Reprinted from Tucson Association of Realtors' August Scorecard
By Roger Yohem, TAR Communications Director
Oddly enough, it's a good thing that Southern Arizona’s real estate recovery is steady and slow. Many of the benefits are as simple as A-B-C:
Affordability: Double-digit annual price increases are likely over. Coming off price gains of 13% in 2012 and 11% in 2013, the Average Selling Price is only 2.6% higher now than in July 2014.
Builders: Production home demand (smaller, entry-level, lower-priced product) is a sleeping giant. Although move-up, higher-priced homes sold well during the recovery, slowly changing demographics give builders time to re-evaluate this underserved market.
Conventional: Fewer cash buyers; more conventional mortgages. Investors no longer feel buy-and-flip homes come with a huge payoff. Basically, the market has seen a 5% swing from cash to conventional terms. When these investors sell, more homes in the lower $150,000 range should hit the market and be bought by “traditional” homeowners.
Defaults: After 20 straight months of less than 400 foreclosure filings, this sector has stabilized. Now the task is to sell the thousands of foreclosures still out there.
Equity: Rising values have helped thousands of borrowers regain the lost equity in their homes. They are no longer upside down on their mortgages. As values continue to climb, it will enable them to refinance or enter the market to sell and buy another home.
Financing: Mortgages are slightly cheaper than they were last summer and borrowers must now prove they can and will repay the loan. And despite tighter regulations, many lending standards are loosening as the economy slowly improves.
Government: New Fannie Mae/Freddie Mac programs reduced mortgage insurance premiums on FHA loans and required only 3% down. And much of the Consumer Financial Protection Bureau confusion has been clarified.
Home: More communities have more home buyers who want to live there instead of being dominated by rental property landlords. That results in more stability in the neighborhood that they proudly call home.
And the list of benefits goes on, as Inventory, Lifestyles, Memories, Net worth...slowly improve.
Full Tucson Association of Realtors August Scorecard here