Tucson home prices flatten in 2014

The average sale price for listed homes in December was $205,015, up nine-tenths of a percent from November and 1.3 percent higher than in December 2013, the Realtors said.

The median sale price — a measure that lessens the skewing effect of very high and very low sales prices — was $165,000, unchanged from November and 4.5 percent higher than in December 2013.

The 2014 increase came after the median price rose 7 percent in 2013 and 23 percent in 2012.

The Tucson Realtors group attributed the slowing price gains to weak job growth and a higher inventory of homes, but sees better days ahead.

“Although price growth flattened out, most of the local housing and economic factors are fundamentally better. That leads us to believe that 2015 will be a year of stability, enabling our housing market to continue to progress,” said Tucson Association of Realtors President Nicole Brule-Fisher.

The number of home sales in December rose to 1,076, up 17 percent from November and 3.7 percent ahead of December 2013. But for all of 2014, the number of sales fell 5.4 percent, to 13,184.

The value of home sales totaled $220 million in December, up 16 percent from November and 5 percent higher than December 2013. The total value of listed home sales in 2014 was about $2.68 billion, essentially flat from 2013.

University of Arizona economist George Hammond said Tucson lost jobs in construction and manufacturing in 2014, while slow population growth and household income gains dampened home sales.

“Construction continues to be the missing link in the recovery, with employment running at levels last seen in the mid-1990s,” said Hammond, director of the Economic and Business Research Center at the UA’s Eller College of Management.

Meanwhile, building permits for new homes got a boost from an inadvertent suspension of impact fees charged to homebuilders. The city of Tucson was forced to stop collecting the fees on Aug. 1 after failing to meet the deadline for adopting a state-mandated update on how it charges and spends the money. New fees were adopted and the hiatus on collections ended Dec. 22.

Homebuilders took advantage, pulling 357 or nearly three times the normal number of permits during the suspension period, said local real-estate analyst Ginger Kneup, owner of Sahuarita-based Bright Future Real Estate Research.

That helped boost the number of 2014 permits in the greater Tucson market to 2,284, up 34 or 1.5 percent from 2013. Kneup is forecasting that homebuilders will pull 2,350 permits in 2015.

The flurry of permits shows that impact fees are a “huge cost” to developers, and though the fee hiatus cost the city millions of dollars it may have nudged some homebuilders into action on some planned projects that otherwise would remain stalled, Kneup said.

“In the big picture, it was a stimulus that we needed,” she said.