Tucson could end year with 4K new home sales and continued low supplies

By Mike Sunnucks | Rose Law Group Reporter

The Tucson housing market is expected to end 2020 with 4,000 new home sales, according to projections by Belfiore Real Estate Consulting.

That would be a 20% gain from 2019, according Steven Hensley, an analyst for Phoenix-based Belfiore.

“It’s been pretty crazy down there,” Hensley said. He noted new home sales were up 42% when comparing July to September of 2020 to the same period a year ago.

But the Tucson market — like its Phoenix neighbor to the north — faces some tight housing supplies even with continued strong demand fueled by low mortgage interest rates.

“We’ve hit a new 42-month low with new home inventory,” Hensley said.

He said there are only 1,500 resales homes currently listed in metropolitan Tucson.

“Supply issues are definitely an issue down there,” he said.

Hensley said labor shortage and constrained lumber supplies challenge the housing market in Tucson and other markets.

“The mills closed with COVID and then all of a sudden they opened and all of a sudden and there is the most demand in 15 years. It was really hard to ramp up,” Hensley said.

He said Tucson also does not have a lot of companies who can help supply builders with trusses and pre-fabricated components for new homes.

“There’s just not very many producers down there to build the trusses and get the framers and some of the pre-fab work that the builders like to work with,” Hensley said.

He also said U.S. lumber supplies have been challenged by COVID as well as trade issues with Canada.

Hensley said the number of active new home communities in Tucson stands at 94 — the lowest level since 2014.

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