IS THE TUCSON HOUSING MARKET FINALLY SLOWING DOWN?
Video Transcript
Table of Contents
Has The Tucson Housing Market Toppod Out?
Is the Tucson housing market finally starting to slow down?
Each and every month I do the Tucson Housing Market Report where I go over the numbers for the Tucson housing market. And back in my May, June video, if you go back and look, I’ve predicted that the top of this housing market is here, and it was May, June.
And so in terms of home appreciation, the market is definitely slowing down. But there are some other things to look at, and a couple of things that I don’t include in my monthly Tucson Housing Market Report, and that is unit sales. How many homes are actually selling and is that portion of our market slowing down?
So I’m going to dive into a couple numbers that I don’t normally go over in the Tucson Housing Market Report. But to answer the question is the Tucson housing market slowing down, definitely yes in some areas and no in other areas. And again, I’m going to go over in detail and explain where we’re slowing down and where we’re not slowing down.
First, I’m going to go over why the Tucson housing market is not slowing down. And the area that it’s not slowing down is the number of units of sales. And in a normal, healthy market in Tucson in terms of things not slowing down, the definition of that is whether or not there are over a thousand units sold per month in the MLS. And although the market is slowing down in some areas, in terms of unit sales we’re not seeing a big pullback in unit sales. So in the respect of people still buying and selling homes, that portion of our market is definitely not slowing down.
Tucson Homes Sold
Inn the month of June in the MLS, there were 1,132 homes sold. And that includes everything. Townhomes, condos, manufactured mobiles. As long as we’re over about a thousand units per month, things are not slowing down. And so in that respect, in terms of units sold, we are definitely not slowing down.
And then the other thing to look at is what we call pending sales. That’s the homes that are under contract that typically show up the following month as closed sales.
Pending sales for June, there were 1,114 pending sales in the MLS. And again, in a normal, healthy market, we’re usually over a thousand units. So anywhere from a little over a thousand upwards to maybe 1,200, 1,300, 1,400. And I’m going to show a chart that gives you a pretty good idea in terms of unit sales and what to look for in terms of whether or not the market is slowing down in terms of the activity of units bought and sold in the MLS. So in that respect, our market is definitely not slowing down.
Tucson Home Appreciation Is Slowing Down
Where I do see our market starting to slow down is the rate at which homes are going to appreciate moving forward. And in a normal, healthy market, homes typically appreciate anywhere from four to 8% per year. And on a good year, maybe 10%. And over the last couple years, we’ve seen double digit appreciation rates, about 24% year over year. So where I see our markets starting to slow down is at the rate at which homes are going to appreciate moving forward. Again, I predicted that May, June will be the top end of this housing market in terms of home values. And from here, we’re going to go sideways and appreciate at a much slower rate. So in June, home values in Tucson, the median home sales price for June was 385,000, which was down a thousand dollars from the previous month of May.
The average home sales price for June was $475,253, which was down $4,748 from the previous month.
So yes, I do feel our market is starting to slow down. And that is at the rate at which homes are going to appreciate moving forward. Average days on market are going to start to go up. We’ve seen a lot of price reductions in the MLS. And so again, I do feel that our market is slowing down. I still think that unit sales are going to be good moving forward. But in terms of sales prices, they’re not going to be appreciating at double digit rates moving forward. And again, there’s some key indicators that are showing that. Inventory levels are slowly starting to tick up.
I would encourage you to do is head on over to TucsonHomesandLots. And if you scroll down, you’ll get the Monthly Market Update and you can dive into the actual report and really understand what’s going on here in the Tucson housing market.
Geek Out On Tucson Housing Market Numbers
If you’re one to want to geek out on the numbers and really dive into what’s going on here in the Tucson housing market, I want to show you how to get the Tucson housing market report that comes out each and every month. If you head on over to TucsonHomesandLots.com, and if you scroll down, right here it says the Tucson Monthly Market Update. If you click on that, this is where I dive into, each and every month I dive into what’s going on.
There are a lot of things that I don’t cover. I just cover some key indicators that I like to go over and inventory levels, again, which I think are the leading indicator. But you can read through this report. And then if you scroll towards the bottom of the report and click on right here, the Tucson Housing Market Full Report, if you click on that, that is the PDF that each and every month TAR puts out where you can really dive in and pay close attention to what’s going on on the Tucson housing market if you’re one to want to really look at the numbers and see what’s going on here in the Tucson housing market.
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In Summary
So to wrap it up, yes, I do feel the Tucson housing market is slowly starting to slow down in regards to the rate at which homes are going to appreciate moving forward. We’re going to go back to more of a normal four to 8%, maybe 10% on a good year.
Things are definitely starting to change, but in terms of unit sales, I do still think that we’re going to have activity and we’re not going to see a major meltdown in terms of the units of property sold here in Tucson, because there’s still a lot of demand. Inventory levels, although they’re going up, they’re still low based on what I think would be a normal, healthy market in terms of equilibrium in terms of supply and demand.
So just something to keep an eye on. But I encourage you to go look at that monthly report that I put out each and every month to help you better understand what’s going on here in the Tucson housing market.
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