Tucson Q1 Multifamily Market Insights: Rent Growth Persists, but at a More Gradual Pace
Highlights:
- Demand for multifamily units in Tucson leveled off during the first quarter, following a year of rapid growth. Vacancy rose, generally in older units, while rents continued to push higher. A healthy labor market is forecast to support operating conditions through the remainder of this year.
- Apartment vacancy rose 40 basis points in the first quarter to 4.8 percent. This marked the second consecutive quarter where the rate ticked higher, following several years of gradual declines. During the past 12 months, the rate has risen 50 basis points.
- Asking rents finished the first quarter at $1,126 per month, 23.2 percent higher than one year ago. Rents increased 2.3 percent during the first quarter.
- Fewer apartment properties sold at the start of this year, following a rapid pace of deal flow at the end of 2021. In deals that closed in the first quarter, the median price was approximately $125,000 per unit, while cap rates averaged around 4.2 percent.
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