Supply (not demand) challenges Tucson housing market

By Mike Sunnucks | Rose Law Group Reporter

The Tucson housing market has been a resurgence of buyers but also supply challenges.

“There isn’t enough supply to meet the new demand,” said Steven Hensley, an analyst with Belfiore Real Estate Consulting.

Hensley said the number of resale (i.e. existing) homes listed for sale in the Tucson market were down 40 percent in June compared to a year ago. “There is not a lot to work with from a buyers’ perspective,” Hensley said.

Hensley said that dynamic helps demand for new homes, especially in entry level prices points of $250,000 and below.

“It’s the entry level that is driving things right now especially on the new home side,” he said.

He said homes under contract in Tucson were up 19 percent in June compared to a year ago.

Tucson is seeing some housing demand and supply parallels to Phoenix where demand jumped after the previous COVID closures ended and builders face supply challenges.

Hensley said there was pent up demand from buyers who delayed home searches during the COVID-19 lockdowns that ran from mid-March to Mid-May. He said those buyers have come back out spurred by historically how interest rates.

The Tucson market is also seeing some buyers coming in from California, Colorado, and other states with some buyers looking for second homes and others are looking to relocate someplace calmer.

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July 2020