Market Report
Tucson Multifamily Market Report
2025 Investment Forecast
Cost-of-Living Benefits Spur a
Second Year of Encouraging Demand; Investors Take Note
Demographic tailwinds aid the rental landscape. After the setbacks of household consolidation and rising vacancy in 2022 and 2023, Tucson showed signs of a rebound last year that is poised to extend through 2025. Fewer completions in several submarkets, along with an over 2 percent increase in household formation, will help bolster demand for existing units as the market’s affordability draws residents from higher cost-of-living metros. Tucson will welcome over 10,000 transplants for the fourth-straight year. Some areas popular among new residents include Casa Adobes-Oro Valley and Airport-Drexel Heights-Sahuarita, which saw vacancy below the market level last year despite many deliveries, aided by the market’s highest net absorption counts. Tucson’s single-family housing market dynamics will also foster greater rental appeal. While the gap between the Class A rent and the typical median home mortgage payment in Tucson is narrower than in Phoenix, its home prices are higher relative to the local median income.
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