Tucson Housing Market: Prices, Trends, Forecast 2023

In March 2023, the Tucson housing market saw a significant drop in new listings for both single-family homes and townhouse/condos. New listings decreased by 22.4% and 24.2%, respectively. Additionally, pending sales also dropped, with a decrease of 8.5% for single-family homes and 1.8% for townhouse/condos, according to the Tucson Association of REALTORS

However, inventory increased significantly, with a 53.5% increase in inventory for single-family homes and a 60.3% increase for townhouse/condos. This increase in inventory is a welcome sign for buyers, who have been facing a shortage of available homes in recent years.

Despite the increase in inventory, median sales prices continued to rise in both categories. Single-family homes saw a 1.4% increase in median sales price, reaching $375,000, while townhouse/condos experienced a 2.0% increase, reaching $255,000.

Days on market, which is the time it takes for a home to sell after being listed, also increased significantly for both categories. Single-family homes saw an increase of 104.3%, while townhouse/condos saw an even greater increase of 192.9%.

Overall, the Tucson housing market is showing signs of slowing down, with decreases in new listings and pending sales. However, the increase in inventory and median sales prices suggests that demand for homes in the area remains strong. The significant increase in days on market may indicate that homes are taking longer to sell, but this could also be attributed to the increase in available inventory. It will be interesting to see how the market develops in the coming months.

Is Tucson as Seller's Housing Market?

Tucson Real Estate Market Forecast 2023-2024

What are the Tucson real estate market predictions for 2023? Let us look at the price trends recorded by Zillow (a real estate database company) over the past few years. The Tucson real estate market has been on an upward trend over the past year, with home values increasing by 3.9% to an average value of $313,010 as of March 31, 2023. The market has been experiencing a shortage of inventory, which has led to a seller's market, with homes selling for approximately the asking price on average.

Looking ahead, the Tucson real estate market is expected to continue growing in 2023 and 2024. According to the forecast, the Tucson metropolitan statistical area (MSA) is predicted to experience a 3.2% increase in home values by March 31, 2024. This growth is attributed to the continued demand for homes in the area, as well as the limited supply of available inventory.

Despite the current seller's market conditions, there are still opportunities for buyers to find homes at a reasonable price. As of February 28, 2023, 57.4% of homes sold in Tucson were under the list price, and the median days to pending was 22 days, indicating a fast-moving market.

However, buyers should be prepared to act quickly and make competitive offers as the market continues to be driven by demand. For sellers, it is a great time to list their homes, with the average home going pending in just 22 days and a median sale-to-list price ratio of 0.988 as of February 28, 2023.

In conclusion, the Tucson real estate market is poised to continue growing in 2023 and 2024. Home values are predicted to increase, driven by high demand and limited inventory. Buyers should be prepared to act quickly, and sellers can take advantage of the current seller's market conditions to list their homes for sale.

Tucson Real Estate Investment: Should You Invest in Tucson?

Should you consider Tucson real estate investment? Many real estate investors have asked themselves if buying an investment property in Tucson is a good investment. You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers. The Tucson housing market has a mixture of owner-occupied and renter-occupied units. As per Neigborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached are the most common housing units in Tucson.

Other types of housing that are prevalent in Tucson include large apartment complexes, row houses (attached homes), duplexes, and homes converted to small apartments. Tucson's single-family homes account for more than 50% of the city’s housing units. Let’s talk a bit about Tucson before we discuss what lies ahead for investors and homebuyers. Tucson is home to around half a million people. The Tucson housing market is larger than that, though, because the Tucson metropolitan area is home to around a million people in all.

Tucson is Southern Arizona's thriving metropolis. Metropolitan Tucson has about a million residents, but the population increases dramatically between December and March when Snow Birds fly south to enjoy our pleasant winter. Tucson loves Snow Birds. Is Tucson going to be one of the hottest real estate markets for investors? One of the big factors in the real estate sector's performance is going to be Tucson's ability to continue to attract new companies and to attract other companies to come to this region.

The more sustained growth in the Tucson real estate market buoys confidence in the area, allowing the market to overcome obstacles that have been problematic in the past. The Tucson area is slowly growing and has excellent long-term prospects. Like most cities nationwide, Tucson has experienced strong and steady real estate appreciation over the last couple of years.

Although this article alone is not a comprehensive source to make a final investment decision for Tucson, we have collected ten evidence-based positive things for investors who are keen to buy an investment property in Tucson. Let’s look at the state of the Tucson real estate market and the factors driving the market in the short and long term.

Tucson's Real Estate is Affordable

Tucson, located in southern Arizona, is known for its rich cultural heritage, scenic beauty, and outdoor recreational activities. It's also home to an affordable real estate market, making it an attractive option for homebuyers looking for a balance of affordability and quality of life.

According to recent data, the average home value in Tucson is $313,010, which is lower than the national average of $383,000. Additionally, Tucson's real estate market has experienced steady growth in the past year, with a 3.9% increase in home values over the last 12 months.

Despite this growth, the cost of living in Tucson is lower than many other major cities in the US. In fact, according to Numbeo, a website that compares the cost of living between different cities, the cost of living in Tucson is 29.4% lower than in Los Angeles, 17.2% lower than in Denver, and 9.4% lower than in Phoenix.

Tucson's affordability extends beyond just the cost of housing. Utilities, groceries, and transportation are also more affordable in Tucson than in many other cities across the US.

Another advantage of Tucson's real estate market is the variety of housing options available. From single-family homes and townhouses to condos and apartments, there are plenty of options to fit different lifestyles and budgets.

The Massive Seasonal Market

Like that of Phoenix, the Tucson real estate market sees a massive influx of snowbirds, and retirees who flock here during the winter. That creates a large, seasonal rental market. The need for many retirees to sell their second homes when they can no longer travel or live independently provides an opportunity to snap up properties at a bargain rate. Better yet, a large number of those properties don’t have a mortgage on them. Other snowbirds sell their condo and move into single-family homes when they decide to stay in Tucson year-round.

Tucson's Military Market

Military service members and their families are another large rental market. Tucson is notable for having a large military base, Davis-Monthan Air Force Base. That employs around eight thousand people. However, unlike some other metropolitan areas, the local economy is rather diversified, so the rise and fall of military spending won’t crater the Tucson real estate market.

Tucson's Large Student Market For Rental Property

The second-largest private employer in the city is the University of Arizona. That college has around 45,000 students. The law school and medical school associated with the university attract students from around the country. Colleges provide a steady stream of renters, whether you’re renting out a building full of efficiency apartments or a single-family home shared by several students. However, because Tucson’s economy is not tied to the rise and fall of the college, if enrollment did decline at the college, people moving to the area for work could move in. That makes the Tucson real estate market far more stable than your typical college town.

Rental rates have been steadily rising in the Tucson area and median new-home prices are increasing year-over-year. This has created a large permanent rental population that will take advantage of any affordable housing stock. Another factor in this equation is the limited supply of new housing in the price range most home buyers would be able to afford. There is a shortage of properties under $200,000 relative to demand, though the competition is stiff for properties at all levels except the $500,000 plus luxury market. This means that those who invest in the Tucson real estate market will guarantee that their property appreciates.

Tucson's Strong Job Growth Acceleration

We’ve already addressed the university and military base generating demand for rentals in the Tucson housing market. Another factor driving demand is a strong job market overall. Raytheon Missile Systems, for example, employs around 10,000 people. While Tucson isn’t the capital of Arizona, it is home to several governmental agencies. The US Customs and Border Protection division, for example, employs several thousand people in and around Tucson. The State of Arizona and Pima County each have several thousand jobs in this area, as well.

Despite a slowing of net natural change, population growth in the Tucson Housing Market Area accelerated since 2016 because of increased net in-migration. During the period from 2011 to 2016, the net in-migration was averaging 3,400 people annually while net natural change slowed to an average of 2,875 people a year. Even though the net natural change has slowed further, to an average of 1,500 people a year since 2016, population growth accelerated to an average of 8,750, or 0.9 percent, a year because net in-migration increased to an average of 7,250 people annually as job growth accelerated.

Tucson is Landlord Friendly

Arizona is incredibly landlord-friendly. Evictions are seamless. Arizona’s non-compliance laws require the tenant to pay rent and provide accurate information or else they are guilty of breaching the contract. If the tenant breaches their contract, the lease can be voided within ten days. Arizona has limited renters’ protections, but those are focused on residents in mobile homes. For example, there are payment grade period laws for those renting mobile homes but not those renting a condo or single-family home. There are limits on late fees charged on late rent for those in mobile homes, but not for those staying in an apartment or rented single-family home.

The Tucson real estate investing market has recovered and is poised for slow, steady, and certain long-term growth. The shifting demographics and known groups are eager to sell at the right price provide an excellent opportunity to find bargains almost anywhere in the Tucson real estate market. An investment property that costs $150,000 is what some experts recommend starting with.

Good cash flow from Tucson investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Tucson in a growing neighborhood would be key to your success. If you invest wisely in Tucson's real estate, you could secure your future. As with any real estate purchase, act wisely. Evaluate the specifics of the Tucson housing market at the time you intend to purchase.

When looking for the best real estate investments in Tucson, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing. Some of the best neighborhoods in or around Tucson, Arizona are Rancho Vistoso, Continental Ranch, Catalina Foothills, Central Tucson, El Montevideo, Landsdale, Rincon Vista at Rita Ranch, Sycamore Park Village, Rosemont West, Broadmoor-Broadway, El Encanto Estates, Desert Aire-Loma Linda, Peter Howell, Vista Montana Estates, Highland Vista Cinco Via, and San Clemente.

Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.

NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Tucson.

Consult with one of the investment counselors who can help build you a custom portfolio of turnkey properties. These are “Cash-Flow Rental Properties” located in the various growing housing market of the country.

All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Tucson turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.

Apart from the Tucson market, you can also invest in the Phoenix real estate market. Phoenix is a hot place for real estate investment. Phoenix deals with a large retiree population, both permanent and seasonal. To accommodate aging in place, they’ve loosened the rules on building “accessory dwelling units”, commonly known as mother-in-law suites. The city also recognizes the need for affordable housing, and they allow people to build and rent out ADUs as affordable housing, especially if the property is within walking distance of public transit.

Buy a house, rehab it, and build a granny flat, and you have two rental properties for not much more than the price of one. And the city is almost certain to approve it because they want denser development. The second real estate market in the state of Arizona lies in the city of Scottsdale. If you are an investor, Scottsdale has a track record of being one of the best long-term real estate investments in the nation. You’ll see better than average returns on the average Scottsdale real estate investment property, and its value will be bolstered by a variety of factors. This makes Scottsdale a little better choice for investors than Phoenix.

Chandler is another hot real estate market bordered by Tempe, Mesa, and Phoenix. The Chandler housing market is home to a decently sized student population, but its economy isn’t dependent on the rise and fall of one school. The Chandler-Gilbert Community College system caters to local students. Western International University and Ottawa University have campuses here. The massive Arizona State University campus in Tempe is only fourteen miles away. An affordable Chandler real estate investment property that can advertise a ten-minute drive to that campus will see a steady stream of students signing up.

Let us know which real estate markets you consider best for real estate investing! 

Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

References

Latest Market Data, Trends, and Statistics
https://www.tucsonrealtors.org/mlssaz/mls_statistics
https://www.neighborhoodscout.com/az/tucson/real-estate
https://www.zillow.com/tucson-az/home-values
https://www.realtor.com/realestateandhomes-search/Tucson_AZ/overview

Student market
http://worldpopulationreview.com/us-cities/tuscon-population/
https://en.wikipedia.org/wiki/University_of_Arizona

Snowbirds
http://arizonasonoranewsservice.com/snowbirds
https://www.azpm.org/s/33899-snowbirds-no-more-seasonal-residency-shrinking-in-tucson

Landlord friendly
https://morrisinvest.com/blog/2016/12/21/5-most-landlord-friendly-states
https://www.avail.co/education/laws/arizona-landlord-tenant-laws

New Construction & Population Growth
https://www.huduser.gov/portal/publications/pdf/TucsonAZ-CHMA-19.pdf