“All children are artists. The problem is how to remain an artist once he grows up.” - Pablo Picasso.”
GreenTucson May, 2018
There are so many things to do in our fair city:
Grab a blanket and head to Reid Park's DeMeester Performance Center for the Tucson Pops Spring Concer series. Catch a free concert under the stars on May 20, and 27!
Tucson Petting Zoo $8 gets you food for all the animals and a full tour.
Willcox Wine Festival May 19 & 20, 2018, 11-5pm
Many of you know that my husband, Richard, is on loan from the University of Arizona to the National Science Foundation to be their Director of the Astronomy Division. When he’s in Tucson, we spend many evenings at our favorite restaurants catching up with friends or moving forward with business. The culinary highlight from his last visit was the consistently excellent Kingfisher. The specials were exquisite, especially my lenguado, sautéed and served with both smoky cream sauce and sweet and sour fruit sauce. The server was happy to accommodate my request for extra sauce; the smoky cream was amazing!
For our Tucson economic update, we note that TAA and Sun Corridor Inc. have a new partnership. Sun Corridor Inc. reports, “…Tucson International Airport (TUS) and Ryan Airfield (RYN) provide $7.4 billion annually to the economy of southern Arizona, supporting more than 43,000 jobs with an average wage of $81,731, according to an economic impact study by Elliott D. Pollack and Company.” AZ Central reports, “Raytheon Missile Systems unveiled the first phase of a $550 million expansion to its Tucson facilities… Tucson-based Raytheon missile factory's impact on Arizona economy estimated at $2.1 billion annually... It now has about 12,000 workers in Tucson.”
U.S. inflation exceeded 2% and unemployment dropped to 3.9 %. The Labor Department reported that the April Consumer Price Index (the monthly measure for U.S. prices for most household goods and services) rose 2.5 % from 12 months ago. Wage growth has improved and the Fed considers ongoing rate hikes. I don’t see current indication of the economy overheating. Hopefully, the economy is stable enough that the Feds will not need to raise interest rates making home loans are less affordable. With all due respect to the Federal Reserve, ‘if it ain’t broke’…?
The Federal Reserve reported that in the first quarter of 2018, student loan debt exceeded $1.5 trillion. The cost of higher education has grown disproportionately compared to growth in American wages. When our boys were at Harvard and the University of Chicago (almost twenty years ago) it was merely $35K a year tuition room and board. We were able, with two incomes and postponing purchases (like a proper bedroom set), to put our guys through and they graduated debt free. Times have gotten tougher for a lot of people. Now, many young people with student loan debt might not be able to make salaries allowing them to work in their chosen profession. Home affordability is negatively affecting the largest pool of buyers, millennials. MSN.com sees the impact on the housing market: “Individuals under 30 are less likely to buy a house because they are still bogged down by student loan debt, making them either unable or unwilling to take on a mortgage. This is causing issues in the housing market, which is still recovering from the recession.”
The CPA firm BeachFleischman offers an interesting article, The Tax Cuts and Jobs Act (TCJA) changes the rules for deducting interest on home loans, illustrating which “homeowners will be adversely affected by the TCJA provision that generally disallows interest deductions for home equity loans for 2018 through 2025.”
Here’s a snapshot of the market comparing April 2018 to April 2017:
For the Tucson North area, the active inventory was down 16%, and the number of Closed Sales of 164 represented a 1% decrease. Months of Inventory was 2.8. The Median price of sold homes was $327,000 for the month of April 2018. The Central area saw inventory decrease 11%, a Median Sales Price increase of 24% and 4% fewer closings compared to April 2017. Of course, I am your resource for the specifics for your area of town; I love talking Tucson real estate!