Whether you’re a home buyer or home seller, it’s a feast or famine market in Tucson for real estate agents and their clients, according to broker John Powell, who with his wife Maria, own Help-U-Sell Galleria Realty, 8245 N. Silverbell Rd.
Based on daily interactions with home buyers, Powell’s opinion is that the market is making a comeback. He deals daily with buyers of all ages who are purchasing homes at reduced prices. He noted that interest rates on houses are now below four percent.
“It’s a great market for buyers,” he said. “Interest rates are at the lowest I’ve ever seen for buyers. A buyer can buy a house at less than fifty percent than he could five or six years ago.”
Powell pointed out that investors are back in the market in droves.
“Real estate looks good to them in comparison with the stock market. Investors have eaten up the inventory because the values have dropped so much. This is in combination with the fact that banks are holding back on putting new properties on the market,” Powell said.
However, there is a dark side to this “equation,” as Powell calls it.
“If you’re a seller, it’s a rough time. Sellers are hurting. Many sellers have lost 50 percent of the equity in their homes,” he said. “Fifty percent of all the sales in Tucson are either short sales or foreclosures.”
This means that people are selling their houses for less than the amount owed through short sales or they are giving their houses back to the bank through foreclosures.
Powell works with retirees who drained their savings in 2005 and 2006 to buy a house and now they’re “upside down,” since their houses are no longer worth what they bought them for. He noted that these are homeowners who never missed a payment and are now looking at doing a short sale.
As trained, experienced specialists in conducting short sales, he and Maria are in a position to offer sound financial counsel to clients coming to terms with such losses. They often do business with young professionals or couples with kids, who don’t qualify for either a loan modification or for a deed in lieu, whereby they can give their house back to the bank. Therefore these clients choose a short sale to avoid foreclosure.
Often Powell must be frank with half of his clients in letting them know that, in his view, their best interest lies with a short sale. Where feasible, he encourages a short sale over a foreclosure since the penalty for the former is less lengthy than that for the latter. Anyone who takes a short sale must wait two to three years before being permitted to buy a house. If a bank forecloses on one’s property, it takes up to seven years to get back into the housing market.
Yet there is a silver lining for sellers down on their luck. The turnover time for selling a house is relatively quick. Powell mentioned that it takes sixty to ninety days to sell a house. He said that the basic sales price for a home today in Tucson is $150,000.
Help-U-Sell customers are charged a set fee of $3,950 for selling a home, except luxury homes, which take longer to sell.
Powell said that banks and real estate firms currently charge six percent commission on any sale. He claimed that unlike banks and real estate agencies, Help-U-Sell customers pay only those directly involved in the sale.