July 16, 2018

Strong Sales, Low Inventory Keep Tucson Housing Prices Growing

Tariffs are disincentivizing home builders, keeping inventory low in a high-demand market.

New houses construction hero Housing units going in near First and Fort Lowell in Tucson, July 2018. (PHOTO: Nick O'Gara, AZPM)

A total of 1,593 Tucson-area homes were sold in June, according to statistics from the Tucson Association of Realtors.

The last time sales were that high was June 2006.

High demand and low inventory has tilted the market in favor of sellers for years, pushing prices upward.

June's median sales price of $212,000 was 3.4 percent higher than it was a year before.

"We're seeing a fairly sustainable growth, and as our employment force grows that's only going to help with these numbers," said TAR President Ginny Huffman.

The number of homes for sale remains around half of what it would need to be for the market to be considered balanced.

An influx of new residents is pushing demand, and Huffman said homebuilders appear to be slowing their construction rates due to an increase in construction material prices caused by tariffs put in place by the Trump administration.

She said that those factors will push home prices upward even faster.

"And upward not necessarily because our economy is strong, which is a little concerning. We'd rather that they were going up because of [economic conditions], not because of the actual cost of building."

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