Posted by Jim Campbell on Sun, Jun 05, 2011 @ 11:10 PM
This week the Wall Street Journal published an article titled “Why it's Time to Buy” which discussed the multitude of reasons to buy a new home. Let me focus on just a few of these that impact Tucson specifically.
We are on the Bottom
Last year the government used tax credits and other tools to artificially prop up the housing market. This did indeed make things feel better…until they stopped doing it. What occurred was a drop in home sales, a drop in home prices and a drop in home building. So now there is nothing artificial propping up today’s market. What you see is the bottom with nothing but the blue skies above us.
Distressed Sales are Slowing
The houses bought during the boom with no money down and shaky credit have mostly been foreclosed and resold. Of course we still have distressed sales because this recession has been extremely tough on everyone but the bubble of foreclosures is behind us. In Tucson we now have less than nine months of distressed sale inventory.
Prices are about to go Up
The other impact of distressed sales is they hold pricing down. In Tucson we have recently had 50% of our home sales being distressed. As this percentage of distressed sales is reduced and more sales are market rate, the pricing of homes will naturally increase. In fact Case-Shiller is predicting that Tucson prices will rise by 7.2% next year. Why? Less distressed sales.
New Homes in Tucson Will Never be more Economical
New homebuilders have figured out how to compete with distressed sales by providing maximum value, ten year warranties and competitive pricing. Add that to the fact that mortgage interest rates are at 4.55%, which is near a 50 year low. This adds up to a scenario where the best possible new home deals will be in the next six months.
Simply stated, time to buy a new home in Tucson.
Posted by Jim Campbell on Mon, May 02, 2011 @ 12:04 PM
Historically the pricing of homes within an urban center have been more expensive than houses on the outskirts of a city for one simple reason; homebuilding costs. The fact is that building a home in the city is simply more expensive. From land costs to permitting to impact fees to construction…they are all higher within the urban core. The land and impact fees alone may add $40,000 to the price of a new home.
So homebuyers have had to choose between a more expensive (and more convenient) home in the City versus a cheaper house farther away. Hence the term “driving to qualify” as the farther you drove the cheaper the houses became. Examples of this are subdivisions in Red Rock, Star Valley and even Benson. Homes in these areas will in general be in the low 100’s rather than the 200’s for in city property.
But as they say times are a changing. 
Today and in the future it will be necessary to include transportation costs in the overall calculation of home costs. Not only will the mantra of location, location, location be for the general aesthetics of the neighborhood but also how far away the house is from the services and destinations you frequent. Let’s look at a quick comparison of living in Vail and comparing that to living in the city (for example; Mesquite Homes at Riverbend).
Assumptions
- $4 gasoline with a car obtaining 25 miles per gallon
- Working and playing in the middle of the City so averaging one daily trip.
Conclusions
- 30 miles of additional driving per day or 36 gallons of gas per month
- Extra gas expenditures of $144/month after taxes (36 x 4 x 12)
- Assuming a 33% tax rate monthly pretax expenditures for gas is $216.
- In today’s mortgage environment (5% interest) this $216 per month would be the same as paying the mortgage on an additional $40,000.
Based on the above simplified scenario the total out of pocket cost for a $160,000 house in Vail would be the same for a $200,000 home within Tucson’s city limits (including gas).
Location, location, location. Something to think about.
Posted by Zach Hinman on Fri, Apr 22, 2011 @ 06:22 PM
Spring in the Tucson Desert: A marvelous spectacle. The seemingly overnight explosion of neon green on the cottonwood is a personal favorite, as it’s a welcoming sign of blue skies, hummingbird nests, and the floral eruptions that unfold through the warmer months. A few weeks back I paced around my yard (a Mesquite Homes yard) and assessed the damage from The Great Freeze. Nearly every one of my newly planted succulents, cactus and shrubs looked all but lost. Patiently, I took to planting this year’s tomatoes, herbs, and flowers leaving nature to surprise me with the bulk; and boy did she! Some didn’t make it, but the majority passed Ol’ Darwin’s test.
The wildflower is underappreciated testament to desert survival that has always captured my respect. Each year the hot and dry months reduce the plant to a brittle brown carcass that crushes easily under the passing foot. And each year where their ancestors stood, without supplemental watering or soil work, the seeds having waited winter through push a new plant skyward.
When our landscape company asked me last week, “should we pull the weeds at the Mesquites at Riverbend and the Mesquites on Pantano” my green thumb nearly wilted. “Those are wildflowers!!!” I proclaimed in shock, only to get the candid reply… “they are indeed, but everyone else (other builders) have us pull them at first sight”. And then it occurred to me…this otherwise trivial exchange, to save or not to save this weed and the natural beauty it would soon bring our homeowners is the level of detail that we micro-manage on a daily basis at Mesquite Homes. It’s not that we lack focus or lives; the simple fact is that we are a small local builder, offering the agility to focus on what matters to you and what matters to us. Our size is our strength in this respect. It simply doesn’t stop after the sale, take it from me. We are here now, we’ll be here throughout the exciting process of building your home, and we’ll be here for you long after you turn the key….as your local home builder should be.
You cannot survive in the desert being average. We are different, I know.
Do you know how Mesquite Homes is different than the other Tucson Home Builders?
Posted by Jim Campbell on Tue, Apr 12, 2011 @ 11:17 PM
So I came to work and found out that my name was in the newspaper today. Not surprising but not something I expected either. You see we are in the process of planning a 700 bed student housing project in downtown Tucson called Plaza Centro. We should find out in the next week or so if the University of Arizona will partner with us on the project. Upon reading the article I found that the paper had given me my traditional Tucson title, “Developer Jim Campbell”.
So what is it about Tucson that if you foment the city’s development we find it necessary to brand these individuals with the Developer title? Personally I think it says much more about Tucson than it does me. After all I am a homebuilder in Tucson. So why not call me Homebuilder Jim Campbell? I believe I am a good guy so why not Good Guy Jim Campbell. I am also a father, son, brother, husband and friend. So the titles are really endless when it comes to Jim Campbell.
In regards to Tucson I believe we as a community are very aware of our own poor job at planning and fostering the proper growth of our community. Ask anyone about the special aspects of Tucson and what do you hear? The mountains, the canyons, the desert, the weather, the natural beauty…none of these have we created. Our accomplishments fall far short of what Tucson deserves. Simply, we have lacked flexibility from our government, creativity from our developers and acceptance from our neighborhood groups. The end result is beige houses in a sea of strip malls propagating urban sprawl. It is in this scenario where we blame the evil Developer for all our failings (and give them titles). But I am here to say we all own it. With more flexibility, creativity and acceptance we would be able to build a special Tucson. The City of Tucson needs to outline where growth should occur not just where it should not. Developers and Home Builders in Tucson need to build and develop properties that themselves would want to frequent or live in. And neighborhoods need to accept that we are a growing city and to have density along Speedway is better than empty storefronts.
As a community our mutual path forward should be one that questions the old way of doing business which would allow us to add to the beauty of the Sonoran Desert rather than subtract from it. After all we are all Developers of Tucson. And then, just maybe, I may get a new title.
Community Activist Jim Campbell
Posted by Jim Campbell on Sun, Apr 10, 2011 @ 06:16 PM
Probably once a week I am asked why we created another Tucson home builder in the middle of the current economic climate. I can't claim insanity but some of my friends may disagree. Simply there are two reasons which I can clearly state which forced me to make this jump.
First and foremost is the fact that when I moved back to Tucson I was saddened by the loss of Tucson's character. This can be seen by the national home builders bringing in house designs from wherever their headquarters were located whether it be Colorado, California or Florida. It is understandable a large corporation would want to leverage a previous house design to save costs but the true cost of this practice was the killing of Tucson's soul. So when I moved back home all I saw were bland beige boxes with pitched roofs that should of been built in Sacramento more than Tucson.
Secondly, I found the home builders in Tucson taking the path of least resistance. It is actually easier to build bland beige boxes on the far outskirts of Tucson than it is to build new homes with character within Tucson's city limits. If you are only looking at financial returns then the decision on what and where you build is easy. But for some of us Tucson is our home and always will be our home. We desire creativity and density in the city core and preservation of as much of the desert as possible. After all that is why we live here, isn't it?
So I found myself as a developer in 2009 not liking what the home builders wanted to build. I found them not willing to fight the City of Tucson bureaucracy. I found them using the poor economy as an excuse to build uglier houses with cheaper quality. And over a bottle of red wine at Kingfisher we decided enough was enough and Mesquite Homes was created. We would fight the bureaucracy, we would build in the City and we would create homes with personality and a company with spirit.
MESQUITE HOMES: 2940 North Swan Road, Suite 212 Tucson, Arizona 85712 Email info@mesquitehomesaz.com