Tucson Real Estate 2009 Snapshot

Tucson Real Estate 2009 Snapshot

2009 was a turbulent year for Tucson Real Estate, but we’re heading in the right direction. The Tucson residential housing market is showing general signs of improvement across major statistical indicators. Home sales have shown a 54.59% year over year increase from November 2008 to November 2009. Although the average sales price is down year over year from 2008 to 2009 by 12.45%, sales prices tend to follow sales volume. As volume increases, so does the average price. It’s the law of supply and demand. Especially since there aren’t many developers starting new projects these days, all of those condos and homes we heard about being new and vacant will be absorbed. People love the fun and sun of Tucson after all, they will still move here and the population will increase faster than most other regions. The Tucson Real Estate market will benefit from these demographic shifts. The Tucson Commercial Real Estate Market will likely take a little longer to recover. The commercial cycle generally lags behind the residential cycle by about twelve months. Decreased consumer spending in times of economic difficulty lead to retailers having difficulty as sales decline. Decreased retail volume leads to less demand for warehouse, storage and industrial space. These factors lead to decreased revenue for commercial property owners. As consumer spending increases again, the cycle reverses. Income to commercial landlords increases, and property values go up accordingly. Taking a look at the multifamily apartment market, average rental rates for one bedroom apartments were down 3.63%, to $547. The average rental rate for a two bedroom apartment remained flat, fluctuating less than one percent and hovering at about $750. Expect prices to climb in double digits next year and continue growing solidly for years to come as Baby Boomer couples retire and look to move away from their currently frigid locales to sunny Tucson. Two bedroom configurations are in high demand with retirees, as it gives them the flexibility of a second bedroom that is easily convertible to a den or home office. Developers will doubtless seize this opportunity to add some specialized communities, creating jobs and spurring consumer spending and helping to drive new economic growth for Tucson and Tucson Real Estate. All said, 2009 was an encouraging year with some positive signs of recovery and 2010 promises to be an exciting year for Tucson Real Estate!