I am amazed at the decline in prices at Heritage Highlands, which is an upscale active adult community located in Dove Mountain, not far where Tiger Williams played golf at The Gallery this past week. There are 96 houses listed for sale from $240,000 – $739,900. These homes are almost new and built by US Homes/Lennar. Many have golf course and mountain views and the community offers golf, pool, tennis, a fitness center, a club house with a restaurant. This is a community that is truly active: you will notice many people that are young and socializing or participating in their favorite activity. Six months ago you could not find a home here for less than $300,000 and prices were appreciating. Now there is a definite decline in prices. Of course, many people put their houses on the market since there was a national golf tournament with famous Tiger Woods playing. It seems the additional reason for the high inventory of homes and price decline is that there were many investors buying in here and now that they have found that the market has become a buyers’ market, they want to unload their houses. It makes for a great time for buyers to purchase with quite a good selection and probably the lowest price you will ever see here. There is a low HOA fee of only $144 a month. Dove Mountain which is the master community that Heritage Highlands is located in, has just finished a new shopping center on the corner of Tangerine and Dove Mountain which has a new grocery store and other shops to add to the convenience of living in this master planned community.
I was amazed to find spectacular large semi-custom homes with extraordinary views of the Pusch Ridge at this new development. They are priced from the mid $600s; homes comparable in the Foothills would be over a million. They have one great homesite left where they are taking back-up offers; the Buyer is having a hard time selling his house and therefore has less than a month left to sell it when it will be available to the next buyer. This one is priced at $745,000 and has the most fantastic views.
I was previewing homes for a client in LaPaloma yesterday and was totally amazed by the variety of gorgeous homes with incredible mountain views that were available for sale. LaPaloma is in the heart of the foothills, on a world class golf course and adjacent to the upscale Westin LaPaloma resort in the heart of the Foothills. There was even one patio home priced at $399,900 with amazing mountain views; it was only 1,434 sq feet but had a two car garage. Others I previewed were priced in the $400 and $500 thousands. I have never seen such variety and reasonably priced homes on the market there in the past three years. This gated community is one of the most-sought after communities for empty nesters and second home owners; the schools are amongst the best in Arizona so there are some families living there as well.
For loan closings in 2007, the mortgage insurance premium will be tax deductible if the household adjusted gross income is 100K or less. The deductibility decreases by 10% for every 1K in annual income that exceeds 100K. This means that household incomes greater than 109K receive zero PMI deductibility. Congress is supposed to evaluate the law at the end of the year for a possible extension. This will compete with the popular way to avoid mortgage insurance by piggy-backing with a double loan–one with 80% loan -to -value and a second loan to cover the remaining 20%. This also means the second mortgage will usually will be at a higher rate. If you qualify for this program, have your lender check both ways to see which one gives you a lower monthly payment.
The prime Foothills zip codes of 85718 and 85750 with homes priced 325K-500K appreciated 8% last year. However, there were 59% less number of sales and the average days on the market increased from 34 days to 43 days. Also average list price to final sales price became 97.50% versus 99.09% in 2005. I predict that the appreciation will continue in 2007 and the number of sales will increase as Sellers have become more realistic in the pricing of their houses for sale and buyers are feeling a sense of market stabilization. Last year many Buyers feared if they purchased a home at that time, the properties could later depreciate; this feeling is much dissipated this year. In January, showings on listings have increased from last Fall and open houses are much better attended. As interest rates go up, buyers also feel urgency not to wait any longer to purchase for fear the interest rates will continue to go up.
While the number of sales decreased by 30%, the Foothills houses priced between $500,000 and 1 million continued to appreciate. The 2006 cost per square foot in the 85750 zip code showed a 6% increase and the 85718 zip code showed a 8% increase over 2005. The other surprising statistics were that it only took an average of 52 days in 2006 versus 44 days in 2005 to sell a house in the 85750 zip code, and it only took an average of 49 days in 2006 versus 45 days in 2005 to sell a house in the 85718 zip code; revealing almost no change. If your looking at making the best investment decision, purchasing in the Foothills proves to be the best place to invest in Pima County.
Oro Valley only saw 14 homes sell over 1 million dollars in 2006; in 2005 there were 18 homes that sold over one million. The highest priced homes for both years were found in Honey Bee Ridge for the 85737 zip code; the highest prices were $1,950,000 for 2005 and $1,562,500 for 2006. In 2006 the 85755 zip code had an incredible $4,200,000 sale at LaCholla Air Park; this property was on over 16 acres and the new owner can fly to the homesite. In 2005 the 85755 zip code saw the highest sale come from Stone Canyon III at $1,443,915. The 85737 zip code really stayed pretty level as far as the average dollar per square foot goes from 2005 – 2006; however, the 85755 zip code saw approximately a 6% increase in the average dollar per square foot. The over 4 million dollar sale skewed the figures upward and it is probably safe to say that Oro Valley luxury homes just held their own as far as the final sales price is concerned from 2005 – 2006.
Interestingly enough, houses over a million fared the best last year. In fact the number of sales increased and these high-end houses appreciated! The two prime Foothills zip codes –85718 and 85750– proved to be the best investments. Houses over a million in the 85718 zip code had a 18% increase in number of sales and the 85750 zip code had a 40% increase in the number of sales. The average cost per square foot went up 9% in the 85718 zip code and went up 6% in the 85750 zip code. The average days on the market were a little longer, but really only went up to a little over 3 months, and this is not a long time when selling a high end home compared to the past. Without a doubt, many people made huge gains in only a few years time and this appreciation is expected to continue in 2007. In 2006 the highest price house in the 85718 zip code was located in Pima Canyon and it sold for $3,100,000; the year before Pima Canyon also had the highest price house and it was even higher, at $3,600.00. In 2006 the highest price house in the 85750 zip code was located in Ventana Canyon and it sold for $2,950,000; the highest price house in 2005 was located at Rattlesnake Canyon Estates and it was priced at $3,650,000–it has a remarkable 49.12 acre homesite.
I started this blog in January 2007 to give my sphere of influence up -to -date information on the Tucson and Oro Valley luxury real estate market from my perspective. Please feel free to write to me with any of your questions, comments or observations. I look forward to this new adventure and hope we can learn a lot from one another!