Tucson Area Market Report for 1st Half 2021*
We are half way through this year and what started off as a hot market has moved into unprecedented territory. The data below for the first half of 2021 certainly reflects what we’ve seen in the Tucson market; more buyers & fewer homes. But over recent weeks, we at Asia Deck & Associates have tracked local metrics that are encouraging. Namely, the number of homes available to show have steadily risen. The number of listings that have had price reductions has also risen, possibly indicating the price-driving feeding frenzy has softened slightly. So, is relief in sight? Maybe, according to Realtor.com. “…while home prices didn’t cool until November 2020, we expect this year’s home prices to ease off of summer highs sometime in July or August in a much more typical fashion, creating opportunities for off-season home buyers.”, according to Realtor.com. ‘Even though the housing market continues to be short on homes for sale, the steady increases in sellers are helping.”
the Quick Facts:
- Home prices have increased over 10% so far this year. In any other year, an increase of more than 5% would be a good year for Tucson
- We have 31% fewer homes on the market than we did at the beginning of the year. At this time of year we would normally have ~2000 homes on the market to look at. Today we have 863.
- AVERAGE Days on Market is 5 days. Most listings under $300K are under contract within 2 days.
The driving factors:
Low Supply + High Demand + Tactical Risk = Aggressive Market
- Low supply
- New home builds lagged for past 10 years. And now labor and material shortages are not helping.
- Many are finding it financially preferable to stay put and take advantage of great refinance rates.
- Older folks not selling yet and are staying in their homes longer instead of going to assisted living.
- Work from home keeping some people from moving around.
- High Demand
- Money from stimulus, savings from working from home, and saving from not being able to go out is available to be used for down payment.
- Low interest rates! Everyone wants to get into a home with the best rates.
- Lure of the investment opportunity in home ownership and the fear of missing out.
- Tactical Risk
- Cash from higher cost-of-living areas buying investments or retirement homes make less risky and more attractive offers than those with loans.
- Average sell price 5% over asking. But some desperate buyers are offering tens of thousands over asking.
- Sellers receive so many offers, they can be very choosy. Even demanding.
- First timers with limited resources getting beat by better equipped buyers
- Buyers taking risks- waiving rights to inspect, appraisal.
the OMG Graphics:
Median Sales Price still on a steep incline
While available homes steadily declines
And homes are selling faster than ever
- * Data through June 2021. All data is for Single Family Homes in the Tucson Area only, all price ranges