Tucson Q3 Multifamily Market Insights: With Vacancies Low and Demand Elevated, Rents Spike

Highlights:

  • The Tucson multifamily market posted continued improvement during the third quarter. The vacancy rate fell even as developers continued to bring new units to the market. Fueled by tightening vacancy rates and continued renter demand, rents remained on a steep upward trajectory.
  • Vacancy dropped 30 basis points during the third quarter with the rate falling to 4.1 percent. Year over year, area vacancy is down 40 basis points, with a minor decline likely in the fourth quarter.
  • Apartment rents in Tucson continued to surge during the third quarter, advancing 6.1 percent after an 8.5 percent spike in the second quarter. Rents have increased 21.5 percent year over year, ending the third quarter at $1,053 per month.
  • The pace of multifamily property sales accelerated during the third quarter, spiking 20 percent from levels recorded in the second quarter. Prices are on the rise, with the median price reaching $97,300 per unit year to date, while cap rates have averaged approximately 5 percent.

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