Housing starts stayed strong through March in the Tucson area as builders pushed to take advantage of the first-time home-buyers tax credit before it expires.
Builders took out 243 permits in March - up from 155 the same month last year - bringing the year-to-date total to 663, says the latest monthly housing report by local business consultant John L. Strobeck.
That means more new homes are going up compared with last year, Strobeck said. But the pace is far slower than it was during the housing boom.
By taking out permits in March, builders will have enough time to complete the home by the tax-credit deadline of June 30 for closing the sale, Strobeck said. Buyers must have entered into a binding sales contract and opened escrow by April 30 to be eligible for the tax credit.
Once that tax credit goes away, Strobeck said, he anticipates housing starts will again drop off.
Median price at a low
Meantime, the median price of a home is the lowest it's been since January 2004, Strobeck's report says. The median price is the point where half of homes sold for more and half sold for less.
"Builders are trying to meet the competition of resale and foreclosure homes so they're pushing their prices way down," Strobeck said.
Foreclosures will continue to be a problem, says his report. Homeowners who bought in 2005 who had "interest only" mortgages will see their rates reset in 2010. Those loans were viable only if property values continued to rise, which they didn't, so homeowners will see their monthly payments increasing, leading to more financially distressed properties, Strobeck said.
"This verifies my concern that we are just at the height of the foreclosure problem and will not be out of the situation until 2013," Strobeck said.
On StarNet: Search a database of homes sold in the Tucson area and see what houses are selling for at go.azstarnet.com/homes
Contact reporter Dale Quinn at 573-4197 or firstname.lastname@example.org