Arizona is known for many things, including its hot desert climate, the Grand Canyon, and those ubiquitous University of Phoenix commercials you’ve likely seen and heard. But did you know that Arizona is also home to some of the fastest growing real estate markets in the country?
That’s right, some of the top real estate markets can be found in Arizona, and investors from around the country are flocking to Arizona markets to find good deals. In this article, we’ll dive into the Tucson market and why it’s on our radar as one of the top growing markets you might want to consider investing in.
Why We Love Tucson
One of the top factors we look for in any market we invest in is livability. That is, do people enjoy living in that market, and is the quality of life high enough to attract new residents from other markets and states? Over the last few years, Tucson has been quietly climbing the ranks as one of the best places to live, with a robust arts scene, architecture, and restaurants.
In addition, we also look for strong job growth, population growth, and job diversity – all of which are the cornerstones of what makes Tucson such a strong market.
Where Is Tucson, Anyway?
Southern Arizona offers an awe-inspiring and lush desert landscape that nearly 1.6 million people call home. Tucson and the surrounding areas are accomplishing a goal that many growing regions have abandoned – an ecologically sound and culturally sophisticated approach to growth and development. This aligns with our philosophy here at Goodegg Investments, where growth and sustainability are top of mind.
Tucson is located in Southern Arizona about 100 miles south of Phoenix and 60 miles north of the US/Mexico border and boasts over a million people living in the metro area. As the 33rd largest city in the US, Tucson offers all the amenities of a big city while still retaining some of the charm of a small town.
Given its location, Tucson is turning itself into a port of sorts as it is far cheaper for companies to fly their goods to Tucson and truck them to the Los Angeles area as flying them to LA is cost prohibitive. As a result warehouses are currently being built in anticipation of current and future needs.
Why People Are Moving To Tucson
Tucson is a culturally diverse city, and that rich heritage is reflected in both its architecture and restaurants. Tucson was ranked in the “Top 25 Arts Destinations” by American Style Magazine.
Tucson has numerous outdoor recreation options and is home to Saguaro National Park. In fact, Bankrate ranked Tucson as one of the Best Places to Move in 2022.
Tucson is experiencing tremendous job and population growth. Professionals can live, work, and play in Tucson with a variety of outdoor activities that can be enjoyed year-round, thanks to Tucson’s dry, sunny climate.
Tucson’s Job Growth, Population Growth, And Rent Growth
The area’s population growth coincides with its job market growth. Household income rose 3.5% from $51,800 Q4 2020 to $53,600 in Q4 2021. The city’s economy is wide and diversified, which is one of the most important factors we look for here at Goodegg Investments in any of the cities we consider investing in.
Institutional and government foundations, healthcare, the University of Arizona, and the Department of Homeland Security make up Tucson’s economic backbone. Caterpillar Inc, an American Fortune 100 corporation and the world’s largest construction-equipment manufacturer, has their mining headquarters in Tucson which employs numerous $90K+ salaried workers. Other major local employers are 4 local casinos, Raytheon and the airport, all within the surrounding area of projects we have our eye on. In the fourth quarter of 2021, the Tucson market recorded employment of 383,700 jobs, a 3.2% increase over the previous year. Regional unemployment stood at 4.9%, which is higher than the national average and also showed dramatic improvement over the previous quarter. And in good news for the entire state, Arizona had recovered all jobs lost during the pandemic by November 2021.
Housing remains strong with Tucson named a top ten “Hidden Gem” market by the National Association of Realtors and median sales prices up 20.8% over November 2020. Along with the job and employment growth, Tucson has been one of the leaders in rent growth the last two years and last year alone saw a 14% rent increase. This rent growth is spurred on by impediments for new apartment buildings due to the lack and cost of raw goods to build. The typical renter of areas we have our eye on are $100k + Raytheon employees who are looking to enjoy all that Tucson has to offer.
Why You Should Consider Investing In Tucson
Often, by the time you hear about a hot market, everyone else has heard of it too, and thus much of the growth has already happened. Tucson is a market that has been steadily and quietly climbing the ranks over the last few years, and investors are just starting to take notice.
Because Tucson is still a smaller market in comparison to Phoenix, it still has plenty of room for growth. With Tucson’s strong job diversity and job growth, we are bullish on its continued growth. With the mix of military presence, retirees, and defense contractors Tucson weathers recessionary periods better than other areas.
If you’re looking for new markets to invest in to build and diversify your portfolio, we highly recommend you look into Tucson. And if you’re an accredited investor looking for passive investment opportunities, we invite you to invest alongside us as we invest in Tucson and other top real estate markets around the country.