Demand for housing in Tucson market outpaces supply
TUCSON, Ariz. (KOLD News 13) – Despite being in the midst of a pandemic with historically high unemployment, the housing market is booming.
Gladden Farms, a master-planned community in Marana, is a good indicator of what the housing market in this area looks like.
“The project is moving at a pace that it hasn’t seen since before the great recession, so you are literally talking about 14 years ago. It has certainly been a quick turnaround,” said Dean Wingert, a vice president with Crown West Land Group.
Wingert said Gladden Farms has more than 2,000 homes.
“Just within the last two months, we have sold over 300 lots to home building companies,” Wingert said.
Wingert said despite home builders virtually taking March and April off due to the pandemic, home buying in 2020 is already ahead of last year’s pace.
“The sense of the market, since the pandemic hit in March, has just completely recovered,” said Wingert.
Wingert said low interest rates are attracting the traffic.
“It’s a great time to buy a new house. You often get into a brand new house for what you are currently paying in rent somewhere,” said Wingert.
John Carroll is an agent with Land Advisors Organization, and recently worked on a residential market study.
Carroll said right now, there is not enough land for builders to keep up with current demand.
“From 2011 to 2019, builders built through 22,000 lots. During the same time frame, they only resupplied 13,000 lots,” Carroll said.
Carroll said his team identified 91 active communities in the area, but anticipate 53 of those will be sold out within a year.
“In 2006, we had 154 active communities, so it created a lot more choice for consumers to look through and to acquire, and it helped keep home prices in check because there was so much competition,” Carroll said.
He said even if land was available right now, the lots would not be ready in time to meet the demand.
“Anything that we identify today really doesn’t come out to the market for maybe three to five years, so I just don’t see us getting out of this rut we have gotten into without really building a lot more,” Carroll said.
Carroll said 14,000 to 32,000 lots are needed over the next five years to keep up with the demand.
According to Carroll, the median new home price in Tucson is $307,558. That is a two percent increase from 2019. Carroll said the median price for an existing home is $250,538 dollars, compared to 2019′s median price of $236,000.
“It really is squeezing supply, when demand is the same if not more and so home prices go up,” Carroll said.