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

Check out this article by Jillian Berman, USA Today.

Looking to live the simpler life? Look no further than Tucson. AARP "The Magazine's Best Places to Live a Simple Life" list, out today, bestows top honors on the city of 541,000 in the Arizona desert. Demographers used statistics from the U.S. Census Bureau and other sources to evaluate towns and cities on a variety of criteria, says Gabrielle deGroot Redford, AARP's manager of magazine editorial projects.

Once they came up with a list of about 25 cities, editors at the magazine picked the top cities in different areas of the country to make sure that every region was represented.

With the economy struggling and readers looking to spend less money, Redford says, the editors wanted to compile a list of places with a low cost of living that offered a wide range of activities. "We decided we wanted to focus on places you could live simply," she says.

Redford says demographers and editors looked for places that are affordable and still have relatively low rates of unemployment. She added that factors such as the ability to walk and bike to work and the availability of "outdoor amenities" such as farmers markets and hiking trails also gave cities extra points.

And to make sure life is really simple, the team looked at the stress index of the cities, a measure used by demographers, which combines "rates of suicide and crime and divorce and depression and other factors that play into how stressed people feel living there," she says.

Another plus: if the city is close to a college or university. "We looked for places with great education, in particular, colleges because colleges tend to offer classes for adults and a lot of amenities," such as lectures and sporting events, Redford says. That Tucson is home to the University of Arizona helped boost it to the top.

"It's quite an affordable city in part, but it also has a lot going on about it," she says. "There are a lot of ways to enjoy living there." She adds that residents rave about the city's multicultural feel. "They just feel like it's one of those great melting pots."

Mayor Bob Walkup, the self-proclaimed "mayor of paradise," says he wasn't surprised to hear his city topped the list. "I believe that Tucson has the highest quality of life of any city in the country," he says.

Tucson's temperate climate and low crime rate make it an ideal place to live, he says. "It — no kidding — has an abundance of sunshine year round."

Are you PCSing to Davis-Monthan Air Force Base? Click on the title of this article to be linked to a great relocation guide offered on the base web site.

The guide includes information about temporary lodging, base housing, Tucson housing, vehicle registration, military in-processing, Davis Monthan history, area maps, shopping and dining, religious and medical services, recreation and other useful resources.

For information about Tucson real estate, please contact Anna-Lise Troup at (520) 906-5659.

As we approach the second half of 2009 we can see that June closed out the first half breaking records for the year. Home sales volume was up over May by 14.63%, average sales price was up by 3.06%, pending contracts were up by 9.98%, home sale units were up by 11.23%. While the median sales price is down over May by 2.88% there was also a decrease in active listings by 3.77%.

With the first 6 months behind us we can take a realistic view of the absorption of inventory which has moved in a positive direction since January with June bumping that number up to 22.9%. We still have a long way to go but the numbers show a positive sign.

Taking a closer look at the activity by zip code we still see that 85718 has the highest number of active listings at 415 with 85750 taking second at 323 for active listings. The top two zip codes for number of units sold in June were 85706/56 at 88 units and 85746 at 59 units.

The top three zip codes with the highest percentage of listings sold compared with the number of active listings in that zip code are 85757 at 40.2% (77 active 31 sold), 85711 at 36% (133 active 48 sold) and 85746 at 31.2% (189 active 59 sold).

We are looking forward to the second half of 2009 with high hopes of the continued trend of recovery.

Click on the title of this article to read the complete report.

1. It’s not a loan.
Unlike the $7,500 tax incentive that was offered in 2008, the 2009 tax credit does not have to be paid back if the homebuyer stays in the home for more than three years. The amount of credit that they are eligible for (up to $8,000) can be put toward home improvements or be spent any other way the homebuyer chooses once the credit is received. The tax credit is subject to income limitations and other qualifications, so homebuyers should consult a tax professional to find out all the details.

2. Claiming the Tax Credit is Simple.
No applications or pre-approvals are necessary to take advantage of this opportunity- homebuyers just claim the tax credit on their federal income tax return. After the amount that the homebuyer is eligible to claim is determined on IRS Form 5405, that amount is simply entered on line 69 of their 1040 income tax return forms. One thing to keep in mind, however, is that this credit can not be claimed for a future purchase; it must be claimed for a finished transaction that closes by November 30, 2009.

3. The Tax Credit may be accessed before the 2009 tax return is filed.
If a homebuyer believes that they will qualify for the tax credit, they have the option of reducing their income tax withholding up to the amount of the credit by making arrangements with their employer or human resources department. The homebuyer will then be able to accumulate cash to contribute to their down payment.

The Arizona Department of Housing has released a 22% down payment assistance program for buyers of foreclosed homes. This program is fully available statewide as of July 1, 2009.

Because access to homeownership is fundamental to Arizona's way of life, Your Way Home AZ is a financing tool that will make it easier for eligible, credit-worthy homebuyers to obtain mortgages.

Funding is made available through the U.S. Housing and Urban Development Neighborhood Stabilization Program (NSP). The state of Arizona and nine other counties and communities received more than $121 million to help stabilize our hardest hit neighborhoods through a variety of efforts.

Please call Anna-Lise Troup at (520) 906-5659 for additional information and a list of qualified lenders who can prequalify you for this program.

Click on the title of this article for a link to the program web site.

Pending home sales show a sustained uptrend, rising for four consecutive months with very favorable housing affordability and a first-time buyer tax credit boosting activity, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in May, increased 0.1 percent to 90.7 from an upwardly revised reading of 90.6 in April, and is 6.7 percent higher than May 2008 when it was 85.0. The last time there were four consecutive monthly gains was in October 2004.

Lawrence Yun, NAR chief economist, cautions that there could be delays in the number of contracts that go to closing. “Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” he said. “Rises in contract activity show buyers are becoming more active even as they face much more stringent loan underwriting standards. Speedy clarification of the appraisal rules could smooth a housing market recovery and support the overall economy.”

The Pending Home Sales Index in the Northeast rose 3.1 percent to 80.9 in May and is 6.8 percent above a year ago. In the Midwest the index slipped 1.3 percent to 89.2 but is 11.4 percent above May 2008. The index in the South declined 1.7 percent to 92.6 in May but is 7.9 percent higher than a year ago. In the West the index rose 2.2 percent to 96.9 and is 0.7 percent above May 2008.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the appraisal issue is complicated. “We see that distressed homes often are selling for 20 percent less than normal homes in the same area, but some appraisals don’t distinguish between traditional homes and distressed property,” he said. “In many cases appraisers from outside the area are being used, but as everyone knows real estate is local and appraisals should be done by an expert with local expertise.”

McMillan said sellers shouldn’t hesitate to speak with an appraiser about their home. “Sellers should feel free to tell an appraiser about improvements and renovations to their home, and how it compares with other homes in the neighborhood,” he said.

“Also, if recent sales in the neighborhood were discounted, but not similar to your home in terms of quality or condition, that should be pointed out. It wouldn’t hurt to put all this in writing, especially if an appraiser is not familiar with your area. A Realtor® could offer guidance and information to help you with this process.”

NAR’s Housing Affordability Index remains at historic highs. The affordability index fell to 171.6 in May from an upwardly revised 178.8 in April, which was the highest on record dating back to 1970. “Under these conditions the typical family would devote only 14.6 percent of gross income to mortgage principal and interest, which is one of the lowest percentages on record,” Yun said.

The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

A median-income family, earning $60,800, could afford a home costing $296,700 in May with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of what a median-income family can afford. The affordable price was significantly higher than the median existing single-family home price in May, which was $172,900.

The first-time buyer tax credit also is benefiting the market. “Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade,” Yun said.

Existing-home sales should trend up through the end of the year, with normal local market differences. “The big question is how much the appraisal issue will impact the ability of contracts to go to closing,” Yun said. “We are currently conducting a study to assess the degree to which new appraisal rules are impacting home sales.”