When you’re attempting to measure the performance of the real estate market, a substantial factor that determines how well the housing market is performing is the domestic economy. When the economy is performing well with positive job reports, increasing stock prices, and improved consumer spending, the housing market will typically have a strong performance as well, which should indicate that it’s a good time to buy or sell a home. Poor economical growth leads to stagnation in the housing market, which explains why the housing market was at its worst in 2008-2009 following the stock market crash.
The continued growth that’s been seen in the U.S. economy over the past decade has manifested itself in a strong housing market throughout Tucson and the surrounding areas. However, you will need to consistently assess the performance of the market if you’re looking to buy or sell a home, which should be done annually. By properly assessing how well or otherwise the market is performing, you’ll be able to determine if it’s the right time for you to buy or sell a home.
The following is a comprehensive guide on the 2018 Tucson housing market, which should prove useful when you’re considering your options.
Home Values are Consistently Rising
The first and most important element towards assessing the health of the housing market is to look at what is happening with the home values. When these values start to drop, this is a clear sign that the market isn’t currently healthy and that you should wait before placing your home on the market or putting in an offer for your property of choice. When taking a look at the Tucson housing market, the home values are consistently rising and have been for quite some time. While this fact might seem somewhat problematic for anyone looking to purchase a home, a healthy market is almost as beneficial for buyers as it is for sellers. When you can determine that the rise in home values has become a trend, you can be much more confident that the value of the home you’re purchasing will increase as you own it, which minimizes the risk of your initial investment.
The median value for a home in Tucson is around $185,000, which is a 6.4 percent increase over the previous year. It’s predicted that the median home value will continue to increase by just under one percent from now until this time next year. It’s important to understand that the median home value is different than the median listing price for a home in Tucson, which is currently situated at $219,000. If you’re looking to place your home on the market for sale, the year-over-year increase in the median home value indicates that this is a great market for sellers. These positive numbers show that the market is competitive among buyers, which means that you will likely get multiple bids for your home and will be able to have better control over how much your home eventually sells for.
Make sure that you take a look at the average listing price for homes of your size before creating a listing price, which is important if you want to avoid making a bad first impression among prospective homeowners. The average price per square foot for a home in Tucson is right around $134, which should give you a good starting point when listing your home. The market is considered to be currently balanced, which means that there are around the same amount of buyers as there are sellers in Tucson. If you want to be able to sell your home at your initial listing price or just below this price, you’ll need to list the home properly and consider obtaining the assistance of a Tucson real estate professional who knows what it takes to sell a home in the local market.
For buyers, the presence of a balanced market means that you shouldn’t have too much competition when placing a bid on your home of choice. The median sold price for a home in the city has increased by around the same percentage as the listing price. Buyers and sellers also benefit from the fact that the sale-to-list price ratio is sitting at 98.45 percent, which should be a positive number for everyone involved in a real estate transaction. In November of this year, homes in Tucson sold for 1.55 percent lower than the listing price. If you’re a seller, this number means that you shouldn’t need to reduce your initial asking price by too much. On the other hand, a 1.55 percent decrease when comparing the list price to the sale price is great for buyers who are looking to shave off a couple thousand dollars from the initial price.
What all of this data shows is that the real estate housing market in Tucson appears as though it’s going to be a strong one for years to come, which provides you with the opportunity to sell or purchase a home without taking on too much risk!
Falling Inventory Means More Buyers & Sellers Market
Another metric that you need to look at when assessing the health of the housing market is how much inventory remains on the market from a month to month basis. Over the past few years, the median days on market for homes in Tucson has consistently fallen, which means that the inventory is lessening. The median days on market for a home in November 2017 was around 65, which has since fallen to an average of 57 days. At the beginning of 2016, a home in Tucson would remain on the market for an average of 75-80 days before being sold, which goes to show that Tucson homes are more in demand currently than they were back then.
The falling inventory for homes in Tucson is clearly a trend that has been continuing for several years and looks poised to continue for several more at the very least. The presence of a falling inventory is also displayed by the fact that the number of Tucson home sales is increasing. When taking a look at the number of homes that are sold in Tucson every June, the number increases by anywhere from 200-500 every year. This past June, a high of just under 4,000 home sales was reached, which displays that there are more buyers and sellers in the market than ever before!
If you’re looking to sell your home in Tucson, a higher number of homes on the market means that there will be more sellers that you will need to compete against. However, you will benefit from the fact that homes are being sold at a quicker rate than ever, which indicates that there are more than enough buyers on the market to compensate for the added number of homes.
A balanced market is something that’s highly beneficial for both buyers and sellers. While falling inventory might appear to be better for sellers who will be able to receive more bids from a packed buyer’s market, the higher number of homes that are listed and sold every month means that buyers are simply purchasing homes at a quicker rate than before.
Rent is Increasing in Tucson
Rent prices can also be an indicator about the health of the housing market. While the trends seen in the rental market don’t always correlate with the trends in the housing market, it’s rare for rental prices to be up while home prices are decreasing and vice versa.
The median rent for all apartments in Tucson back in November 2017 was around $1,145. Since then, the median rent has increased to $1,200 for all apartments. If you break these numbers down by the amount of bedrooms found in the apartment, the median rent has increased across all apartment sizes. For instance, the median rent for a one-bedroom apartment has risen from $625 to $650 over the past year. The most substantial increase comes with the median rent for four-bedroom apartments, which has increased to around $1,450 in November from $1,370 one year prior.
The most likely reason for this increase is because of the growing popularity of the city as a great place to live for prospective homeowners and renters. The number of rentals in November 2017 was a little over 1,500, which has since increased to an average of more than 2,000 rentals each month. This sharp increase in such a short period of time means that more people are competing for each apartment in the city. More competition means that landlords are more willing to raise prices on their apartments.
This information is yet another data point that demonstrates that the housing market in Tucson is healthy with no sign that the market is slowing down anytime soon. While the median value for a home in Tucson can dip in winter months when less people are purchasing a property, this slight reduction occurs every year and then proceeds to rebound to a new high in the spring and summer months. Overall, this past year has been a strong one for the housing market in Tucson.
The rate of increase for home prices that’s currently being predicted for next year shows much of the same. These trends have subsisted in Tucson for the past five years, which means that you can be almost certain that they will continue for at least the foreseeable future. If you’re thinking about purchasing a new home in Tucson or believe that it’s time to sell, both of these options would be good choices at this point in time!
Contact our team of local Tucson real estate professionals at Grogan & Grogan Tucson Luxury Real Estate today to get the best price for your Tucson Luxury home!