Home prices in most Tucson-area markets closed out 2019 up again, with strong buyer demand continuing even amidst lower market inventory.
Pending sales, a good indicator of the market's direction, increased 21.4 percent for single-family homes in December. For the year, pending sales rose 6.8 percent, according to the Tucson Association of Realtors' monthly report.
Tepid seller activity in an unbalanced market led to lower-than-normal total sales, but sales still registered an increase of 14.6 percent for the month with a total of 1,067 sales closed. Sales for 2019 were up 4.5 percent overall from 2018.
The median sales price of a home in the Tucson market rose 12.3 percent to $252,750. Mortgage rates ended the year three-quarters of a percent lower than year-ago figures, helping offset rising prices and improve affordability.
New listings dropped 5.7 percent to 834 homes listed in December. That amounts to an inventory drop of 27 percent since December 2018. The months supply of inventory is down to 1.8 months, a decrease of 30.8 percent compared to 2.6 months in December 2018.
Six months of inventory is considered a balanced market in real estate, where neither the buyer nor seller has the advantage.
With falling inventory and increased buyer demand, it only makes sense days on the market for listings would drop. In December, listings averaged 38 days on the market, a decrease of 13.6 percent from year-ago figures. For the year, days on market were down 4.7 percent.
Buyer activity is expected to remain healthy in the coming year given low mortgage rates, low unemployment and wage growth.
Perhaps higher sales prices and greater percentage of list price received could entice more sellers to the market. On average, Tucson sellers received 98 percent of list price in 2019.