Tucson Is Ranked No. 1 For Housing Investors
Article by Dale Quinn, Source: Arizona Daily Star
Tucson is the best market for real estate investors, an online real estate company says. The Old Pueblo, where home prices have tumbled to levels not seen since the early 2000s, topped Realtor.com’s top 10 list of investment towns. Realtor.com tracks data in 146 major metropolitan markets.
Homes in Tucson Selling Faster than a Year Ago
With prices in Tucson having fallen so hard since the burst of the housing bubble and inventory dwindling, investors have grown eager to jump in the market, said Jennifer DuBois, a Realtor.com spokeswoman.
“Foreclosure opportunities seem to be decreasing and people are sensing now’s the time to get in,” DuBois said.
Homes are selling faster in Tucson than they were a year ago, DuBois said. And even though sale prices are lower than they were then, sellers are generally asking for higher prices when they list their property on Realtor.com, DuBois said.
In Tucson, investor activity has picked up over the past year, agrees Justin Bentley, an agent with Tierra Antigua Realty. Bentley, who himself purchases and flips houses, said he’s seen in-state and out-of-state buyers. Even contractors whose business has slowed because of the decline in new-home construction have gotten into the game, he said.
In 2011, nearly 6,400 homes in Pima County were sold for less than $100,000, which is more than 35 percent of the 18,000 homes sold last year, according to an Arizona Daily Star analysis.
Prices that low are ripe for investors with cash on hand who are either looking to fix up a house for a quick sale, rent it out or hold onto it until prices come back.
And while values have dropped and investors are swooping in to pick up deals, the presence of such buyers indicates they have confidence housing prices in Tucson will eventually rebound, Bentley said.
He and some other investors recently purchased a house near East Golf Links and South Kolb roads. The bank-owned property was listed at $37,700, but because competition for foreclosures is increasing, Bentley said he paid $54,000 for it. “I knew we had to be aggressive,” he said.
The house had some fire damage and it took about $30,000 to spruce it up. Now, Bentley said he plans to put the red-brick home on the market for $119,000.
Alan Murdock, another Tierra Antigua agent who’s also an investor, said even though housing prices have dropped significantly, rent prices haven’t plunged as much.
Murdock said he purchased a duplex for $100,000 that a previous buyer paid $290,000 for. By putting a mortgage on that property, he could use the money to purchase other houses, and collect rent to pay down the debt.
Some investors have worried about getting into the market, fearing banks might unleash a backlog of foreclosed properties and further drive down prices.
But so far, that hasn’t happened, Murdock said. Now investors who may have been waiting are starting to get into the market.
“There’s a broader level of buyers that have confidence right now,” Murdock said.
Top 10 Realtor.com’s top investment towns:
1. Tucson
2. Austin, Texas
3. Kansas City, Mo.
4. Baltimore
6. Salt Lake City
7. San Jose, Calif.
8. Raleigh, N.C.
9. Milwaukee
10. St. Louis
