Oh the weather outside is frightful…Well, somewhere else, but this is Tucson, where people come to escape the doldrums of cold winter weather. It’s hard to beat the mild temperatures and the beautiful scenery we have in The Old Pueblo. Many people come to Tucson to grab their own little piece of Sunbelt paradise.
Winter drives the increase in demand for property and houses in Tucson from locals as well as our visiting snowbirds. So how is the Tucson real estate market trending? At the National Association of Realtors Annual Conference in San Francisco, chief economist Lawrence Yun singled out Tucson as a ’market to watch’ next year, according to The Tucson Association of Realtors November Scorecard Report.
As always, uncertainty drives consumer sentiment in the housing market. Jobs are key to continuing the growing trends in house sales. Cities with lower unemployment can expect better housing market recoveries in 2014. The Bureau of Labor Statistics reports Tucson’s October unemployment rate to be 6.9 percent, an improvement over September’s 7.2 percent. These statistics match or beat the national unemployment rate of 7 percent in November, 7.3 percent in October and 7.2 percent for September.
Distressed inventory is drying up so sellers are looking at the best profits in years.
“October sales were nearing a normal level, considering facts like employment, mortgage rates, and household income. While modest or even flat year-over-year sales figures will likely continue through year’s end, sale prices will likely continue to go up (nationally) because of tight inventories,” according to Steve Murray, editor of Real Trends.
Lending standards are also projected to loosen next year due to lower numbers of cash purchasers and higher profits for lenders.
“Since so many homeowners refinanced in recent years, Yun predicted that refinancing ‘will collapse in 2014’ to their lowest in 15 years. ‘I would say the collapse is good news for potential home sellers. Bank profits have been very high because of refinancing,’ Yun said. Due to the change, ‘banks will make more money on purchases and that should open up lending,’” The TAR November Scorecard said.
“2014 is going to be another monumental year of mortgage regulation. The two main focuses are Qualified Mortgages and the Ability to Repay, commonly known as QMATR. These changes focus on conventional mortgages regulated by Fannie Mae” states Ian Brannon, Nova Home loans. “…debt-to-Income restrictions will be 43 percent. Interest-only mortgages will be a thing of the past.”
Now might be the time to purchase. Things to ponder when making your decision: In most cases, it’s cheaper to buy than to rent; Home prices are relatively low; there is less competition from home flippers; you are investing in your future.
Plan to win with a few easy steps. Having purchased homes several times, here are the questions I wish I had asked before making my first purchase: How much can I afford? What is my down payment? How do I qualify for a loan? What are my closing costs? Fortunately professionals can help guide us smoothly through this process.
Save yourself the disappointment of not being able to afford the home of your dreams by getting pre-qualified for your loan before you start house hunting. Ask your lender “How much house can I realistically afford, and what is the monthly payment breakdown of principal, taxes and other fees?” The pre-approved amount will help you create a realistic budget for your home search.
Think long term. When purchasing your house consider the neighborhood and how easy the house may be to resell in 5 years. You want to make sure you’re investing in a home that will offer you a good return on your investment and resale value.
Cindy Wilson is a Realtor with Tierra Antigua specializing in Northwest Tucson, Oro Valley and Marana. She is a member of the Greater Tucson Chapter of the National Association of Women Business Owners whose members contribute this monthly column. You can receive Cindy Wilson’s monthly newsletter by contacting her at CindyWilsonRealEstate@gmail.com