There are several reasons the Tucson luxury homes market is struggling. One is the very tough appraisal standards. In more than a few cases, appraisers are low-balling appraisals since lenders have moved to the conservative, and very cautious extreme. The new appraisal standards make it very hard to overturn these appraisals. More than a few sales have been lost this way. Interestingly enough, the typical way around this is to change lenders, so a new appraisal is ordered which probably will come up with a higher value if it is justified. However, one will have lost the $600 or more for the appraisal and wasted time processing the first loan.
Another recent problem is that most foreclosures have been stopped thoughout the nation. Although there are not many foreclosures in the Tucson Catalina Foothills area, any stalling further assures less sales.
Of course the main reason for the stagnation is that buyers are very cautious and many are afraid the bottom has not been seen. Certainly there has been no appreciation and there has been about 10% depreciation in the past year. There still are many Sellers who list their homes at yesteryear’s prices, so buyers and their agents have to sift through as many as half the inventory that is clearly over-priced.
A real positive note is that interest rates are at an all time low and jumbo financing is much easier to obtain than it has been in the past few years. Also there are some fantastic bargains out there: when those houses come on the market they sell very quickly. It is very important to have an excellent real estate agent looking out for your interests. If buyers are diligent, they will find the perfect home at a bargain price, with a fantastically low interest rate. Opportunity is knocking!