By Gabriela Rico | Arizona Daily Star
Tucson’s housing market is expected to stabilize in 2023 as concerns over rising interest rates were met with creativity by homebuilders.
By offering discounts, buy downs and lower base prices with fewer frills, homebuilders have been able to sell the spec homes that were started during the home price run-up.
This caused a sharp decline in the number of new home permits but there was still much activity, said Jim Daniel, a local housing analysts with R.L. Brown Reports.
“It’s probably too early to expect a permit recovery, and most market disciples recognize that until that unsold-permitted housing inventory reaches completion and finds buyers, there should be little expectation on the part of market observers for a substantive change in the level of permit activity,” he said.
In January, there were 176 new home permits issued in the Tucson area, compared to 481 in January 2022 — a drop of 63%.
“With just a casual glance at the statistical data … one would find it easy to conclude that the results were dismal, and the marketplace was decimated,” Daniel said, noting that homebuilders closed on 202 new homes in January, versus 229 in January 2022.
“The Tucson market has been actively and aggressively involved in rebalancing its production efforts to its demand as demonstrated by recorded closings,” he said. “To have failed to accomplish this rebalancing over the last several months would have created a market disaster of stunning proportions.”
