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Tucson Real Estate Market Trend And Forecast 2019

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Tucson Real Estate Market Update 2019

Real estate market booming in Southern Arizona and housing experts see positive trends in the Tucson market. The Tucson real estate market hit the news a decade ago for hitting incredible highs before the average home value was cut in half. However, the Tucson real estate market’s slow recovery has been overlooked by the media and investors alike. Let’s take a look at the Tucson market today. 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. The Tucson housing market is seeing moderately strong demand, but the Tucson housing market is nowhere near the insanely overheated conditions it saw in the 2008 housing bust. The Tucson area is slowly growing and has excellent long term prospects.

Pic Credits: Pixabay.com | Photo by austinscriver

Tucson Arizona Real Estate Market Forecast 2019

According to Zillow, the median home value in Tucson is $185,100. Tucson home values have gone up 6.4% over the past year and Tucson real estate market prediction is that they will rise 0.9% within the next year. The median list price per square foot in Tucson is $136, which is lower than the Tucson Metro average of $138. The median price of homes currently listed in Tucson is $219,900 while the median price of homes that sold is $194,100. The median rent price in Tucson is $1,200, which is lower than the Tucson Metro median of $1,250.

tucson real estate market forecast 2019
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Graph Credits: Zillow.com

Tucson Real Estate Market Trend 2018

The residential real estate market in Tucson continues to churn unimpeded. According to Trulia, Tucson real estate market trends indicate an increase of $10,100 (6%) in median home sales and a 0% rise in median rent per month over the past year. The average price per square foot for this same period rose to $134, up from $126. Trulia has 3,017 resale and new homes in Tucson lined up for you, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The median sales price for homes in Tucson for Jul 18 to Oct 17 was $190,000 based on 3,014 home sales. Average price per square foot for Tucson was $134, an increase of 6% compared to the same period last year. The median rent per month for apartments in Tucson for Sep 22 to Oct 22 was $1,200.

Tucson Real Estate Market Trend 2018
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Graph Credits: Trulia.com

Tucson Real Estate Market Summary

  • Median Sales Price: $190,000 (On Trulia)
  • Price Per Sqft: $134
  • Median Rent Per Month: $1,200
  • Median Household Income: $43,451
  • Home Owners: 68%
  • Single Residents: 37%
  • Median Age: 38
  • College Educated: 35%

There are 5,191 homes for sale in Tucson on Realtor.com, ranging from $2K to $9.9M. Additionally, there are 1,054 rentals, with a range of $300 to $11K per month. In November 2018 the housing market in Tucson, AZ is a balanced market, which means there is a healthy balance of buyers and sellers in the market. The median listing price per square foot was $139. The median sale price was $217.5K. Homes in Tucson, AZ sold for 1.55% below asking price on average in November 2018. On average, homes in Tucson, AZ sell after 58 days on the market. The trend for median days on market in Tucson, AZ is flat since last month, and flat since last year.

tucson housing market trend 2018
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Graph Courtesy: Realtor.com

On Movoto, the median list price in Tucson is $265,000. The median list price in Tucson went up 1% from November to December. Tucson’s home resale inventories is 2,460, which decreased 3 percent since November 2018. The median list price per square foot in Tucson is $144. November 2018 was $144. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in December.

tucson real estate market trends
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Graph Courtesy: Movoto.com

According to Neigborhoodscout.com, single-family detached homes are the single most common housing type in Tucson, accounting for 52.46% of the city’s housing units. Other types of housing that are prevalent in Tucson include large apartment complexes or high rise apartments ( 25.70%), row houses and other attached homes ( 8.03%), and a few duplexes, homes converted to apartments or other small apartment buildings ( 7.31%). People in Tucson primarily live in small (one, two or no bedroom) single-family detached homes. Tucson has a mixture of owner-occupied and renter-occupied housing.

Tucson Foreclosures And Bank Owned Properties

Mortgage delinquency is the first step in the foreclosure process. This is when a homeowner fails to make a mortgage payment. The percent of delinquent mortgages in Tucson is 0.9%, which is lower than the national value of 1.1%. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Tucson homeowners underwater on their mortgage is 9.3%, which is higher than Tucson Metro at 9.2%.

On RealtyTrac, there are currently 586 properties in Tucson, AZ that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 2,069. In November 2018, the number of properties that received a foreclosure filing in Tucson, AZ was 37% lower than the previous month and 33% lower than the same time last year. Home sales for October 2018 were up 0% compared with the previous month, and down 100% compared with a year ago. The median sales price of a non-distressed home in Tucson was $0. The median sales price of a foreclosure home in Tucson was $0, or 0% higher than non-distressed home sales.

Tucson Home Prices And Appreciation Rates

The average price for a home in Tucson has risen 10 percent over the last two years, according to data collected from the National Association of Realtors—from $168,909 in February, 2015 to $189,000 in February of this year. Tucson’s appreciation rate notably has been below the national average for the last ten years. The average annual home appreciation rate in Tucson during the period has been just 0.09%, which is lower than 70% of US communities. NeighborhoodScout’s data show that during the latest twelve months, Tucson’s appreciation rate, at 5.13%, has been at or slightly above the national average. In the latest quarter, Tucson’s appreciation rate has been 2.39%, which annualizes to a rate of 9.91%. Relative to Arizona, our data show that Tucson’s latest annual appreciation rate is lower than 60% of the other cities and towns in Arizona.

10 Highest Appreciating Tucson Neighborhoods Since 2000: By Neigborhoodscout.com

  1. N Stone Ave / E Congress St
  2. S 6th Ave / W 22nd St
  3. Vandenberg Village
  4. N Main Ave / W Speedway Blvd
  5. N 6th Ave / E Speedway Blvd
  6. S 10th Ave / W 22nd St
  7. N Stone Ave / E Laguna St
  8. S La Cholla Blvd / W Starr Pass Blvd
  9. E 22nd St / S Park Ave
  10. W Drexel Rd / S 12Th Ave

Should You Buy Investment Properties In Tucson Real Estate Market?

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. In November 2018, the median list price of homes in Tucson, AZ was $241K, trending up 4.8% year-over-year. 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. Here are the 10 best reasons to buy investment or rental properties in the Tucson real estate market.

1. The Massive Seasonal Market

The Tucson real estate market like that of Phoenix sees a massive influx of snowbirds, 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 a single family home when they decide to stay in Tucson year-round.

2. The 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.

3. The Large Student Market

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.

4. The Large Rental Market Overall

The lower than average incomes in the Tucson area make the median home price of $130,000 too expensive for many would be home buyers. Per capita income in 2017 was $22,000, while median household income was just under $40,000. This has created a large permanent rental population that will take advantage of any affordable housing stock. As of 2017, about 36% of residents rented.

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 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.

5. The Strong Job Market

We’ve already addressed the university and military base generating demand for rentals in the Tucson housing market. Another factor driving demand is the strong job market overall. Raytheon Missile Systems, for example, employs around 10,000 people. While Tucson isn’t the capitol of Arizona, it is home to a number of 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.

6. The Low Cost of Real Estate

The median home in the Tucson housing market was up several percentage points in 2018, but it still came in at under $140,000. The average detached single family home can be bought for less than $200,000, though prices rose 6% year over year. Duplex units cost around $130,000 each.

Townhome units cost around $80,000 each when found in groups of three or more. RVs can be found for less than $40,000, while snowbirds provide an instant market for renting out these cheap, low maintenance properties. Demand in this area is so great that some are advocating the construction of new RV parks to help the Tucson economy.

7. The Good ROI and Opportunities for Even Better Returns

Gross rent in Tucson hovered around $900 a month in 2017. This is somewhat lower than the median US rental rate and a little cheaper than the Arizona median rate. Many people move to Tucson and then commute to work in surrounding cities.

Tucson’s relatively slow and steady growth rate means that new construction is at a crawl. That is causing rents to rise faster than average, especially at the low end of the market. Another factor propping up home prices is the relatively small inventory on the market; snowbirds typically sell when they need to instead of based on market conditions.

Another issue with the Arizona market is the fact that home values are just now reaching prices they were at in 2008. That created a large number of accidental landlords who bought homes for $200,000 in 2008 and have been renting properties located in the Tucson real estate market though they themselves have left. This creates an excellent opportunity for investors who can pay cash to buy out these long-distance landlords.

8. The Area’s Demographic Momentum

The median age of Tucson residents is 33.2, several years lower than the national median age of 37-38. A large number of students try to find work in the area, and many start their families here. Growth is a steady 1%, a little higher than the national 0.7% growth rate. However, Tucson is notable for the sheer number of people moving to the city from around the country, adding to the population and nearly guaranteeing their children will remain here. That is aside from the slow but steady international migrants to the area, as well.

9. It 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 at 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.

10. It Has Low Property Taxes

Arizona ranks 38th out of 50 states in the property taxes paid as a percentage of the property’s value. That average rate was 0.70%. The national average is 1.19%, while New Jersey takes the unfortunate lead at 2.40%.
Arizona counties and cities can tack on their own property tax bill. The per capita state and local property tax collections cost the average resident $1000 a year, placing Arizona 34th out of the 50 states.

Tucson Real Estate Investment: Summary

tucson housing market
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Pic Credits: Pixabay.com | Photo by TCFA

If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate. You must also learn from successful real estate investors who have retired early on in their lives by investing in some of the hottest real estate markets. The strong US real estate market shows no signs of slowing, and is slated to remain among the world’s top performers in 2019. The Tucson housing market has recovered and is poised for slow, steady and certain long term growth. The shifting demographics and known groups eager to sell at the right price provides an excellent opportunity to find bargains almost anywhere in the Tucson real estate market. Tucson consists of 583 neighborhoods.

Which Real Estate Markets Are Good To Buy Investment Properties In 2019?

Apart from the Tucson market, you can also go for the Phoenix real estate market, which is that it is going to be a hot investment destination for new real estate investors. Phoenix real estate market trends indicate an increase of $16,000 (7%) in median home sales and a -3% drop in median rent per month over the past year. As per Trulia, the average price per square foot for this same period rose to $162, up from $148. 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.

Another city that we suggest is the the Little Rock in Arkansas. The Little Rock Arkansas real estate market offers long term value and slow growth, several large permanent populations of renters and excellent financial numbers. You can’t afford to overlook the opportunity the Little Rock housing market offers. We could say that Little Rock is a great place to invest because it is showing up on national publication’s lists of top places to live. For example, Little Rock hit 8th out of ten top cities in Nerd Wallet’s 177 cities with more than 150,000 residents; that ranking drew on 2016 Census data. Little Rock hit number one on Kiplinger’s “10 Great Places to Live” list and 7th on their “Best Value City” list.

A local military base can be a goldmine for real estate investors. Little Rock Air Force Base is located roughly 20 miles northeast of Little Rock. This massive military base is the fourth largest employer in the state, and it brings thousands of renters to the Little Rock housing market. The military base itself employs around 30,000 people.

Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you can fill up the form given here. One of our investment specialists will get in touch with you. Norada Real Estate Investments helps take the guesswork out of real estate investing. We can help you succeed by minimizing risk and maximizing profitability of your real estate investments.

*Remember, caveat emptor still applies when buying a property anywhere. 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.


References

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

large rental market
https://www.deptofnumbers.com/rent/arizona/tucson/
https://news.azpm.org/p/news-splash/2017/7/14/113976-tucson-house-sales-climb-inventory-does-not-higher-prices/

demographics
https://www.areavibes.com/tucson-az/demographics/

https://news.azpm.org/p/news-articles/2018/3/22/126092-census-us-migration-to-tucson-doubled-in-2017/

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

Low cost of real estate
https://www.census.gov/quickfacts/tucsoncityarizona
http://www.city-data.com/city/Tucson-Arizona.html
https://news.azpm.org/p/news-splash/2018/3/14/125651-number-of-tucson-homes-for-sale-hits-historic-low/
https://news.azpm.org/p/news-splash/2017/7/14/113976-tucson-house-sales-climb-inventory-does-not-higher-prices/

financial numbers/ROI
https://tucson.com/business/affordable-housing-hard-to-come-by-in-tucson-amid-rising/article_ab9d7e90-842b-5aa2-b6e1-af78f02197ed.html
https://news.azpm.org/p/news-splash/2018/3/14/125651-number-of-tucson-homes-for-sale-hits-historic-low/

The military market
https://en.wikipedia.org/wiki/Tucson,_Arizona#Top_employers

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

Low property taxes
https://taxfoundation.org/state/arizona
https://smartasset.com/taxes/new-jersey-property-tax-calculator

Market Trends And Forecast                                                                                              https://www.zillow.com/tucson-az/home-values                                            https://www.trulia.com/real_estate/Tucson-Arizona                        https://www.realtytrac.com/statsandtrends/az/pima-county/tucson https://www.neighborhoodscout.com/az/tucson/real-estate                          https://www.realtor.com/local/Tucson_AZ

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