May 4, 2023

Tucson 1Q23 Multifamily Market Insights: Vacancy elevated, but showing signs of stabilizing

Highlights:

Operating conditions in the Tucson multifamily market were stable in the first quarter. Rents rose and vacancies remained near current ranges. Development activity picked up with projects totaling roughly 450 units coming online in the first quarter.
After recording steep increases throughout 2022, the vacancy rate inched higher by just 10 basis points during the first quarter to 7.5%. Year over year, the rate rose 270 basis points; this marked the highest vacancy rate in the region since 2015.
With the vacancy rate holding fairly steady in the first quarter, apartment rents trended higher at a modest pace. Asking rents rose 0.6% during the first quarter, reaching $1,164 per month. Year over year, rents are up 3.4%.
Multifamily sales activity was minimal during the first quarter, with transaction volume dropping by 75% from the previous period. Pricing rose, with the median sales price reaching $169,200 per unit.