The Tucson real estate market, barring any world economic setbacks or disasters, will continue its current boom, said CEO of Tucson Association of REALTORS Randy Rogers at the 2021 Greater Oro Valley Economic Outlook on Thursday, March 4.
“We’re in Southern Arizona and the real estate market is hot,” Rogers said.
The median price on homes has increased, while their average days on the market have decreased.
The average price on homes is $70,000 higher than last year, said Rogers, while it takes less than a month to sell a home after placing it on the market.
Rogers said that while low interest rates and Tucson’s warm climate in comparison to other places around the nation have contributed to the hot housing market, the most striking element is low inventory.
“When you don’t have inventory there’s not much you can do,” Rogers said.
Those people who were unable to buy homes can now afford a home with low interest rates, and if they had a home before, they are able to gain some value and upgrade to another home.
During the pandemic, sellers should look at where they are in their “life cycle” and buyers should look at affordability.
Rogers said it’s a great time to sell, if homeowners are willing to sell and face the challenge of renting before buying their next home.
“You’re willing to spend a year traveling around the country in an Airstream?” asked Rogers. “Go for it. Put your house on the market. It’s a great time to do it.”
As for buyers, Rogers said be prepared to offer over and above the asking price, maybe several thousand dollars above, while also making an “as is” offer without concessions.
“Maybe some things that you would like to ask for. ‘Oh I’d like them to upgrade the kitchen or appliance or tear out the carpeting,’” Rogers said. “They won’t have to do that because there’ll be another offer waiting right behind that one.”
While the business is cyclical, Rogers believes we may not see the huge ups and downs of years past.
The market may not see much change for the next three to six months, as economists predict interest rates will not rise on a national level, but in one to two years, with a return to “normalcy,” Tucson could see some changes.
With an ease of restrictions, changing school systems and jobs coming back, people who otherwise would not move during the pandemic may move, Rogers said.
However, he continues to affirm the need between cooperation of businesses and local elected officials to address the problem of affordability, with median home prices rising dramatically in a 12-month period.
“How does somebody afford a home in our community?” asked Rogers.” That’s not a builder taking it on. It’s not just the elected officials. It is a joint process and it’s a real problem.”
Challenges to Builders
With the onset of the pandemic, home builders have faced a shortage of material, labor challenges, and a slow down to the start of building, said Anjela Salyer, vice president and division manager of Mattamy Homes.
“We just can’t move to get a start as quickly as we could before,” said Salyer. “Due to a backlog in the municipalities, workforce. We don’t have the labor to get as many starts in the ground.”
Despite the difficulties brought on by the pandemic, Salyer hopes this will bring about change in a business prone to stagnation.
“I think the biggest opportunity that comes out of this is all of the many pieces and people and entities involved in homebuilding need to work in partnership better and more cohesively,” said Salyer. “So ultimately the end user, our consumer who we’re all working for, gets the product and the experience that they’re looking for.”
The partnerships between communities, business, and local leaders have Paul Melcher, director of Community and Economic Development with the Town of Oro Valley, excited about the future town’s growth, as the staff looks at job creation, strengthening retail and housing options.
With a year and a half after the passing of the Comprehensive Economic Development Strategy, Melcher said they created a good foundation for the success of job creation, through their 30-60-90 day strategy.
They created a 30-day strategy to continue to help businesses during the pandemic.
“We really wanted to focus on the continuing support of businesses to the pandemic with OV Safe Steps in the town and also with our most recent grants with hardship cases,” said Melcher, who is barely two months into his post. “We wanted to make sure that those elements were still in place as the business community continues to deal with those negative impacts from the pandemic.”
The 60-day strategy focuses on promoting business retention and expansion in recruitment, while the 90 days were designed to coalesce partnerships to make sure they are on the same page, said Melcher.
“We’ve done that specific outreach to the businesses to make sure that we understand what their needs are in addressing pandemic, related downturns in the economy as the community comes out of the pandemic,” Melcher said “We want to ensure that the town understands what it can do to support businesses as they recover.”
Businesses can go to https://ovsafesteps.com/ to see if they qualify for reimbursement of pandemic related expenses. The deadline to submit is April 1.
ADOT Oracle Road 10-mile Project
The Arizona Department of Transportation will undertake a 10-mile long project on Oracle that will start on the south at I-10 and Miracle Mile to the north at Calle Concordia.
Brandon Construction submitted a bid of $34 million to begin their contract on Friday, Feb. 19, said Doug Moseke, assistant district engineer for Southcentral District at ADOT.
He expects people will start seeing the project start in April, with a 750-day contract, putting completion of the project in March 2023.
The project design focused on traffic maintenance and issues with drainage.
They plan on adding street lighting from River Road up to Ina Road, as well as curb gutters and sidewalk from River Road up to Magee Road, and bus pullouts for the safety of both pedestrians and bus users as well to help traffic flow, said Daniel Casmer, senior resident engineer for ADOT’s Southcentral District at ADOT.
In April, ADOT will be mailing out 14,000 informational postcards to residents within a quarter of a mile of the project, said Joanna Bradley, community relations project manager for ADOT’s Southcentral district.
To receive updates on the project go to https://azdot.gov/ and click on “Subscribe for updates” in red on the top left and select SR-77.