August is an exciting time to be a Tucsonan! We have crazy monsoon storms, our kids are going back to school, and, most exciting of all, we get to find out what happened in the real estate market in July!
In July, the average price for a single family home in Tucson and the surrounding areas was a whopping $422,369. If you’re keeping track, that’s $4,127 more than the previous month. That’s right, homeowners are making about $4k a month on average (sometimes tax free!) just to own their homes! If that’s not an argument for home ownership, I don’t know what is.
While home prices are still on the rise, the market is definitely changing and buyers and sellers are starting to feel it. The average days for a home to be on the market before going under contract is 21 days, a day longer than the month before. The median days on market also increased from 6 to 7. The market is still strong for sellers but it’s starting to cool down. In July, compared to its high in May, the average sales price as a percent of the list price went down from 100.7% to 100.4%. That translates to about $1,267 in today’s prices. What that doesn’t take into account is the fact that sellers are lowering their prices at a much higher rate than even a month ago. This past week there were 614 price changes versus 422 the week leading up to July 4th, so while they are still mostly getting above the current list price, it may have been lower than what they had hoped for when they first put the house on the market.
The months of available inventory is also changing. Months of inventory means that if we hit pause on the real estate market and waited for just the current active buyers to buy up the current active listings, that’s how long it would take. This past month that number increased to 1.3. It had been lingering at 1.1 since June, 2021 and slowly creeping back up recently. This means it would take about 6 more days for all the homes to be sold. So, is there more inventory or are buyers finally over it? It might be a little of both. Interest rates have certainly played a role in how motivated buyers are right now. Add in uncertainty about the economy and many people who have been thinking of buying are now on the fence. There are also a few more homes to look at. 1,913 homes in July, 74 more than in June. That would keep anyone busy!
People are always asking me “what’s going on in the market”. And it’s always a hard answer. I think this market shift is a much needed move towards a more balanced market. Yes, it was fun to be a seller these past couple of years and wait for people to offer up their firstborn child and a peloton just to get their offer considered. But while the days of writing a love letter to the sellers of a house might soon be behind us, I personally am looking forward to a less stressful, more enjoyable experience for buyers and sellers in the near future!