March Tucson Housing Permits approach 200 – up 27% Y-O-Y

There’s not much to not like in the March Tucson housing permits report. All the present fundamentals are showing positive signs for a housing industry that has been waiting and hoping for recovery. According to Ginger Kneup of Bright Future Real Estate Research, and publisher of The Southern Arizona Housing Market Letter, March was a very good month, and supports a recovery in sight.

Recovery, as demonstrated by volume of new home permits, was up by 27% year-over- year and up 32% month-over-month from February (148 permits) to March (195 permits). Almost 200 permits were pulled in the month of March, less than we saw in December, but if you recall there were extraordinary conditions in December caused by the City of Tucson taking a break from collecting impact fees, and builders behaving accordingly.

New home closings improved by 32%, from 124 in February it was up from 112 the month before, and a healthy 152 closings recorded in March.

We reported a few days ago on the Tucson median sales price reaching its highest level since 2009, but it’s worth repeating, this according Roger Yohem, Communication Director at Tucson Association of Realtors. See Real Estate Daily News April 14, 2015 for full story.

Sales volume is up by 17.3% year-over-year in March,  which matches a 12.7% increase in unit sales, or $266.1 million, based on data collected by TAR.

The important thing that home builders are watching is the narrowing of the price gap between new and resale homes. In March, the new home median price was $245, 355 compared to $177,000 for resale homes (foreclosures excluded), that’s a 4.7% improvement over last year at this time.

Kneup writes in her newsletter, “As demand returns and home buyers’ appetite increases, there is room in the market for success across all price ranges. The transaction level data from March supports this idea and resulted in a reasonable new home median of $245,355…. “Reasonable” in the context of current interest rates…and affordability.”

On the resale side, Kneup reports that foreclosure homes represented 14.5% of total sales in March, the lowest number of monthly foreclosures since 2008, underpinning these pricing gains are taking hold in the resale market.

Whether of not these improvements can sustain themselves is the key to a real recovery across the board, however for the time being, it’s looking good!

To learn more go to www.orangereports.com Kneup can also be reached at 520.360.7933 or by email at ginger@orangereports.com.