TREDaily.com – February 2010 Tucson Real Estate Market Statistics

By now you should have received your 2009 Property Tax Statement from Pima County. If you’re like me and most people I’ve talked to about it, the notice arrived Oct. 1 — the same day it was due to be paid. (Didn’t Congress pass a law saying credit card companies couldn’t do such things?)

Oh well, you have until 5 p.m. Nov. 2 to pay the first half of the payment.

In any event, when the bills arrived I had hoped that I could find some trends among people I know as to what happened to their property taxes.

You’ll recall there were reports of assessed valuation going up an average 7 percent and tax rates coming down anywhere from 3 to 9 percent. But what really happened after everything was put together? What was the bottom line? Did tax bills go up? Did they go down? What taxing entity had the biggest swings?

Well, after talking to a geographically random sample of 11 homeowners and two business owners I can tell you the average among them is that their tax bills went down nearly 3.2 percent.

Everybody got hit with a state tax for school equalization that had been suspended for three years. All but one person I talked with saw their primary taxes to run Pima County government go up, on average by 7.5 percent. The county’s secondary taxes to pay for voter approved bonds and such was up 16.4 percent but the dollar figure amounted to an average of less than $50 for the year.

In my little focus group, there were four people who pay property taxes to the City of Tucson. They went up an average of 4.7 percent, which amounted to just $3.80 for a year.

School districts seemed to have taken a hit everywhere. The biggest drops I found were in Catalina Foothills, where the primary taxes on three property tax statements went down an average 28.9 percent. Which is ironic, considering voters in that school district have approved every tax override and bond election that’s ever been put before them. Clearly they’ve voted to pay more for their schools and yet in the convoluted way Arizona computes property taxes, the amount they’re paying dropped dramatically.

In Tucson Unified School District, the average of three taxpayers’ bills was down 11 percent.

I made no attempt to be scientific but the year-to-year changes in tax statements was about as random as it could be.

In the end, media reports about average increases or decreases don’t really play out that way. As taxpayers we may feel better if we wind up paying less than the average increase but there’s going to be a few people who are stuck with bills that are way outside the averages.

Maybe that’s the way the system is supposed to work. After all, without a critical mass it prevents taxpayers from rallying behind a common cause. This way government can keep on functioning just as it always has.

For your sake I hope your property taxes went down.

Home sales in the Tucson market fell 2 percent in September compared with the same month last year, while the median price was down about 9.5 percent, according to the most recent report from the Tucson Association of Realtors Multiple Listing Service.

The 945 sales in September were down 3.6 percent from August.

Homes sold last month at a median price of $163,000, down from $180,000 last year but up slightly from $162,595 in August, the Realtors group said.

The median price — which falls in the middle of prices paid — is considered a more accurate measure than average price because it negates the effect of very low or very high prices.
The average sales price in September was $196,755, down from $199,626 in September 2008, the Realtors said.

Pending sales contracts were up nearly 60 percent in September from the same month last year, and up 4.6 percent from August.

In the third quarter compared with the first quarter, sales were up 39.5, the median price was down 1.7 percent and active listings were down 20 percent.

MLS President Kimberly Clifton noted that active listings have been dropping all year and the Realtors expect that trend to continue as homebuyers take advantage of tax credits.

Home prices in the Baltimore metro area were among the weakest in the nation this summer, but there are some hopeful signs for frustrated sellers, according to a new report by a real estate data firm.

Prices rose a tenth of a percent in the metro area in the four months ending Sept. 25 compared with the previous three months, California-based Clear Capital said in a report released today. That’s lower than all but two other major housing markets: Las Vegas and Tucson, Ariz. But it’s the first break in price declines for the Baltimore area since the summer of 2007.

Kevin Marshall, president of Clear Capital, thinks earlier increases in other parts of the country had a psychological effect on Baltimore buyers.

“People get very scared in real estate that they’re going to miss the bottom,” he said. “You have people making decisions based off, for lack of a better term, fear that they’re missing a really good deal.”

Clear Capital draws its data from recorders’ and assessors’ offices, calculating price by comparing repeat sales of the same homes over the years. Its most recent period is four months rather than the typical three, Marshall said, because the company wants to balance out the desire to include the most up-to-date numbers with the fact that the newest data is often incomplete.

Overall, prices in the metro area have declined more modestly than in the country as a whole, the report says: 21 percent here since the housing market peaked in 2006 vs. nearly 32 percent nationally. But decreases have accelerated locally in the past year while moderating elsewhere. Prices fell more than 12 percent in the metro area compared with last summer, compared with just under 10 percent nationwide.

The metro area’s healthiest spot seems to be the 20723 ZIP code in Laurel, where prices fell less than 1 percent vs. a year ago. The report credits the community’s location between Baltimore and Washington.

Hardest-hit was Edgewood, ZIP code 21040 in Harford County. Prices fell almost 25 percent from a year ago, and 34 percent of its sales were homes that had been taken back by banks.

Just under 20 percent of sales in the Baltimore metro area were foreclosed homes, the report estimates. That’s lower than the national average of about 29 percent, reflecting a high level of foreclosures in some markets.

In Las Vegas, for instance, six in every 10 sales this summer were foreclosed homes.

Science Foundation Arizona has secured a $12.1 million loan from one of its donors to cover bills that Arizona so far hasn’t paid.

The private foundation said the loan is an emergency cash infusion that will keep scientists working at Arizona research labs on projects such as renewable energy and drug and medical-device development.

But the foundation will continue to press the state to pay $18.5 million that a Maricopa County judge says the state owes.

“This is the only thing that we can figure out for the short term,” said William Harris, president and chief executive officer of the foundation.
“This is really a stopgap to prevent a complete loss of the gains we’ve made.”

Foundation officials said the loan is needed to pay for 16 education and research grants that are past due, including research projects that have halted because of a lack of cash or that are being wooed by other states.
The Critical Path Institute, or C-Path, a Tucson-based non-profit that received grants from the foundation, is among the groups that halted work but will get cash to resume research.

“That is music to my ears,” said Raymond Woosley, chief executive officer of C-Path, which helps pharmaceutical and medical companies meet federal standards for new products.

Although the loan will sustain many of the foundation’s existing grants, it does not solve the larger question of the group’s long-term prospects for state funding during tight economic times.

State and private business leaders created the foundation in early 2006 to stimulate and diversify an economy that many say relies too heavily on tourism and real-estate development.

The group combines public and private dollars to spur research, technology, and science and math education in Arizona.

In 2007, the Legislature committed $100 million over four years to the foundation, through the 21st Century Fund, on the condition that the foundation match the public dollars with private donations.

But the Legislature, led by Rep. Sam Crump, R-Anthem, gutted the foundation’s funding this year and swept the money into the state’s general fund to narrow the state’s budget gap, which exceeded $1 billion.

Crump still insists that the state should not fund the foundation, even if it means breaking the foundation’s existing contracts.

“These contracts shouldn’t have been entered into in the first place,” Crump said this week. “I am pleased that, thus far, we have not paid them.”
The foundation filed a lawsuit this year that alleges the state reneged on the foundation’s research contracts.

A Maricopa County Superior Court judge in June issued an $18.5 million judgment against the state in favor of the foundation, but the judge’s ruling did not force the state to pay the judgment.

The foundation continues to wage a court battle to collect the money.

Up next: High court
This week, the Arizona Supreme Court agreed to hear the foundation’s argument on why the state’s high court should take jurisdiction over the funding battle.

The court on Oct. 27 will consider the foundation’s request for an expedited review of the case.

Despite the state’s budget woes, Gov. Jan Brewer said the state has an obligation to pay the foundation.

“The state has a bill to pay, and the governor intends to work with legislators to pay it,” said Paul Senseman, Brewer’s director of communications.

The bridging loan will come from local philanthropist Jerry Bisgrove, who in 2007 donated $25 million to the foundation for research and education grants.

The group already has spent about $6 million of that donation on grant awards. The loan amount of up to $12.1 million will be repaid by money collected from the court judgment as well as future budget allocations, said Margaret Mullen, the foundation’s chief operating officer.

State law allows parties to charge annual interest of up to 10 percent for past-due court judgments. That amounts to a taxpayer bill of more than $5,000 each day the state does not pay the $18.5 million judgment.

Bisgrove, a real-estate developer who has donated tens of millions to community causes through his Stardust Foundation, said he has no problem with science foundation’s plan.

“I told Bill (Harris), ‘Whatever you need to do, let’s do it,’” Bisgrove said.

“We have to protect the future of Arizona with high-quality jobs.”
Bisgrove added that he also talked with Brewer and said he is confident she “wants to do the right thing for the state” and fund quality research that will create high-paying jobs.

Several research projects have either slowed or stopped in recent months when the grant dollars stopped flowing.

The fallout
C-Path’s United States Diagnostic Standards hired several scientists after securing a science foundation grant in 2007 to launch its business of certifying lab tests to the standards of the Food and Drug Administration.
When the grant funding dried up, USDS warned it may be forced to relocate to Maryland, where economic-development groups have wooed the startup.
The Center for Chemical Genomics in Tucson halted work on finding new genes and biomarkers linked to disease.

It also halted cancer research, and one postdoctoral researcher left for another state.

Phoenix-based International Genomics Consortium also warned it may be forced to shut down a research program without continued funding.
Foundation officials said the private sector has held up its end of the bargain, with three business groups footing the bill for the group’s operating costs and private donors kicking in $25 million each year to match the state’s contribution.

Harris said he is optimistic that Brewer and the Legislature will restore the foundation’s funding.

“There has been a growing understanding of the value we offer, from the executive branch to the Legislature,” Harris said.

“I think everybody understands this is a very helpful thing for Arizona’s future.”T

Realtors’ median gross income dropped 14 percent in 2008, to $36,700, forcing many less experienced Realtors to leave the business, according to a survey by the National Association of Realtors.

NAR’s 2009 Member Profile showed the median age of Realtors rising from 52 to 54 and average years of experience increasing from eight to 10.

The survey revealed the extent to which experience is tied to earnings: Those with two or fewer years in the business had a median gross income of $8,600 before taxes and expenses; those in the business at least 16 years had a median gross income of $53,900.

Sales agents had the lowest median net income ($18,700), followed by associate brokers ($27,000), broker-owners ($31,700), appraisers ($39,600), and managers and broker-owners not engaged in sales ($44,400).

Most of the Realtors surveyed — 60 percent — were licensed as sales agents, while 24 percent had broker’s licenses, 16 percent were licensed as broker associates, and 3 percent as appraisers.

Credits: Inman News

TRE Daily’s team of agents are experienced, and we are having no issues finding and serving new clients. It must be the way that we market ourselves and how we are positioned in this industry. You may be looking to purchase a home through a foreclosure or a short sale, but just remember that you want to find a Realtor who is knowledgeable and skilled at that matter. We are. This year of 2009, those are the kinds of deals we’ve been handling by the majority. Give us a call at 1 (800) 536-7480.

If you bought a home in Arizona five years ago, you’ll probably be able to get only slightly more than you paid for it if you try to sell it now.

New figures from the Federal Housing Finance Agency show that the average purchase price of a home in Arizona dropped almost 20 percent in the last year. On average, that means a house that was selling for $200,000 in the first quarter of 2008 now is worth about $39,000 less.

Longer term, the agency figures the sales price of an average Arizona home in the first quarter of this year is about 14 percent higher than what it was five years ago.

The picture is a little less bleak when looking at a broader index the agency uses, which computes not only the price of homes but also the value of other homes as measured by appraisals done for refinancing. There, the combined year-over-year index is down only 13.6 percent, or a loss of $27,200 on that same $200,000 home.

And the value now is about 55 percent higher than in 2002.

The figures, prepared quarterly, may be somewhat more precise than some other indexes that look at the median sales prices of all homes sold in a given quarter. That is because the Federal Housing Finance Agency uses figures that compare only the same homes over and over, both in terms of actual sales and appraisals.

The decline in values, using both sales and appraisal figures, is not uniform around the state.

In the Phoenix metro area, which includes both Maricopa and Pinal counties, home values were down about 17.3 percent. But the numbers suggest the bottom may be near: The difference between the first quarter of 2009 and the last quarter of 2008 was just 1.3 percent.

Tucson showed a similar pattern, where the quarter-over-quarter decline was just a hair less than 1 percent. The one-year change was down 9.8 percent.

The Prescott area actually managed a small increase in home values in the last quarter.

“Our latest data are consistent with growing evidence that housing market conditions may be stabilizing in some parts of the country,” Federal Housing Finance Agency Director James Lockhart said in a prepared statement. He said future numbers may be brighter as people are able to take advantage of new stimulus programs, including a tax credit for first-time homebuyers.

While the situation may be easing in Arizona, the state still finds itself near the bottom of the chart.

Nationally, the average purchase price of a home dropped only about 7.1 percent in the last year. And only three states had sharper declines than Arizona: Florida, California and Nevada.

At the other extreme, only four states showed year-over-year increases in home sale prices: Alaska, Oklahoma, North Dakota and South Dakota.

Credits: East Valley Tribune

During the 1970s, many Downtown Tucson buildings, including the 1917 Santa Rita addition, were covered with layers of stucco and new facades, obscuring their original designs.

Today, many of these buildings are being “excavated” and restored to their earlier glory. For example, many of the original details of the Compass Bank at 120 N. Stone were revealed after a concrete covering was removed. The Roy Place (Walgreens) Building at the corner of Stone and Pennington is now being restored.
Regrettably, buildings such as the Thrifty Drugstore on Congress Street were torn down before it was known that the original building was well-preserved beneath the false facade. In that case, a beautiful concrete art deco building was lost.
Irreplaceable landmark buildings like the Santa Rita addition are invaluable to the future of Downtown. They create a unique sense of place and shape the character of our city.

If the Santa Rita Hotel has the possibility of being restored, this is an extraordinary opportunity for economic revitalization and celebration of the city’s individuality.
This project has the power to define the future of Downtown redevelopment. Restored and integrated into a new project, it can set a higher architectural standard and demonstrate our community’s commitment to preserving our shared past.

If this building is demolished without serious conversations and honest evaluations of its reuse, a gloomy message is delivered to all potential Downtown investors.
Any citizen can stand on Scott Avenue and discern the clues to the original Santa Rita Hotel. Through the cracking plaster of the Santa Rita’s western facade, the original window configuration just below the surface can be seen. The design concepts of 1917 are still available to be recovered.

The Santa Rita Hotel also represents a tremendous quantity of embedded energy that can be conserved if the building is restored. In our energy-dependent economy, the greenest building is the one that is already built.

The irony is that the current plan for the property calls for a new Tucson Electric Power Co. headquarters built to Leadership in Energy and Environmental Design Platinum standards, but the plan does not include the re-use of the existing 1917 Santa Rita building.

Preserving and restoring the Santa Rita Hotel and other early Tucson buildings is not an argument for stopping or limiting economic reinvestment in Downtown. Actually, it focuses investment in the architectural heritage that makes Tucson special.

It is a myth that economic reinvestment and historic preservation are mutually exclusive. The only Downtown reinvestment projects that have succeeded are rooted in historic preservation, including the Hotel Congress, the Rialto Theater, the Temple of Music and Art and the Historic Depot. If TEP can come to the conclusion that preservation is a community need, everyone wins.

It always seems so easy to find reasons why a building needs to be torn down. Instead, we should be looking at all the reasons why it should be saved. We all observe that the “revitalization” of the 1960s and 1970s was a catastrophic mistake. It is an enormous irony that those mistakes — the literal covering up of the facades — are today being used to justify demolition.

We will lose the distinctive quality of our Downtown if we perpetuate the mistakes of the 1970s. Let’s invest in Downtown, minimize our energy expenditures through green revitalization and restoration, maximize the return on our investment dollars, and preserve our heritage for future generations.

If you share my view, please visit www.ci.tucson.az.us/mcc.html or write or call your City Council member.

Credits: Demion Cinco

Foreclosures, short sales, HUD homes, and seller carrybacks

This is a Buyer’s market in Tucson and homes near the U of A bring in between $400 and $500 per month per bedroom. If you want to invest but are nervous about it, the U of A area is a captive market. The only living quarters through the university itself for students are small, cramped quarters and all students eventually expand into 2, 3, 4 or 5 person groups in condos or single family homes with backyards.  A typical 3 bedroom, 2 bath home rents to students for between $1200 and $1500 per month, especially if biking distance. We know all the preferred areas of student living.

More often than not parents take responsibility for the rent and lease. Security is taken up front in case of damage. We know a number of rental management companies that handle student rentals if you are not local and don’t want to bring in the students yourself. Management companies typically take 10% per month.  So, do the math and you will see that even in this market, depending upon how much you can put down, when the mortgage is lower than the rent you receive monthly you have cash flow and can calmly wait for the equity to increase.  There are 3 bedrooms in good condition near the U of A starting at $100,000.

Contact us to find out more about University investment properties. And to learn more about financing, proceed to our Tucson Mortgage page.

An initiative drive launched Friday could give Arizonans a chance to cut their property taxes.

Dubbed Prop 13 Arizona, the measure would roll back the assessed value of homes and businesses to what they were in 2003, before speculators helped spike prices. Those rising sales prices, in turn, boosted the tax assessments of everyone else in the neighborhood.

The initiative also has a provision designed to keep local governments from making up the difference by hiking the tax rate — the figure that, multiplied by assessed value, determines the actual taxes. It would limit annual taxes on homes to no more than one-half of 1 percent of their value. So the owner of a house valued at $200,000, at 2003 prices, would pay no more than $1,000 a year.
Taxes for commercial, industrial and agricultural property would be capped at 1 percent of their 2003 values.

If the measure gets on the ballot and is approved, it would permit future assessment increases of only 2 percent per year.

Not everyone will necessarily benefit.

Anyone who bought a home or business since the beginning of 2004 would have the values set at the actual purchase price. Lynne Weaver, who crafted the initiative, acknowledged it means those who bought at the top of the housing market would be paying higher taxes than their neighbors who have been there longer, even if the homes were identical.

She said, though, there’s nothing inherently unfair about that.

First, she argued, there is nothing fair about the current system, calling the valuations placed on homes by county assessors “random and arbitrary.” Beyond that, she said, it makes up for past inequities.

“Is it fair that I’m sitting here in my house and someone down the street decides to sell their house like mine . . . and some fool, somebody comes along and pays an astronomical amount for the house?” she asked. “Now everybody in the neighborhood is penalized with higher taxes because of that person’s decision.”
But, Weaver said, even those who bought their homes in 2006 and find their assessed values locked in at that level should want to support this measure. She said it provides them with predictability of what their taxes will be in future years, no matter what happens to the housing market.

That absolute limit on total taxes, if approved, creates a new problem for lawmakers.

Right now, each level of government, like cities, counties, fire districts, library districts and community colleges, gets to set its own tax rate and get its own resources.

This initiative would, in essence, turn all property tax proceeds over to the state. The Legislature would then decide who gets what.

“It couldn’t be any worse than it is now,” Weaver said.

The initiative, if approved, also would eliminate the option for voters to approve overrides, bond issues or exceptions to the tax limits even if they want additional spending, whether for schools or additional police protection.

Weaver said override elections often are abused and held on days when most people do not realize something is on the ballot.

Weaver tried to get the same measure on the 2008 ballot, only to fall short on signatures.

This time, however, Weaver said she is getting an earlier start on the July 1, 2010, deadline for submitting the necessary 230,047 signatures. Weaver said she also will have financial backing to hire paid circulators, though she declined to say at this point who has promised money.

One factor that may have kept Weaver’s measure off the 2008 ballot was that Arizonans were being asked at the same time to sign a competing initiative.
That one, crafted by Marc Goldstone, also would have reset property taxes to prior levels. But it would have allowed voters to decide if they wanted to tax themselves more for additional services like improved fire protection.

Goldstone said Friday he is hoping the Legislature puts a measure like his on the 2010 ballot, eliminating the need for him to get signatures. But Goldstone said if not, he will start his own petition drive.

Weaver’s proposal got its name because it is modeled in part on California’s Proposition 13. That 1978 initiative was the first of a series of voter-approved limits on government spending.

Weaver became a California resident in 1983, after that state’s Prop. 13 took effect, and said it worked well there. She moved to Arizona in 2001.