June 4, 2018
Tucson remains a ‘Bull Market’
How long will it last?…CLICKHERE
Today we have 47 properties for sale ranging in price from $100,900 to $6,580,000. Transactions were primarily in the $1-5 Million range.
Construction of new Multifamily is down from last year while rents are leveling off after reaching their peak in the past 12 months.
NOW THE BAD NEWS! Vacancies are creeping up for the first time since 2016. Tucson vacancies remain at 6.8% market wide and only 4.2% near the university sub-market.
The first quarter in Tucson enjoyed double the number of properties sold as compared to the 4th quarter of 2017. Median prices fell over 12% compared to the 2017.
Cap rates rose slightly higher during the first quarter of 2018 as did the 10-year Treasury bond. Average cap rates during the first quarter were about 6.6% which was slightly higher than the cap rates in 2017.
Multifamily rents are rising. They are over 6% higher than in 2017. Submarkets show strongest gains especially closer to the University of Arizona and in the Class C market segment. The highest rate increases were in the Catalina Foothills submarket with Northwest Tucson close behind.
New construction is gaining momentum with 800 new units scheduled to arrive on the market in 2018. The outlook for 2019 is expected to slow because of a drop in permitting which has dropped during the early months of 2018, signaling a possible slowdown in construction for 2019.
The key to future growth in the Multi-Family sector is jobs which are growing at a moderate rate with many companies expected to add several thousands of jobs to the Tucson economy.
We are predicting sellers will become more active in listing properties to head off a possible slump in sales because of interest rates increasing.
Combined factors augur for a steady and strong market for Tucson in the foreseeable future.
Chuck Corriere, MBA