July 25, 2022

Tucson Q2 Multifamily Market Insights: Rent growth accelerates, even as vacancy pushes higher

Highlights:

The Tucson multifamily market showed signs of returning closer to stable performance in the second quarter, following a volatile past few years. Vacancy followed its historical trend of pushing higher during the summer months. Rents showed continued strength, rising nearly 3 percent in the past three months.
Apartment vacancies in Tucson trended higher for the third consecutive quarter, rising 90 basis points to 5.7 percent. In the past 12 months, vacancy has increased by 130 basis points.
The pace of rent growth accelerated in the second quarter. Rents advanced 2.9 percent to $1,159 per month in the second quarter, building on a 2.3 percent gain at the start of 2022. Year over year, the average rent in Tucson climbed 16.8 percent.
During the second quarter, the median sales price was $125,000 per unit, nearly identical to pricing in the first quarter. Transaction activity increased from the start of the year, and the average cap rate remained steady at about 4 percent.