Anna-Lise Troup's Tucson Area Real Estate Update: April 2009

RISMEDIA, April 18, 2009-New home sales, traffic and expectations all lifted meaningfully in March. Findings that support this news are detailed in the John Burns Real Estate Consulting April survey of builders across the country. According to the survey, while the improvement can be partially attributed to seasonality, we can also point to a shift in builders’ optimism in many metros. The rating of future sales improved substantially, and expectations rose in every single region except the Northwest.

This month, 233 public and private builder executive representatives from over 160 companies around the country provided market ratings that represent conditions at 1,984 new home communities in 82 unique metros.

“We think the improvement is attributable primarily to improved affordability,” said John Burns, CEO of Irvine, Calif.-based John Burns Real Estate Consulting. “The new home tax credit in California is also helping.”

“Earlier in the year, the gains in traffic and sales were mostly limited to builders at the affordable end, but in April we began to see some gains for move-up builders as well,” said Jody Kahn, vice president. “This trend is still spotty, and limited to a handful of markets, including Raleigh, Atlanta and Nashville.”

Results also showed that builders in a handful of locations have recently purchased land, and that more plan to purchase in the near-term. “We know from prior housing downturns that the resetting of land prices is an important step in the process of clearing the market,” said Kahn.

Survey Highlights:

Land Buying is Increasing: Already this year, 18% of survey participants have purchased land and 29% indicate they will buy land in 2Q09. By 2010, 47% expect to be buying.

Builders are targeting Washington D.C., Charlotte, Dallas and Tampa for near-term land buys. There was a pronounced message that buying would not be occurring in Phoenix, Atlanta, Austin, Chicago, Denver, Las Vegas, Orlando and Orange County for quite some time. There were mixed messages in California markets of Riverside-San Bernardino, San Diego and Sacramento.

Recent buying appears to have been predominantly among private builders. Of purchases made this year, 35% were by public home builders.

Sales, Traffic and Expectations Jump: The builders’ rating of current sales reached a record level since our survey’s inception, traffic ticked up in every region but one, and expectations climbed as builders’ outlook appears to be brightening. No region of the country reported declining net sales per community. Average net sales per community rose to 1.7, which is the highest level since September.

Builders Start More Homes: 70% of builders started homes this month, compared to only 59% last month.

Pricing Net of Incentives Inches Toward Flattening: Overall, the direction of new home pricing moved closer to flat, but regions like Southern California report decreasing prices over last month.

Inventory Declining: The average number of unsold, finished units per community is continuing to trend down nationally, to 4.0 units from 4.2 last month. This is the lowest number we have seen in more than six months.

For more information, visit: www.realestateconsulting.com.

Did you know this new tax credit? Thought you might be interested.

General Information
In 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act will provide a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers filing joint returns.

This tax credit will be calculated at a rate of 6.2 percent of earned income and will phase out for taxpayers with modified adjusted gross income in excess of $75,000, or $150,000 for married couples filing jointly.

For people who receive a paycheck and are subject to withholding, the credit will typically be handled by their employers through automated withholding changes in early spring. These changes may result in an increase in take-home pay. The amount of the credit will be computed on the employee's 2009 income tax return filed in 2010. Taxpayers who do not have taxes withheld by an employer during the year can also claim the credit on their 2009 tax return.

It is not necessary to submit a Form W-4 to get the automatic withholding change. However, an employee with multiple jobs or a married couple whose combined income places it in a higher tax bracket should consult the IRS withholding calculator and, if necessary, submit a revised Form W-4 to ensure enough tax is withheld. Publication 919 provides additional guidance for tax withholding including a special Making Work Pay worksheet.

Consult the IRS for more information.

Don’t look for drama in this month’s statistical report. For the third month in a row we see a leveling off from nearly every perspective. Listing inventory remains 17% lower than this time last year and is down .49% from February. New pending sales are down 22% from last year but are up 7% from February. If this trend (less listings/more sales) continues, we’ll start to absorb some of that excess inventory.

The median sales price is down 10% year over year and only moved fractionally from February to March. This is in direct contrast to national reports that show a continued downward spiral in values. Our market usually out-performs other parts of the country during this season and this year is no exception.

The only real exceptions to this blasé report could be the unit sales which are up 34% over February at 892. That was only 4% lower than the same time last year.

Following are some community events coming up in Rancho Sahuarita:

Happy Days School Carnival
Join the community as they celebrate the annual Sahuarita Primary School PTO Carnival on Saturday, April 4th from 10 am to 4 pm at Sahuarita Primary School. Enjoy games, prizes, food, booths from local vendors, and entertainment courtesy of the children of Sahuarita Primary. All profits from this event will go to playground enhancements for the school. Dress up in your favorite 1950's attire or come as you are! All are welcome!


Spring Showcase Celebration
The Town of Sahuarita is hosting a fine arts and craft show on Saturday, April 4th and Sunday, April 5th from 10 am to 4 pm at the Sahuarita Municipal Complex, 375 W. Sahuarita Center Way. Meet artists and enjoy FREE refreshments provided by Sertinos! Also enjoy a performance by the Continental Ballet on Saturday at 3 pm. Don't miss this wonderful event!


Spring Co-ed Volleyball League
Teams are now registering for the Town of Sahuarita Parks and Recreation department Spring Co-ed Volleyball League. The league runs April 6th through May 13th and meets on Mondays and Wednesdays in the evening. Ages 16 years of age and up are eligible. Register at Anamax Recreation Center or log on to www.ci.sahuarita.az.us. Registration is on a first come, first serve basis. For additional information call 625-2731.

Spring Carnival
The Town of Sahuarita Parks and Recreation department is hosting their annual Spring Carnival on Saturday, April 11th from 11 am to 2 pm at Anamax Park. This event is FREE and open to all individuals. The Easter Bunny will be on hand from 11:30 am to 1:30 pm followed by the Easter egg hunt at 1 pm. Don't forget your cameras. Families can enjoy jumping castles, music, carnival games, and more!

Register Today
Your vote is very important. Three Town Council seats are up for election soon, and it is a critical time for decisions regarding the Town's economic future. You must register before April 20th to receive a ballot. Registration forms are available at the Clubhouse or register online at www.recorder.pima.gov.