Front and center in the news of the economic turmoil facing the housing industry are foreclosures. In the Tucson region, the number of foreclosures so far this year are equavelent to about half the total number of new homes that will be sold this year, according to consultant John Strobeck, of Bright Future Business Consultants.

Foreclosures have been accounting for an increasing number of sales. This year, he said it’s up to 16 percent. Last year it was 2 percent and in 2006 it was just 1 percent, Strobeck said.

By his records, more than 1,800 homes locally have been sold by financial institutions so far this year.

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“Just think what an extra 1,800 homes would have done for the new construction market in 2008,” Strobeck said.

Foreclosure sales are not only taking from new home sales, they are having a major impact on pricing. The median price of resale homes in November was $170,000. Without foreclosure sales, the median price would have been almost 6 percent higher, at $180,100. And that, Strobeck said would also have more easily justified the $201,035 median sales price for new construction homes.

“But, here is the real staggering figure: The median price of foreclosure sales was $147,750,” he said. “Foreclosures sales are pulling down home values more than any other factor. We are going to have to get through this foreclosure mess before the market can return.”

Some other low-point statistics from Strobeck’s November report:

• 110 permits were issued, the lowest number since January 1990.

• Median and average prices for new and resale homes all hit 23-month lows.

• There are about 8,000 resale housing units on the market, representing more than an 8-month supply and about twice what’s desirable. A positive sign is that “non-serious” buyers have taken their homes off the market, giving a truer picture of inventory status.

• Home building’s economic contribution to the economy will be about $900 million this year, a $1.3 billion drop in the past two years.

“Unfortunately, I see no fix to this problem except to let the market play out,” Strobeck said. “Until we get through this foreclosure mess, the market cannot return to what is considered normal. I am not sure we will ever get back to ‘normal’ or if we know what ‘normal’ is.”

New office suites fill

niche requirements

Tucson Realty & Trust Co. opened Wilmot Corporate Executive Suites, 333 N. Wilmot Road, to fill a need for affordable office space.

More than 30 furnished and non-furnished suites from ranging in size from 100 to 1,500 square feet are available in the National Bank Plaza. Monthly rent starts in the $400s and include high-speed TI Internet, kitchen facilities and parking.

According to Hank Amos, CEO of Tucson Realty & Trust Co., tenants can expect to save from $3,000 to $5,000 monthly, depending on their circumstances.

“The national economic upheaval caused some businesses to reduce their office space requirements, based on feedback we received from the regional business community,” said Amos. “Wilmot Corporate Executive Suites offers companies a prime location at the right price and with flexible lease terms, whether they are small start-up organizations or larger businesses looking to expand into the Tucson market.”

On-site administrative staff is available, as is meeting space.

“We want to encourage more businesses to work affordably inside Southern Arizona and take full advantage of our business landscape,” said Amos. “Our suites can be a cost-effective way to spend more time focusing on net income, rather than having excessive fixed expenses, while working at a premiere address.”

Information about Wilmot Corporate Executive Suites is online at www.wilmotcorp.com, or call Theresa Amos at (520) 618-5400.

Foothills apartment complex

sells for $18.4 million

HSL Properties, 3901 E. Broadway, purchased Skyline Gateway apartments for $18.4 million from Chicago-based Equity Residential.

“We are doing very well right now,” said HSL Owner Humberto Lopez. “I anticipated this downturn several years ago and sold several thousand units in 2005 and we prepared ourselves. We didn’t think it would be this big, but right now we are able to take advantage of some of the opportunities out there and build our apartment portfolio. We are up to about 8,000 apartments now.”

HSL Properties paid slightly more than $4.5 million down toward the purchase of the 246-unit complex at 4601 E. Skyline Drive. It was built in 1985 and contains 14 three-story buildings of one- and two-bedroom units renting from $595 to $799 per month.

Worth noting

• E-Konomy Pools purchased an industrial complex of four buildings on about 3.5 acres zoned I-1 at 5969 and 6005 S. Belvedere Ave. The sellers were John and Marsha Dyer. The purchase price was just over $1.3 million. Chuck Corriere of Long Realty Commercial represented the sellers and the buyers.

• Spirits Child signed a lease for 2,800 square feet at Marana Marketplace,  Orange Grove and Thornydale roads. The center is currently under construction and will be anchored by Sunflower Farmers’ Market. Dave Hammack of Volk Company represented the tenant.