Tucson's HOT Real Estate Market

THE FACTS AND STATS ON THE TUCSON REAL ESTATE MARKET

AUGUST 2021

Brought to you by Amos & Kelly Koren

Your "Go-To" Southern Arizona Real Estate Agents

In the blink of an eye July passed and we are in hot and sticky August. With record breaking rainfall combined with the heat and humidity you’d think we live in the Amazon! But here we are in this HOT Tucson market!

 The second half of 2020 and first half of 2021 saw an explosive appreciation in housing prices (median home price in Metro Tucson in the past 12 months has gone up a whopping 30%.) This was the result of low supply and high demand for whatever inventory was available. Would-be sellers took their homes off the market delaying their planned move for fear of COVID. Additionally, to stimulate the economy interest rates dropped to their lowest ever recorded. Add to that a moratorium on evictions and foreclosures (which have been extended) and you have a perfect storm. I don’t think anyone expected this level of surge.

In Tucson it’s not uncommon to see California license plates with buyers that are “bargain” shopping. To them Arizona is a steal as compared to their hometowns. However, some clouds are beginning to pop on the horizon. I communicate daily with agents in other parts of the country who are seeing properties begin to sit slightly longer on the market as inventory of homes is slowly increasing. This is also beginning to show in Tucson, although not enough to really make a dent.

The most recent stats which came out in August for the month of July 2021 show that the median house price in Metro Tucson was reported at $330,000, a drop of 3.5% from $342,000 which was reported in June. It was the first month in which the median home price went down since December 2018. The average home price in July was reported at $407,621, down from $426,338 for June, but still 23.9% higher than in July 2020.

 Inventory of homes also went up in July to 1,109 units, up 19% from 901 units in June. Although more homes are coming on the market they are coming at a slow pace and are sold at a brisk pace. A balanced market is a market in which there is usually 6 months of inventory. Right now, for Tucson, the inventory is less than one month. Average days on market to sell a property remains at 12 days.

 The moratorium on evictions was extended for Pima County in early August for another sixty days. This puts a lot of pressure on mom-and-pop landlords; some have gone for months without compensation from a tenant who has defaulted. The moratorium on evictions for foreclosures was extended by Federal Housing Administration through September 30, 2021. 

Bottom line…the Tucson market conditions are still robust and strongly seller favored. The relative low prices are still attractive to out of state buyers. Beginning signs of inventory increases and slight drop in median price are still not enough to put a dent in buyers’ behavior and buyers are likely to continue experiencing limited inventory through the end of 2021. Although prices may level off and not appreciate at the rates we have experienced, there is still strong buyer demand. The question continues to be affordability. A rise in interest rates will be the cause for price increases to cool off but there is little political will to do that and the Federal Reserve can hurt the economy if they push rates too soon.

So…Who do you know who is looking to sell a home, a commercial property or investment property or looking to buy one that we can help? Is there anyone you know who has a real estate question about their property value? We would love to be your referral source.

Have a Great Fall Season!!

All our best, Amos & Kelly Koren

520-904-4509

https://www.realtyexecutives.com/agents/amos-koren