Mid-year house trends show a dramatic slowdown

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As in life, things are constantly changing in the real estate market. 

We’ve been through some extraordinary years in the recent past with challenges, surprises, rapid growth in sales volume, extraordinarily low housing inventory, incredibly low interest rates, job growth, imminent recession, COVID-19, and, yes, employment expansion as well. 

We’ve seen political strife. We’ve seen stock market swings. We’ve seen it all! And, yes, we’re going to see more change. This year’s real estate market is in stark contrast to last year’s. 

2023 has been marked by a dramatic slowdown in real estate activity. The year-to-date decline in closed transactions in Tucson is 24%, in Oro Valley is 17%, in Marana is 8%, in Vail is 17%, in Sahuarita is 24%, in Green Valley is 29%, in SaddleBrooke is 19%, and in Cochise County is 26%. 

New listings are down in a similar fashion. Inventory — or should I say lack of inventory — is part of the issue. Also, mortgage interest rates are a part of the issue. Though the economy shows signs of doing well, economic uncertainty is also a big part of the issue. There are myriad factors contributing to the dramatic slowdown of real estate activity in 2023. 

In the general Tucson area, the median price of a home is up to $360,000. In comparison to other metropolitan areas, the Tucson area is still a “bargain.” This should be a continuing positive factor driving real estate activity back up. Oro Valley and SaddleBrooke are the only Tucson areas that have seen a decline in median home value with values of 16% and 9% dropping, respectively.

Prognostications vary widely on the direction of the real estate market. Overall, slow and steady upward trends in prices and volume seem to be the consensus. Bottom line is Tucson-area home prices are continuing to trend up. 

Homes are selling at very close to list price. This allows sellers to make concessions, if they so choose, to buyers such as mortgage interest rate buydowns which help with affordability. 

Buyers should be prepared to act quickly in this market. It is a seller’s market again. We’re seeing reflections of a year or two ago when well-priced homes would sell very quickly with multiple offers.

Sellers should be careful to not overprice their home and be willing to work with buyers as I said earlier. Seller concessions, particularly toward mortgage interest rate buydowns, can play a large role in selling one’s home in the shortest amount of time possible at the best price. 

The Tucson-area real estate market, though much slower than it was previously, is still strong in my opinion. Predictions are mostly positive. The Tucson area enjoys relatively low prices, low real estate taxes, great employment opportunities, low cost-of-living, plentiful recreational opportunities, and offers a great lifestyle. I feel this bodes well for Tucson-area real estate. 

Gregory Richman is an associate broker at Long Realty Company. He can be reached at 520-248-1239 or [email protected]. His websites are tucsonarizrealestate.com, richmantucsonhomes.com and maranahomesaz.com

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