Real estate slump? None exists for Tucson homes above $1M

Real estate slump? None exists for Tucson homes above $1M

Much of Tucson’s residential real estate market might be in the doldrums — but the view from the top looks just fine, according to local industry observers.

While overall home sales are down from 2006, luxury homes priced at $1 million or more are selling well this year, says a monthly report by housing market consultant John Strobeck.

There were 29 closings in June for homes priced at more than $1 million, according to The Southern Arizona Housing Market Letter, by Strobeck’s Bright Future Business Consultants. For the first six months of the year, closings in that price category numbered 117, putting Tucson on track to beat last year’s total of 218, Strobeck said.

The market is likely doing even better than the number of closings suggests because custom-built homes are not included in that tally, Strobeck’s report noted.

The rise in high-priced sales in a slow market “has been a real surprise,” Strobeck said.

One area experiencing a particularly strong flurry of activity is Saguaro Ranch, a luxury development on the Northwest Side that eventually will boast amenities including two restaurants, an organic farm, a performance theater, retail boutiques and an observatory.

The development sold out of all its improved 5-acre home sites within the past several weeks and is working on making more available, said sales director Dorothy Pinney. The lots range from about $1.5 million to $3.5 million, she said.

“We definitely are ahead of schedule with the recent activity,” Pinney said. “Right now we’re just waiting for the next phase to come on line. … We anticipate the sales to go pretty fast.”

Long Realty Co. agent Heidi Baldwin, who represented the buyers in a recent record-setting $4.95 million sale at Saguaro Ranch, said more high-end buyers from around the nation are showing interest in Tucson. The natural scenery and the peace and quiet often are the main draws, she said.

“I’ve been as busy as I’ve ever been in the big ‘slowdown,’ ” she said. “I’m not feeling it.”

Another factor is that rich buyers aren’t affected as much by many of the problems weighing down the rest of the industry, such as tighter lending standards, Baldwin said. Most of her clients pay in cash, she said.

Strong high-dollar sales have been driving up the average price in Tucson, while the median has either dipped or stayed flat, Strobeck said. The median price is the midpoint of all sales; half are above and half are below.

The median price for new homes in June was $241,650, down 8.1 percent from the same month in 2006, according to Strobeck’s report. For resale homes, the median stayed about even at $215,000.

But the average prices rose for both types of property — 3.4 percent to $291,673 for new homes, and 6.4 percent to $275,702 for resale homes, according to the report. The averages are more heavily influenced by extremes in sale prices.

The Tucson Association of Realtors also has reported a disparity between the median and average prices. In June, the association reported the median price for all homes rose about 1.8 percent, while the average jumped more than 9 percent.

Strobeck said the increase might be due partly to appreciation, which is driving more houses up to the million-dollar mark. But the rise might reflect the arrival of upscale developments in Tucson, including Saguaro Ranch and Dove Mountain.

“We’ve attracted some buyers that are in that million-dollar price range, because there are places that can suit their needs or desires,” he said.

● Send news about commercial and residential real estate to Christie Smythe, Business, Arizona Daily Star, P.O. Box 26807, Tucson, AZ 85726; fax to 573-4144; or e-mail to csmythe (at) azstarnet (dot) com

 

By Christie Smythe, Arizona Daily Star

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