Tucson key indicators point to investment opportunity??
Major employers moving to town, a pro-business local government and a reasonable cost of living has the Tucson investment market heating up. The once dangerous and lackadaisical downtown area is now vibrant and growing at a rapid pace. Developments across town are breaking ground, amazing restaurants are opening almost daily and the Tucson night life has greatly improved. Over the past 12 months and especially the last six, my investment team has seen a surge in the level of interest of out of state investors in the Tucson market. I was recently ask to present to a group of real estate agents about the reasoning behind this high level of interest and wanted to share 5 key points why I believe the Tucson market has reached the tipping point for accelerated growth:
1. The national association of realtors named Tucson a top 10 real estate market. 2016 saw an 8.2% increase in the median home value and a 6.1% increase is anticipated for 2017. Link
2. The Tucson real estate market median home price is still 19% below the 2007 market highs. While the majority of the country has recovered to near 2007 prices, Tucson still has a lot of room to appreciate (See attached Photo).
3. Forbes recently ranked Tucson as the #5 city for annual job growth, projecting 3.3% growth in 2017. This past year Raytheon announced they are adding 2,000 jobs, Caterpillar relocated its engineering team to Downtown Tucson adding 500 jobs, Comcast and Home Goods announced adding hundreds of jobs each and there are more announcements happening every month. This rapid increase of jobs in Tucson has the local economy buzzing. In addition, many of these are higher level positions which in turn will each produce 2-3 additional service jobs in the local economy. Link
4. The cost of living in Tucson is 8% below the national average and housing prices are 22% lower than the national average. Tucson is still a comparatively cheap place to live with an increasing opportunity for growth. A recent Forbes article on population growth in Arizona stated:
"The Grand Canyon State’s job and economic growth forecasts over the next five years are among the best in the U.S. Population growth through 2020 is expected to be the third fastest in the country." Link
5. People in the community are excited and positive about the direction of Tucson. I recognize this is not quantifiable, however it is very apparent in the community. I recently met with a large investment group from Seattle looking at purchasing apartment complexes in Tucson and they remarked that the general feeling from business owners and local government officials was one of excitement and anticipation. The individuals involved in the community feel the change happening on a daily basis.
The past two years have been fantastic for the Tucson real estate market and economy. It is becoming apparent that this growth was simply the first spins in a flywheel that has the potential to propel Tucson from a sleepy old-western town into a thriving economic center.
Thank you for reading!