-net- short sales are more complicated, more time consuming and the outcome is less certain.

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

the good news is

The Foothills is doing better than many other areas of Tucson in the current housing mess.
According to this Zillow map which charts the changes in home values year-over-year for different areas of the Tucson metro, values in the Tucson Foothills have declined somewhere between 0 - 9%, Q3 last year vs this year. Other areas of Tucson have declined
9 -12%, and the dark blue indicates areas with a decline of 12% or more.

One of the key reasons that values in the Foothills have held better than other areas of Tucson is that we've had much-much less new home construction in the Foothills, and consequently, much less speculative investment and the fallout that has occurred from that in other areas.  This is true despite the impression you might get from my frequent mentions of the million$+ spec home market in the Foothills, which is in fact very small - 30 or so homes, or about 5% of the market. 

As the market was starting to go down-hill in 2006 and 2007, you didn't need to be a swami to figure out that areas of Tucson that had lots of new construction would suffer the most as time went on.
And though I couldn't actually prove it at the time, I always explained this to buyers I was working with, sometimes to no avail.

In order to get a tighter look at values, vs. Zillow's 0 - 9% range for the Foothills, I pulled the data from the MLS for home values
Q3 07 vs 08, for single family homes only.
Here's what I found;
Q3 2007- Average Sold Price = $649,406
Q3 2008- Average Sold Price = $606,376 =  -6.6%

Q3 2007- Median Sold Price = $535,000
Q3 2008- Median Sold Price = $495,500 =  -7.4%

Here's another Zillow map. This one charts the % of homeowners who bought between 2003 & 2008 and who currently have negative equity in their homes.

And in the real world this map picks up where the first one left off. Because greater rates of declining values as seen in the first map, lead to more homeowners with negative equity. 

Again the Foothills are in a stronger position than other areas of Tucson, with less than 14% of Foothills homeowners with negative equity, according to Zillow. The question is, how much less than 14%. I can't say, and apparently neither can Zillow.

Because we don't have the declining values and negative equity issues to nearly the same extent as other areas, and don't have the large number of unsold new construction homes either, it's very likely that the Foothills will bounce back sooner and more quickly than outlying areas. Here's hoping.

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

spread the word, get real

I've taken some heat lately for beating the drum that sellers need to get real. Yes I've tried to point out, using data and stats and whatnot, and harped even, that many homes are still priced way beyond what buyers are willing to pay.

And because of that, home sales are stalled, and will continue to be stalled until prices get to where buyers think they should be.
And until they are, another ad, or another open house, is not likely to make it all better. And by the way, I beat that drum, not to criticize, but to inform home sellers, as well as buyers.   

So looking to shed some of the heat and get some support for these distasteful views of mine, I turn to the uniquely entertaining and informative Christopher Fountain, of the Greenwich, CT real estate blog, For What It's Worth 

Turns out that in Greenwich, that bastion of sacrosanct wealth and power, they're feeling the pinch too, and having the same tug-of-war over home prices that we are. And taking plenty of heat too I'm sure, Chris cuts to the heart of what's going on with prices, sales and the other smoldering issues to do with Greenwich real estate.

See A jaundiced view of sellers’ attitudes

And then spend some time perusing For What It's Worth for his special take on the Greenwich market and more.

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

oh give me a home

A new listing popped into the MLS today for a home on 6.2 acres in Cobo Catalina Hills, which is tucked up to the base of the Catalina Mountains and adjacent to the west side of Pima Canyon.

Cobo's unique in the Tucson Foothills because it's zoned SR, so all the homes are on 3.3 or more acres, and most of them are on 5, 6 & 7 acres. You get all the peace, privacy and room to roam of being out in the boonies, but you're right here in the Foothills, just 2 minutes to your favorite boutique at La Encantada.

This one's listed for $3,295,000. It's 5582 sf, built in 99, and the listing says it's been totally redone, and it looks it.
On 6.2 acres - not dividable.

See it here> where the buffalo roam

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

is this just a coincidence

These days price is numero uno on every home buyers checklist.
Here a simple example of it. If we look at the homes that have gone under contract since 9/15 vs those still for sale, there's an obvious price difference that keeps rearing it's little head.

For Homes Priced

$0 - $500k
- 15 under contract, at an average of $169/sf -based on list price
- 178 still for sale, at an average of $185/sf -based on list price

$500 - $1.0
- 10 under contract, at an average of $197/sf -based on list price
- 260 still for sale, at an average of $237/sf -based on list price

$1.0 & UP
- 5 under contract, at an average of $324/sf -based on list price
- 140 still for sale, at an average of $366/sf -based on list price

So if you're trying to sell your home, forget about being comparably priced, that's not good enough anymore. You need to beat the competition, and beat them good to win in this game.

Other tidbits you might gather from this is the $/sf differences between price ranges. Higher priced homes tend to have more expensive stuff in them, and be located on more expensive lots in more expensive communities, so the $/sf cost is usually higher.
And though not a dependable measure of anything, but just as a casual observation, based on the amount of inventory vs the # of homes under contract in each price range, it seems the higher you go, the longer and darker the tunnel gets.

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

see this one in La Paloma

There's a wonderful John Kline built house in La Paloma that just had a nice price reduction, dropping from $1.595 to $1.395.
It's a beauty, and John Kline is one of my favorite Tucson builders.

His homes are done in a Spanish or Santa Barbara style, but not too done, and they're masonry construction with attention to detail and high quality workmanship. And they're always comfortable, elegant, and very livable. 

Here's the kicker, this home sold for $1,600,000 in September 2003. $1,600,000 five years ago - $1,395,000 today. If this sounds like you, let's go have a look.
And using some well-worn Realtor lingo, I'm going to stick my neck out - THIS ONE WON'T LAST. I betchya.

See it here> 5969  N CAMINO PRECIADO

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

Sold & Expired in the Tucson Foothills

Is there a noticeable difference between the list price of homes that have Sold, and the list price of homes that have sat around on the market and Expired without selling.

Sold listings set the price for what buyers are willing to pay for homes in the current market, while Expired listings are a good indicator that those homes are priced beyond what buyers are willing to pay.
Seems simple. Let's see if the numbers support the theory.

Since 9/15/08, 75 homes have Sold in the Foothills,
and 62 listings have Expired.

The average list price of the 75 homes that Sold was
$656,876 - For the 62 Expired listings it was $795,282.
- that's 21% higher than the list price of those that Sold.

The median list price of the 75 homes that Sold was
$530,000 - For the 62 Expired listings it was $639,500.
- that's 20% higher than the list price of those that Sold.

So yes, there is a very noticeable difference.

Taking it a step further;
The average Sold price of the homes that sold was $614,035,
which puts the Expired listings, listed at a gaping 29% higher than those that Sold. And the median Sold price was $505,000, vs. $639,500 list price for the Expired's, or almost 27% higher.

These figures are for homes priced from $199,900 up to $2,685,000, and the good news is that homes are selling in the Foothills in all price ranges. But in many cases there's a big gap between buyer and seller expectations. And like it or not, in this environment buyers are calling the shots, while home sellers who are not willing to capitulate are sitting it out on the sidelines.

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

underwater on your home

Today's Arizona Daily Star has an article in the Business section on Tucson home owners who are underwater on their homes, and in some cases in danger of having to sell for less than they owe (short sale) or risk foreclosure.
When you owe more than home is worth

This map from the article shows the percentage of home owners with negative equity and where they're located throughout the Tucson metro. The key at the top of the map codes the %'s from light to dark with darker areas indicating a higher percentage of home owners with negative equity, with red being the highest at 33% or more.

Coincidentally, last week I was in class learning the in's and out's of short sales and foreclosures. And one of the basics for home owners in danger of, or who have already fallen behind on their payments, is to get in touch with your lender immediately, and try to work out a loan modification that allows you make modified payments and stay in your home.

As you can see, the Foothills area and the northeast have the lowest percentage, under 14%, of home owners with negative equity.
And because condos were the darling of much speculative investment in the Foothills, they account for a disproportionately high percentage of the short sale and foreclosure properties on the market.

I'll have more on the short sale/foreclosure segment in the coming weeks.

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

the market

A friend of mine who's also a Realtor® told me a little story about a house that's listed for sale here in the Tucson Foothills.

It's listed for $1.5+ (no, I don't want to identify the house).
And recently a buyer and their agent came to look at the house, stayed a long time, and then they came back for 6 more showings.

And finally after 7 showings, the buyer and their agent submitted an offer. The offer was $470,000 under the list price. My friend's comment was, "They were pissed. (the owners) Chutzpah to go back 6 times and then come in so low"

Chutzpah, Pissed, huh! They're lucky they got an offer.

I told my Realtor® friend,
"...maybe the owners expectations are unrealistic and the house is priced tooo high. In time they'll find out"

I mention it because I know this is not an isolated case.
It's what's happening out there. And instead of getting pissed, get real. Maybe (the) owners/sellers should take a hard look at where we are in the economic/financial/stock & real estate markets today vs. their expectations and adjust to reality if necessary, and then do their best to negotiate a mutually agreeable price.

That's the market, period. No if's and's or but's

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

don't prolong the agony

These people didn't.
They bought this house in Sunrise Mountain View Estates in January 2007 for $532,500. Today they listed it for sale for $489,000.

They get it, the market's down, not up.
I wish them luck and hope they have a quick and successful sale.

See it here> 4919  N Via Velazquez Tucson, AZ  85750
the link will expire on 12/13

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

the past 14 days, in the Tucson Foothills

Here's a snapshot of sales activity since November 1st for single family homes in the Tucson Foothills.

As of today  there are 579 homes for sale, priced from $169,000 to $6,450,000.

Since November 1st we've had;

46 New Listings
Priced from $169,000 to $2,890,000
About 34 are actually new listings, the remainder are re-listed old listings.

20 homes have gone under contract
Priced from $190,000 to $1,712,000

no price increases

69 price reductions
from $259,000 to $2,650,000

and

19 homes have sold
Priced from $220,000 to $880,000
average sold $/sf = $177.83
(same period in 07 - average sold $/sf = $215.83)
(same period in 06 - average sold $/sf = $219.72)

Some of the decline in $/sf costs is due to the overall decline in values. But we also had no real high-end ($1.0+) sales, and then there's the downward drag of a few distress sales (short or lender owned) that is also a factor.

Sales are up for this period vs the last one (19 vs 13), but with no real high-end sales, but of the 20 homes that have gone to contract,
4 are at $1.0+. At current sales levels we're at about 15 months of inventory in the Foothills, a sudden and surprising 5 month improvement from last month.

We're about to enter the holiday season, when home sales will likely slow down, followed by the beginning of the snowbird season, when sales will hopefully pick up again. Anticipating the increased activity during the upcoming snowbird season we can also expect to see more homes listed for sale during the next couple of months. And though it doesn't make sense to me, the snowbird season may even cause some sellers to have a renewed sense of confidence and raise the price of their homes. Oh 'no way' you say, and I hope you're right, but I'll point them out if and when I see them.

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

looking back

The good news is that this nice house in Catalina Foothills Estates 10 finally sold today for $700,000, after about 16 months on the market.
See it here> 4421 Camino Sumo (the link will expire on 12/12/08) 

 

The bad news is that someone paid $1,000,000 for it in March of 06.

I know the house well, I've previewed it and shown it. First when it was listed for $1,050,000 in 2006, and again this summer when it was listed for $795,000.

And getting it for $700,000, these buyers did very well, well enough I think, to more than make up for how poorly the guy did who paid a million for it. So maybe it all evens out in the end.

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

priced to sell, and it did

A home at 7570  N Calle Sin Controversia in Sin Vacas listed for $1,400,000, went under contract today after just 32 days on the market. Why, because it was priced to sell.

I wrote about this house last month when it came on the market,
reality hits home in the Tucson Foothills
' ... deciding to take the bull by the horns, the owners of 7570 N Calle Sin Controversia listed it today for $1,400,000. Which must hurt, because they paid $1,475,000 for it in May of 05. And that was about a year before the market peaked here in the Tucson Foothills.
This looks to me like it's worth a look -5521 sq. ft., 4 bedrooms/3.5 baths, in Sin Vacas. See it here> Sin Controversia

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

short sales and foreclosures in the Foothills

I never thought short sales and foreclosures would amount to much here in the Foothills, and they're still a small fraction of the overall market, but it does appear that they may be with us for a while. 

And because home buyers are increasingly interested in looking at the opportunities they offer, I'm in class this week to learn the in's and out's, and get accredited in handling bank owned and short sale properties. Which means that next week I can start helping you sail through the choppy waters of those transactions.

And while I'm in class studying hard, and hopefully learning something, this blog will likely be idle for a few days.

Back soon.

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

Lee Marvin & Josias Joesler in the Tucson Foothills

For those of us who are fans of Josias Joesler and Lee Marvin, and I am, today we got a double treat, since our own hometown paper, the Arizona Daily Star, did a piece on the Joesler built Lee Marvin residence.
Late actor's Tucson home is no quick sale

It's a nice little tribute, but the setup is a bit of a stretch, I think.
"And while no one expected the $6 million home to sell quickly with the housing market slumping, the listing has, in some ways, pitted Marvin's name against the struggling economy"
...pitted Marvin's name against the struggling economy,
oh, yeah sure. 

Anyway, for more on Josias Joesler, and the homes he designed and built in the Tucson Foothills, including the Marvin residence click> 
Josias Joesler

And for a peek at a great Joesler where the great actor Lee Marvin lived> Marvin Residence

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

reduced over $3 million

It's back on the market at $2,400,000, and in my opinion that's an irresistible price. But we'll see.
3700  E Rose Peak Pl
7026 sf, built 2005, nothing like it in the Tucson Foothills.
I love this one, I call it the WOW House. Spectacular!

Have a peek,

The listing says,
"One of Tucson's finest example of minimalist contemporary, passive solar with own cisterns, heated floors, electric windows, saltwater pool and much more. Seller wants an offer NOW. House reduced over $3 million. Fabulous opportunity to acquire this amazing home with 360 degree vistas"

See the listing with pictures & all the details > 3700 E Rose Peak Pl

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

when you least expect it

Over the weekend two high-end spec homes went to contract in the Tucson Foothills. The first at  7296 N Calle Sin Envidia in Pima Canyon is a spec that went short sale just a week or two ago.
I wrote about it here> dropping like a stone 
They very quickly dropped the price from $2,500,000 to $1,712,000, and I guess that did it. But I'm still surprised that it went that quick, because it was not completed and the buyer will have to bring in their own builder to complete it.

The other is a new David Tyson at 5543 N Camino Real, one of three new spec homes he built along Camino Real on land split off from a Joesler estate. I think this is the nicest of the three, not too big, not too small, just right, great views too. All three came on the market in August 07, and this is the first one to go. It was first listed for $1,495,000, and reduced-reduced to $1,275,000.

See them here> Sin Envidia & Camino Real

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

what's happening in Catalina Foothills Estates 10

Over the last week or so I've been catching up and having another look at the homes for sale in some popular gated communities in the Tucson Foothills. And for the last couple of days I've been in Cat 10.

Catalina Foothills Estates 10, a.k.a. Cat 10, is an established,
low-key gated community off Hacienda del Sol Rd. With hilly winding streets, mature desert vegetation, and homes tucked way back and away from view, it's the quietly elegant gated community of the Tucson Foothills.

The market in Cat 10
Because they're so hidden from view, you'd never guess it from driving around in there, but the tax records indicate that there are 215 single family homes in Cat 10.

And right now there are 13 homes for sale, priced from $735,000 to $2,895,000. And though a few of them are newer homes, most of those for sale were built from the mid 80's to 1990, and are burnt adobe construction done in a Spanish, Southwest or Territorial style.
Solid, elegant, Tucson classics. And except for the builder
La Quinta, they just don't build them like that anymore. And when they do, they're almost never on a great lot in Cat 10, because all the great lots are gone. See them here > For Sale in Cat 10

Since January 1st, four homes have sold in Cat 10.
Two of them sold back in January and February for what I'll call 'normal Cat 10 prices'; one for $1,500,000 or $327/sf, the other for $2,900,000 or $465/sf.

Then nothing, until late September, when the former sales office in Cat 10 (a 1004 sf mini-house adjacent to the entry gate) sold for $202,000, and a home on Circulo Sobrio, a RELO (originally listed for 1,135,000) sold for a deep discount at $775,000.

As in much of the Tucson Foothills, sales in Cat 10 are slower, particularly at the high-end, and Cat 10 is virtually all high-end. 

In contrast, in 2007, ten homes priced from $1,089,000 to $2,595,000 sold in Cat 10. And the one that sold for $2,595,000, or $561/sf, went for full list price after just 5 days on the market.
And that wasn't the odd-ball exception, homes in Cat 10 were practically flying off the shelf last year. An exaggeration maybe, but compared to this year, maybe not. And in 2006-11 sold, priced from $790,000 to $1,990,000. Those were the days.

So if you see this as an opportunity, you can take your pick from a very nice litter of homes for sale in Cat 10.

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

is anything selling in the Foothills these days

Surprising maybe, but yes, homes in the Tucson Foothills are still selling.

In the last two weeks 24 homes in the Foothills have gone under contract. If that continued, and we had 50 homes/month going to contract, and if all fifty that went to contract each month followed through and closed escrow each month, pretty soon we'd be out of the woods. That's a lot of ifs, but lets see what happens.

Meanwhile, here's the 24 that have gone to contract recently.

Under Contract Now, 11/08
**this link will expire on 12/7**

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

% of sale price to list price in the Tucson Foothills

I guess for me this is a week for numbers and data,(anything to avoid the DJIA) So here goes.

39 single family homes sold in October in the Tucson Foothills for an average of 92.5 % of the list price, as reported in the Tucson MLS.
We call that % of sale price/list price. (%SP/LP). And that figure is calculated based on the latest list price, not the original list price.

So if a home is listed for $125,000, and three months later the price is reduced to $115,000, and then reduced again to $100,000. And then sells for $90,000, the %SP/LP is reported as 90%.
List Price = $100,000/Sale Price = $90,000, so %SP/LP = 90%.

But based on the original list price, the %SP/LP = 72%
List Price = $125,000/Sale Price = $90,000, so %SP/LP = 72%

Are one of those figures more accurate and meaningful than the other. I don't think so. But I do think you need to have both of those figures to understand what's happening in the market. Using the example above, reporting that the house sold for 90% of list price is technically true. It did. But it's also true that there's more to it than that, and sometimes a lot more.

With that in mind here's an eye-opening look at the % of SP/LP for the homes that sold in October, based on the most recent list price as reported in the MLS & on the original list price.

Original List Price	List Price at Sale	Sold Price	%SP/LP- as reported	%SP/LP-on original list
234,900	234,900	237,000	100.89%	100.89%
369,000	289,900	285,000	98%	77%
295,000	295,000	285,000	96%	96%
374,900	316,900	300,000	94%	80%
745,000	570,000	325,000	57%	43%
420,000	385,000	365,000	94%	86%
450,000	399,000	375,000	93%	83%
508,900	389,900	375,000	96%	73%
389,000	389,000	375,900	96%	96%
380,000	380,000	385,000	101%	101%
560,000	449,000	410,000	91%	73%
439,500	439,500	430,000	97%	97%
445,000	445,000	455,000	102%	102%
575,000	499,000	467,500	93%	81%
549,000	499,000	485,000	97%	88%
530,000	530,000	498,000	93%	93%
619,000	525,000	505,000	96%	81%
550,000	550,000	525,000	95%	95%
665,000	585,000	530,000	90%	79%
585,000	585,000	570,000	97%	97%
650,000	650,000	575,000	88%	88%
650,000	650,000	575,000	88%	88%
800,000	600,000	590,000	98%	74%
688,000	649,900	623,500	95%	90%
829,000	695,000	631,500	90%	76%
835,000	775,000	740,000	95%	88%
749,000	749,000	742,500	99%	99%
768,500	768,500	775,000	100.85%	100.85%
1,500,000	785,000	783,500	99%	52%
1,250,000	995,000	800,000	80%	64%
969,000	875,000	848,750	97%	88%
1,150,000	990,000	880,000	89%	76%
995,000	995,000	900,000	90%	90%
1,074,900	1,074,900	1,000,000	93%	93%
1,199,900	1,199,900	1,100,000	91%	91%
1,549,000	1,549,000	1,410,000	91%	91%
1,950,000	1,795,000	1,600,000	89%	82%
1,795,000	1,795,000	1,675,000	93%	93%
2,595,000	2,495,000	2,250,000	90%	87%

A few observations from looking at those figures;

-the reported average of 92.5% SP/LP for October is just that,
an average.
-we're in a buyers market, duh!
-in many cases homes are being listed for too high a price,
sometimes ridiculously too high, and in the end suffering the consequences of overpricing.
-with few exceptions, even homes that are presumably 'priced right', and selling without price reductions, are selling for 7 to 10%  below list price, because these days that's what buyers expect, and in the end, buyers call the shots. VS. let's say October 2005, when homes sold for an average of 97.55%SP/LP, with virtually no price reductions, and with many selling for over list price.
-and contrary to what you might expect, the higher end is more consistently selling  closer to the original list price than other price categories.

And it's unfortunate, but in order to get the %SP/LP based on the original list price, it must be calculated one-by-one for each sold property. A tedious process at best. 

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

slicing it really thin

In response to the sales data that I posted yesterday for Tucson Foothills homes, a reader asked if I could slice and dice those numbers even thinner, while expanding the time-frame back to 2005 thru 2008.

OK. But I warn you, you've got to be a real numbers nerd for this one.

Here goes - a breakdown of sales data covering 2005 through 2008 for the period of January through October each year.

And for each year and each price range are-
the # of homes sold(S-11), plus the average Sold price,
and the plus or minus % difference between 2005 vs 2008.

Price Range	2005 # Sold Avg Price	2006 # Sold Avg Price	2007 # Sold Avg Price	2008 # Sold Avg Price	+/- %
0-250k	S-31 217,473	S-13 228,462	S-7 222,843	S-18 220,183	-41 +1
250-500k	S-375 388,000	S-228 396,566	S-208 396,543	S-195 383,150	-48 -1
500-750k	S-252 609,004	S-186 612,430	S-177 604,398	S-133 604,354	-47 -.8
750-1.0	S-117 862,919	S-91 853,612	S-71 861,215	S-65 865,963	-45 +.3
1.0-1.5	S-54 1,228,111	S-76 1,193,278	S-51 1,223,908	S-32 1,235,383	-40 +.6
1.5-2.0	S-12 1,705,417	S-16 1,780,750	S-18 1,685,778	S-12 1,687,917	0 -1
2.0 & UP	S-11 2,550,000	S-17 2,471,519	S-11 2,595,455	S-8 2,550,000	-27 0
Total	S-852 612,095	S-627 711,603	S-543 687,806	S-463 637,877	-46 + 4

Because the price bands are so narrow, the year to year price shifts seem insignificant, to me anyway. But what does shine through is that across all price bands, prices today are pretty much flat vs 2005.

And wouldn't you expect prices to have fallen more than they have, given the sharp drop in the number of homes sold each year since 2005. I would. But for some reason, maybe because it's such a great place to be, prices in the Foothills have been very resilient. Maybe they'll even start heading up soon, it's possible.

There's reason for optimism. We have a new administration that we all hope will be better than the old. Keep your fingers crossed.

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

Foothills home sales thru October

Considering the beating that we all took in the financial markets in September and October, you would expect that home sales and prices would have fallen off the cliff. But according to the numbers, so far they're holding their own, and have even improved ever so slightly since last month.  (Year to date home sales in the Tucson Foothills)

Have a look.
First is the data for the number of single family homes Sold-
by price range, year-to-date through October, followed by average and median Sold prices, compared to the same period in 2007. 
For single family homes in the Tucson Foothills.

Price Range	Jan - Oct 07     # SOLD	Jan - Oct 08    # SOLD	+/-%
$0 - $250K	7	18	+157%
250 -$500K	208	195	-6.2%
500 -$750K	177	133	-25%
750 -$1.0m	71	65	-8.4%
1.0 -$1.5m	51	32	-37%
1.5 -$2.0m	18	12	-33%
$2.0 & UP	11	8	-27%
Total Sold	543	463	-14.7%
	2007	2008
Avg List $	$720,905	$679,239	-5.8%
Avg Sold $	$687,806	$638,253	-7.2%
Median List	$569,900	$550,000	-3.5%
Median Sold	$549,000	$525,000	-4.4%
$$ Value of Homes Sold	$373,478,794	$295,511,200	-21%

OK, so those are the year-to-date figures, but how about
this October compared to October last year.

October 2007 = 36 homes sold, avg sold $= $674,598,
median sold $= $531,000

October 2008 = 39 homes sold, avg sold $= $684,183,
median sold $= $570,000

Of course in October 2007 we were in the first innings of the mortgage meltdown, and that too was a show stopper for sales.
And though the situation is now considerably uglier, sales and prices seem to be holding up reasonably well. Is it because we are now battle scarred and used to this new economic reality. Also note that the average sold price for this October ($684,183) is higher than the average sold price for 2008 through October, ($638,253).

OK, BIG PICTURE - average sale prices in the Foothills are down 9.3% from 2006, the peak year for Foothills home prices.
$638,253 today vs $703,616 in 2006 = -9.3%.
But sales are another matter. Through October 2006, 627 homes sold in the Tucson Foothills. This year 463 have sold. A drop of 27%.

But prices are down, not up, yet too many people continue to price their homes as if prices went up.

For instance, a home that would have been properly priced at $1,000,000 in $2006, and at about $900,000 today, is instead often being priced at $1,100,000 or more. So that home is priced 22% higher than it should be. And buyers just aren't buying it.
So those homes are sitting on the market, clogging the pipeline.

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

the big day

It may be the worst day in history to do this, but if you're looking for a break from the election, tune in here tomorrow for my monthly update of Tucson Foothills home sales. Yeah sure.

Meanwhile, here's comes the knockout punch for luxury consumption, as scrimping becomes the new black. 
Luxury Consumers Scrimp for Sake Of Planet, and Because It's Cheaper

Hey, I just traded in a BMW for a Honda.

VOTE!

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

sound familiar

Add The Wall Street Journal to those reporting on the declining sales of Luxury homes

"As the luxury real-estate market slows to a snail's pace, real-estate brokers find themselves struggling to sell a growing number of "trophy homes" that are quietly gaining a new title: white elephants."

"Realtors concede a growing number of these pricey pachyderms are sitting unsold for months and selling at steep discounts, if at all."

The Stampede of White Elephants  LOOKOUT!

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

weekend reading

There are two articles in today's New York Times business section that are real estate related and worth a read.

The first is a first-hand account by a WaMu mortgage underwriter of the pressures she was under to approve loans, no matter what.
If you still wonder how all these bad loans could have been made, read on,  Was There a Loan It Didn't Like?

And Robert Schiller holds forth on the traps and limitations of GroupThink and how it contributed to ignoring the signs of the emerging real estate bubble.
Challenging the Crowd in Whispers, Not Shouts

Enjoy!

no time to be swinging for the fences

I was out looking at high-end luxury homes today in the Tucson Foothills, and most of the ones I saw were spec homes priced from about $1.0mil to $3.5mil. Vacant builder/investor spec homes.
My favorite ax to grind. 

And depending on how you count, there are about 30 of them in Foothills. Plus another 100 or so re-sale homes priced from $1.0 to $6.450mil, that compete with these spec homes. And at the end of the day, it's difficult, impossible really, to come to any conclusion about these spec homes, except that because of the owners stubborn refusal to face the reality of the market, that in the end more of them will fail.

There are 137 homes for sale in the Foothills priced from $1million to $6 and a half million, and just 5 are (or were, in less difficult times) selling per month. That's the market. Period. And looking at the sign-in sheets, most of these homes are getting one showing a week if they're lucky, some, just one showing every two weeks. Talk about having your head in the sand.

There's no doubt that many of these spec homes will fall by the wayside, and end up as another short sale, another foreclosure, another million here - million there for us taxpayers to pay.
Why. Because these builders refuse to face reality and take their licks now, and are instead, however improbable it may be, holding out for a home run.

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