According to new research numbers from Bright Future Real Estate Research, the real estate market is skyrocketing in southern Arizona. From Marana to Oro Valley to Tucson, data shows that people scooped up new homes at an aggressive clip in 2018.
For instance, new home permits in the greater Tucson region, which also includes Vail and Sahuarita, were up 7.6 percent year-over-year from September 2017 to September 2018. A total of 241 new permits were set in motion in the area in the month, adding to the grand total of 2,762 in the first nine months of this year. That’s nearly 400 more permits compared to last year in its first nine months.
The big push behind the real estate boom is due in part to continued private sector employment growth in the area. Big name companies like Raytheon and Caterpillar are contributing to this growth, and represent another boom in the region: job creation.
“Tucson continues to enjoy positive momentum on the job front with new employers such as Amazon, GEICO and Caterpillar, to name a few, currently building new facilities in Tucson,” Ginger Kneup of Bright Future Real Estate Research said. “Raytheon Missile Systems, Tucson’s largest private employer, is also in the process of an expansion that will include more than 2,000 new jobs.”
In fact, according to the University of Arizona, 7,400 jobs were added to the metro region since 2017; that is higher than the U.S. average growth rate. With more private sector jobs being created and more interest from national companies looking toward Tucson, business is a-boomin’.
The areas that have seen the most growth in Tucson in the time frame are construction, health care, and education. Job growth is expected to keep churning through next year until a possible slow down in 2020.
When it comes to real estate, the new home market has been able to meet buyer demands, according to research from Bright Future. On the flip side, existing homes have seen a dip in interest, with 3.3 percent fewer used homes being purchased in 2018 compared to the previous year.
A couple reasons behind this are lack of used inventory and a jolt in consumer confidence overall. In essence, it makes for a more sound financial move to invest in a brand new house. The research only looked at the first nine months of this year. However, for the entire calendar year, research is expected to show a total 7.9 percent jump, compared to 7.4 percent listed above, by early 2019.
The major players in this boom are the suburbs of the Tucson area. Marana and Vail attributed 12.1 percent and 18.3 percent, respectively, of all new home permits in the region this year. The expectations are that, like the job numbers, new home permits will continue to climb.
“Although prices in the resale inventory have increased by nearly 6 percent in the last year, it is still not enough to entice more sellers into the market,” says Kneup. “The result is that the new home inventory becomes more competitive.”
The improvement of the real estate market in southern Arizona is due to stabilization. This factor is also giving consumers the confidence to go ahead and dive into a new property, as there has been little volatility in sales. It is a seller’s market for now and sustained growth is expected to carry things along for the next couple years.