Foreclosed Residential Homes Drag Tucson Housing Market Down

by Donald Hanz on Foreclosures

The huge supplies of foreclosed residential homes are making their impact felt as sales and prices of homes in Tucson, Arizona continue to decline in October 2010 for the second consecutive month. The decline came after signs of industry stabilization were reported during the summer of the current year.

With Tucson foreclosures continuing to account for a considerable percentage of home supplies, prices of houses also continue to slide. According to a report from Tucson Association of Realtors Multiple Listing Service, the median price of homes was $140,000 for October, a rate that is 22% lower than year-ago prices.

When compared with September 2010, the price of newly built homes and Arizona foreclosures for sale in the city went down by around 4%. Meanwhile, Coldwell Banker Residential Brokerage also issued a housing report for October which also showed price declines, although at a lower percentage.

Based on Coldwell's data, median price of new houses and foreclosed residential homes was at $135,000 in October, representing a decline of 11.6% when compared with October 2009. Compared with September 2010, the decline is around 3.6%. According to housing analysts, the federal tax initiative has kept the prices of homes high during the early part of the year. Now that the tax credit has ended, prices are down again as buyers find less reason to make a residential purchase.

Sales of newly built dwellings and properties under foreclosed home listings also declined for October, with Tucson Association of Realtors reporting a 26% decrease in home sales for the month compared with the same period of 2009. October home sales totaled 752 based on the association's report.

In Coldwell's report, October residential sales had a total of 588, representing a 32% drop from October 2009 when total home sales reached 864. Both reports cited the presence of foreclosed properties as a factor pulling prices and sales figures down. Statewide, foreclosure rate is at one household per 165 housing units in October, making Arizona the third highest ranked state in the U.S. for the month in terms of foreclosure rates.

The high number of foreclosed residential homes in the state caused Arizona to be ranked third nationwide for the third consecutive month in terms of foreclosure levels. Over 16,000 households in the region received a filing for October.