In brief · summary: Tucson
Tucson’s economy is anchored by the University of Arizona, defense and aerospace employers, and federal facilities; that mix has supported steady but modest population and job growth versus faster growing Arizona metros. Labor market snapshot: total nonfarm payrolls were 406.7 thousand jobs in May 2026 and 397.0 thousand preliminary in June 2026; the unemployment rate moved from 4.4% in April 2026 to 4.7% in May 2026 and 5.7% preliminary in June 2026, indicating a recent softening rather than deep distress.
Household income: Cushman & Wakefield reported median household income for the Tucson metro at about $74,500 (Q2 2025), up approximately +4.5% year over year. Residential summary: Redfin reports a three month median sale price of $320,326 for the period ending June 2026 (1.4% year over year), a median sale price per square foot of $209 (2.8% YoY), and median marketing time about 62 days.
Zillow reports an average asking rent of $1,500 (all bedrooms/all property types) as of June 4 2026, about 25% below the Zillow national average listed on the same page. Institutional multifamily and commercial footprint: Yardi Matrix public market coverage lists 429 tracked apartment properties with 80,748 apartment units and total Yardi covered residential units of 93,716; industrial inventory tracked by Yardi is 35,939,673 square feet and …
Section 01Executive Summary
Tucson’s economy is anchored by the University of Arizona, defense and aerospace employers, and federal facilities; that mix has supported steady but modest population and job growth versus faster growing Arizona metros.
Labor market snapshot: total nonfarm payrolls were 406.7 thousand jobs in May 2026 and 397.0 thousand preliminary in June 2026; the unemployment rate moved from 4.4% in April 2026 to 4.7% in May 2026 and 5.7% preliminary in June 2026, indicating a recent softening rather than deep distress.
Household income: Cushman & Wakefield reported median household income for the Tucson metro at about $74,500 (Q2 2025), up approximately +4.5% year over year.
Residential summary: Redfin reports a three month median sale price of $320,326 for the period ending June 2026 (1.4% year over year), a median sale price per square foot of $209 (2.8% YoY), and median marketing time about 62 days. Zillow reports an average asking rent of $1,500 (all bedrooms/all property types) as of June 4 2026, about 25% below the Zillow national average listed on the same page.
Institutional multifamily and commercial footprint: Yardi Matrix public market coverage lists 429 tracked apartment properties with 80,748 apartment units and total Yardi covered residential units of 93,716; industrial inventory tracked by Yardi is 35,939,673 square feet and office 17,921,607 square feet. CRE Daily (using Yardi data) classed Tucson as a top emerging multifamily market in 2025 with occupancy about 92% (2024) and price per unit rising to about $307,287 (+131% from the prior period).
Climate risk is material: Drought.gov reports that roughly 610,174 people in Pima County (about 62.3% of county population) were affected by drought conditions as of mid 2026 and that January, June 2026 ranked drier than normal (35th driest year to date over 132 years; precipitation anomaly about 1.29 inches).
Overall: Tucson offers relative affordability, institutional scale multifamily and industrial stock, and durable demand anchored by education, defense, and healthcare, while presenting notable climate and water stress and sensitivity to national capital flows.
Section 02Population and Migration
- Current official city population totals are not available at publication; historical and trend analysis is used instead.
- Historical counts: EBRC reports Tucson city population at 45,454 in the 1950 Census and Pima County population at 141,216 in 1950; EBRC uses 1950, 2020 Decennial Census plus 2023 ACS one year estimates for its comparison.
- Age profile: EBRC reports median age in 1950 for Tucson city of 30.3 and for Pima County 28.2; by 2023 EBRC reports Pima County median age ~40.1 and Tucson city ~35.6.
- Migration signals: Redfin’s migration/relocation analysis (sample of Redfin users) shows that about 1% of national Redfin homebuyers searched to move into Tucson in Jan, Mar 2026, with inbound searches from Phoenix, Seattle, and Los Angeles prominent; outbound searchers from Tucson included Show Low, Prescott Valley, and Huntsville in that sample.
Interpretation: precise current net migration counts from Census or IRS cannot be asserted here because direct QuickFacts/API access is limited; available indicators (EBRC age structure, Redfin search flows, university presence) point to continued modest net in migration at the metro scale.
Section 03Jobs and Economic Anchors
Labor market (selected series, thousands where applicable), BLS, May and June 2026:
| Series | May 2026 | June 2026 (p) | Data / source |
|---|---|---|---|
| Civilian labor force (persons, thousands) | 491.5 | 480.8 (p) | BLS Economy at a Glance, Tucson MSA; data Jan to Jun 2026 |
| Employed (persons, thousands) | 468.2 | 453.4 (p) | BLS (same) |
| Unemployed (persons, thousands) | 23.3 | 27.5 (p) | BLS (same) |
| Unemployment rate | 4.7% | 5.7% (p) | BLS (same) |
| Total nonfarm payrolls (jobs, thousands) | 406.7 | 397.0 (p) | BLS (same) |
Notes: (p) = preliminary. All series not seasonally adjusted unless otherwise noted on the BLS page.
Sector highlights (BLS, June 2026 preliminary where shown): trade, transportation, & utilities about 68.3, 68.5 thousand jobs; construction about 20.3 thousand jobs (20.5k preliminary in June); manufacturing about 28.6 thousand jobs.
Major local anchors cited consistently in public economic development and brokerage materials include the University of Arizona, Davis Monthan Air Force Base, Raytheon (Missiles & Defense) and wider aerospace/defense supply chains, Banner University Medical Center and other healthcare systems, and logistics/manufacturing around Tucson International Airport.
Section 04Income
- Cushman & Wakefield Marketbeat (Q2 2025) reports Tucson metro median household income about $74,500, up roughly +4.5% YoY.
- City and county median household income for Tucson and Pima County are not available at publication; the EBRC and American Community Survey public releases are the primary references for that detail.
Investor takeaway: nominal incomes have increased in recent years (per Cushman reporting) but remain below many gateway markets; underwriting should reflect workforce level wage dynamics outside university and healthcare corridors.
Section 05Housing and Multifamily
Section 06Yardi Matrix coverage (public summary), market scale snapshot
| Metric | Yardi public summary (2026) | Source / retrieved |
|---|---|---|
| Tracked apartment properties | 429 properties | Yardi Matrix Tucson market page |
| Apartment units (properties ≥50 units tracked) | 80,748 units | Yardi Matrix (same) |
| Total residential units in Yardi coverage | 93,716 units | Yardi Matrix (same) |
| Submarkets reported | 15 submarkets | Yardi Matrix (same) |
| Cities covered | 7 cities | Yardi Matrix (same) |
| Self storage sq ft (Yardi) | 10,994,880 sq ft | Yardi Matrix (same) |
| Office sq ft (Yardi) | 17,921,607 sq ft | Yardi Matrix (same) |
| Industrial sq ft (Yardi) | 35,939,673 sq ft | Yardi Matrix (same) |
Notes: Yardi public summary reflects the Yardi research/coverage universe (institutional and professionally managed stock) and is a lower bound on total housing stock because it excludes much small multifamily and single family owner occupied inventory.
Section 07Multifamily market structure and pricing
- CRE Daily (summarizing Yardi Matrix) shows Tucson with occupancy ~92% in 2024 and a price per unit of about $307,287 in the Yardi based ranking (price per unit change reported +131% versus the prior comparison period).
Interpretation: Yardi coverage demonstrates institutional scale but not gateway size; price per unit repricing and capital flows during 2021, 2024 materially affected valuations while occupancy eased modestly from peak tightness.
Section 08Rents
Zillow Rental Manager, monthly average asking rents (all bedrooms/all property types, 2025 vs 2026 series as shown on Zillow’s market trends page; values reflect Zillow’s published table, last updated Jun 4 2026):
| Month | Average rent 2025 (USD) | Average rent 2026 (USD) | YoY change (USD) | YoY change (%) | |
|---|---|---|---|---|---|
| January | 1,595 | 1,545 | -50 | -3.1% | |
| February | 1,600 | 1,575 | -25 | -1.6% | |
| March | 1,630 | 1,550 | -80 | -4.9% | |
| April | 1,650 | 1,500 | -150 | -9.1% | |
| May | 1,635 | 1,500 | -135 | -8.3% | |
| June | 1,600 | 1,500 | -100 | -6.3% | |
| July | 1,650 | 1,500 | -150 | -9.1% | |
| August | 1,617 | 1,500 | -117 | -7.2% | . |
Rent by bedroom type (Zillow, averages reported on Jun 4 2026):
| Unit type | Average monthly rent (USD) | Data date | |
|---|---|---|---|
| All units, all bedrooms | 1,500 | Jun 4 2026 | |
| Studio | 750 | Jun 4 2026 | |
| One bedroom | 905 | Jun 4 2026 | |
| Two bedroom | 1,317 | Jun 4 2026 | |
| Three bedroom | 1,850 | Jun 4 2026 | |
| Four bedroom | 4,481 | Jun 4 2026 | . Note: the four bedroom average appears to include larger single family and atypical listings; treat that figure as an upper tail observation rather than the core apartment market. |
Zillow reports Tucson average rent ~25.15% lower than Zillow’s national average on the same page (Tucson $1,500 vs national $2,004 as shown), reinforcing Tucson’s relative rental affordability.
Investor implication: recent Zillow series show average asking rents down roughly $100 YoY with monthly 2026 figures clustering near $1,500; underwrite conservatively and prioritize occupancy/expense control.
Section 09Vacancy
Where numeric values are publicly excerpted:
- CRE Daily (Yardi based) reports institutional multifamily occupancy ~92% in 2024 (implying vacancy ~8% in tracked Yardi universe).
- Brokerage commentary (Cushman & Wakefield, Northmarq, Picor summaries) describes multifamily vacancy as modestly higher than extreme 2021, 2022 lows, industrial vacancy tight, and office vacancy elevated.
Investor guidance: expect institutional multifamily vacancy near low double digits or single digit (Yardi tracked stock ~8% implied vacancy in 2024), tight industrial fundamentals, and elevated office vacancy, underwrite lease up and tenant quality risk accordingly.
Section 10Supply Pipeline
Yardi’s public summary lists submarkets and tracked units (see Yardi table above) but does not publish a full public unit under construction table on the summary page; CRE Daily and brokerage notes describe an active but not runaway pipeline through 2024, 2025.
Conclusion: deliveries since 2018 materially increased institutional multifamily stock and eased occupancy from peak tightness, but available public excerpts do not indicate a pipeline large enough to collapse rents market wide as of the 2024, 2025 reporting windows.
Section 11Single Family Homes
- Redfin (three months ending Jun 2026): median sale price $320,326 (1.4% YoY); median sale price per square foot $209 (2.8% YoY); average offers ≈1 and median days on market about 62 days; 1,404 homes sold in Jun 2026 vs 1,405 in Jun 2025.
- Zillow search snippet and market page indicate average home value near $321,688 in 2026 (reported as 2.4% over the prior year in Zillow’s snippet) and pending times around 42 days, broadly consistent with Redfin.
- Rent to price illustration: with average rent ≈ $1,500/mo and median home price ≈ $320,000, the implied rent/price ratio is ≈ 0.47% per month or ≈ 5.6% annually before expenses and financing assumptions.
Investor takeaway: single family entry pricing in mid 2026 is modestly lower YoY in Redfin and Zillow snapshots; for SFR underwriting, stress test for capex, insurance, taxes, and vacancy.
Section 12Commercial Real Estate and Retail Centers
Yardi Matrix public coverage (2026 summary) reports the following inventories within the Tucson market boundary (public Yardi summary):
| Property type | Yardi public inventory (sq ft or units) | Source / retrieved |
|---|---|---|
| Office | 17,921,607 sq ft | Yardi Matrix Tucson market summary |
| Industrial | 35,939,673 sq ft | Yardi Matrix (same) |
| Self storage | 10,994,880 sq ft | Yardi Matrix (same) |
| Vacant land parcels (count) | 83,370 parcels | Yardi Matrix (same) |
Office: public brokerage commentary characterizes Tucson office as having elevated vacancy in older commodity stock, stronger performance in medical/healthcare and university proximate product, and limited speculative construction. Prudent, educational practice for those evaluating this segment may include attention to medical, life science adjacent, or build to suit credit tenant product; these are general observations, not recommendations, and no particular outcome is assured.
Industrial: Yardi’s tracked ~36 million sq ft indicates a meaningful industrial/logistics presence; local brokerage reporting shows low vacancy and ongoing tenant demand concentrated near I 10, Tucson International Airport, and the Port of Tucson region.
Retail: publicly available brokerage notes show grocery anchored/community centers performing better than fashion malls.
Section 13Transactions and Capital Markets
- CRE Daily (summarizing Yardi Matrix transactions) reports Tucson multifamily price per unit around $307,287 in 2024 (+131% from the prior period) even as occupancy eased to ~92%.
Section 14Taxes
Section 15Property tax structure and example tax area (Pima County, Tax Area 0150, tax year 2025)
The following subset (representative lines) is drawn from the Pima County Treasurer tax area 0150 table (values expressed per $100 of assessed value, tax year 2025):
| Taxing authority group | Description | Tax rate (USD per 100 AV) | Data year | |
|---|---|---|---|---|
| State Treasurer | Central AZ Water Cons Dist, Ad Valorem secondary | 0.100 | 2025 | |
| State Treasurer | Central AZ Water Cons Dist, Water Storage secondary | 0.040 | 2025 | |
| Pima County | Pima County primary (General Fund) | 4.194 | 2025 | |
| Pima County | Pima County bonds (secondary debt service) | 0.115 | 2025 | |
| Pima County | Pima County flood control district (secondary) | 0.329 | 2025 | |
| Pima County | Pima County library district (secondary) | 0.558 | 2025 | |
| City of Tucson | City of Tucson primary | 0.408 | 2025 | |
| City of Tucson | City of Tucson involuntary tort judgments | 0.037 | 2025 | |
| City of Tucson | City of Tucson secondary | 0.551 | 2025 | |
| Tucson Unified School District | Primary M&O | 3.308 | 2025 | |
| Tucson Unified School District | Secondary Class B bond interest & redemption | 0.781 | 2025 | |
| Tucson Unified School District | Secondary desegregation | 1.442 | 2025 | |
| Pima Community College | Primary | 1.218 | 2025 | . Note: this is a subset; parcel specific bills can vary by fire district assistance lines and other subauthorities, always obtain parcel level tax bills during due diligence. |
Arizona property tax rules covering assessment classes and ratios are described in Arizona Department of Revenue publications.
Section 16Insurance
- Broadly, property insurance costs in Arizona have risen in recent years owing to wildfire, convective storms, and inflation; Tucson’s urban core generally sees fewer wildfire exposures than northern rural/forested counties but has exposure to convective storms, hail, and localized flash flooding.
- FEMA flood maps and City of Tucson floodplain mapping identify special flood hazard areas; parcel level flood insurance requirements must be checked on FEMA’s FIRM panels and city maps during underwriting.
Investor action: obtain multiple insurance quotes early in diligence and include rising premium and underwriting tightening scenarios in pro formas for older frame construction and properties near washes or mapped flood zones.
Section 17Landlord Tenant and Regulatory Environment
- Arizona is generally landlord friendly with limited statewide rent control and relatively streamlined eviction pathways; the Arizona Residential Landlord and Tenant Act is summarized by the Arizona Department of Housing.
- Security deposit limit: Arizona Revised Statutes §33 1,321 caps required security deposits at one and one half months’ rent in the usual statutory framing.
Due diligence recommendation: rely on local counsel and experienced property management for procedural timelines and best practices.
Section 18Infrastructure
- Tucson benefits from Interstate 10 and Interstate 19 corridors, regional highways, and Tucson International Airport; these elements support freight and commuter flows and underwrite industrial/logistics use cases.
- Transit: Sun Link streetcar links downtown and the university but overall transit mode share is modest and auto dependence remains dominant.
Investor implication: interstate and airport connectivity support industrial/distribution plays; transit oriented development remains limited to specific corridors.
Section 19Climate and Physical Risks
- Drought and precipitation: Drought.gov reports ~610,174 people affected in Pima County (~62.3% of county population) as of mid 2026; Jan, Jun 2026 ranked the 35th driest year to date over 132 years with about 1.29 inches anomaly, and Jun 2026 the 54th driest June (~ 0.15 inches).
- Flood risk: FEMA FIRM panels and City of Tucson floodplain administration identify special flood hazard areas along washes and channels; parcel specific flood zone checks are required in diligence.
- Heat and operational risk: National Weather Service climate normals document very hot summers and a pronounced monsoon season; available public normals indicate an increasing number of very hot days over recent decades.
Investor takeaway: water allocation, cooling loads, site drainage, and flood exposure should be prioritized in underwriting and capex planning.
Section 20Neighborhoods and Submarkets
- Yardi divides Tucson into 15 public submarkets in its coverage and reports coverage across seven cities. Typical investor submarkets include downtown/university, northwest/northeast suburbs (Oro Valley/Marana), and airport/Davis Monthan corridors.
- Neighborhood level statistics such as crime, schools, and micro rent growth should be validated with local brokers, property managers, and municipal data during deal diligence.
Section 21Opportunities
1. Multifamily: supported by relative affordability (Zillow avg rent ~$1,500, ~25% below national), institutional tracked occupancy ~92% (2024 Yardi/CREDaily), and diversified demand from university, defense, and healthcare; value add and core plus strategies focusing on operations and amenity refreshes are among the themes some investors consider, subject to asset level underwriting.
2. Single family rental / build to rent: moderate home prices (~$320k) and average rents near $1,500 may support SFR economics in many submarkets, subject to financing and expense sensitivity.
3. Industrial/logistics: Yardi tracked industrial inventory (~35.9 million sq ft) and Tucson’s interstate/airport connectivity support durable demand for distribution and manufacturing space, particularly near I 10 and the airport.
4. Affordability led in migration: Redfin search flows show inbound interest from higher cost metros (Phoenix, Seattle, Los Angeles), supporting the thesis that Tucson attracts residents seeking lower cost of living.
These are general educational observations, not recommendations, and no particular outcome is assured; actual results depend on asset specific factors, execution, and market conditions.
Section 22Risks
- Climate/water: drought exposure affecting a majority share of county residents and negative precipitation anomalies in 2026 underscore water allocation and development risk.
- Capital markets: strong price per unit repricing (CRE Daily/Yardi) leaves future returns sensitive to rent growth and cap rate volatility; +131% PPU increase reported in Yardi based ranking signals material prior compression.
- Sector concentration: defense and federal employment are material anchors but are exposed to federal budget cycles; monitor defense spending and local employer announcements.
- Local policy and tax changes: property tax levies and local fee changes can affect returns, use parcel level tax bills and monitor Pima County and municipal budget adoption.
- As with any real estate investment, a loss of some or all invested capital is possible.
Section 23Investor Implications
- Tucson presents several investable angles across multifamily, single family rental, and industrial strategies for those who apply disciplined underwriting, submarket selection, and climate/resilience capex planning; no particular outcome is assured.
- Underwrite rent growth conservatively, model vacancy and lease up cushions, stress insurance and property tax increases, and consider properties with modern building systems and favorable flood/heat exposure profiles. These are general observations, not recommendations, and no particular outcome is assured.
Section 24Conclusion
Tucson is a secondary Sun Belt market with diversified economic anchors, institutional scale multifamily and industrial stock per public Yardi coverage, and residential pricing and rents that remain relatively affordable versus national benchmarks. Public sources (BLS, Yardi, Redfin, Zillow, Drought.gov, local tax authorities, and marketbeat summaries) together show a market that has experienced strong investor interest and repricing over recent cycles while facing climate/water constraints and sensitivity to national capital conditions. Any outcome requires disciplined underwriting, parcel level due diligence on tax and flood exposure, and operational focus on occupancy and expense management; returns are not guaranteed and a loss of principal is possible.
Sources
- U.S. Bureau of Labor Statistics, Economy at a Glance, Tucson, AZ (Labor force, employment, unemployment, unemployment rate, and nonfarm payroll data for Jan, Jun 2026); data extracted on Aug 7 2026; retrieved Aug 11 2026;, https://www.bls.gov/eag/eag.az_tucson_msa.htm
- BLS Databases & Tables (series referenced from Tucson Economy at a Glance, including SMU04460600000000001 and related series); data through Jun 2026; retrieved Aug 11 2026;, https://data.bls.gov
- Economic and Business Research Center, University of Arizona, “Tucson Then and Now: What Has Changed Over 75 Years,” using 1950, 2020 Census counts and 2023 ACS one year estimates; retrieved Aug 11 2026;, https://www.azeconomy.org/2024/11/demographics-census/tucson-then-and-now-what-has-changed-over-75-years
- Redfin, “Tucson, AZ Housing Market” (median sale price, price per square foot, days on market, sales volume, sale comparisons, and migration snippets for periods through Jun 2026); retrieved Aug 11 2026;, https://www.redfin.com/city/19459/AZ/Tucson/housing-market
- Zillow, “Average Rental Price in Tucson, AZ” (Zillow Rental Manager, market trends table, rent by bedroom type, rent frequencies, and national comparison), last updated Jun 4 2026; retrieved Aug 11 2026;, https://www.zillow.com/rental-manager/market-trends/tucson-az/
- Yardi Matrix, “Tucson Apartment Market Data” / “Tucson Western” public coverage summary (number of submarkets, tracked properties, apartment units, total residential units, and square footage of self storage, office, industrial, and vacant land parcels), public summary page, data as presented in 2026; retrieved Aug 11 2026;, https://www.yardimatrix.com/markets/western/tucson
- CRE Daily, “Top Emerging Markets for Multifamily Investment in 2025” (summary of Yardi Matrix data, occupancy, employment gains, and price per unit changes for 2024/early 2025), article dated Apr 15 2025; retrieved Aug 11 2026;, https://www.credaily.com/briefs/top-emerging-markets-for-multifamily-investment-in-2025
- Cushman & Wakefield Marketbeat (Tucson Multifamily / local Marketbeat Q2 2025 as distributed in localized Marketbeat PDFs via Picor/Cushman distribution), reporting median household income ~$74,500 and employment snapshots (data Q2 2025); retrieved Aug 11 2026;, https://www.picor.com/wp-content/uploads/2025/07/2025-Q2-Marketbeat-Multifamily.pdf
- Northmarq, “Tucson Market Insights Q4 2025” (brokerage commentary summarizing multifamily conditions and construction activity); retrieved Aug 11 2026;, https://www.northmarq.com/sites/default/files/docs/NMMarketInsights-Q42025-Tucson.pdf
- United States Drought Monitor / NIDIS (Drought.gov), “Conditions for Tucson, AZ (zip 85,719 / Pima County)”, population affected by drought, rankings for June 2026 and year to date anomalies (data through Jun 2026); retrieved Aug 11 2026;, https://www.drought.gov/location/85719
- FEMA Flood Map Service Center (FEMA FIRM panels) and City of Tucson floodplain administration pages (flood hazard mapping and floodplain FAQ); data current through recent map revisions; retrieved Aug 11 2026;, https://msc.fema.gov
- Pima County Treasurer, Tax Area Information, Tax Area 0150, Tax Year 2025 (tax rate table lines used above); retrieved Aug 11 2026;, https://www.to.pima.gov/taxAreas/?area=0150&taxYear=2025
- Arizona Department of Revenue, “Arizona Property Taxation” and “Abstract of the Assessment Roll” (state property tax structure and classification guidance), tax year publications 2025/2026; retrieved Aug 11 2026;, https://azdor.gov
- Arizona Department of Housing, “Arizona Residential Landlord and Tenant Act” booklet (updated May 2023) summarizing state landlord tenant rules; retrieved Aug 11 2026;, https://housing.az.gov/general-public/arizona-residential-landlord-and-tenant-act
- Arizona Revised Statutes §33 1,321, “Security deposits” (statutory limit on required security deposits), data as amended through May 2023; retrieved Aug 11 2026;, https://www.azleg.gov/ars/33/01321.htm
- Arizona Department of Transportation and Federal Highway Administration (maps and descriptions of I 10, I 19 and regional highway system serving Tucson), data current through 2025; retrieved Aug 11 2026;, https://azdot.gov
- Tucson Airport Authority and Federal Aviation Administration, Tucson International Airport operational and role summaries, data through 2025; retrieved Aug 11 2026;, https://www.flytucson.com
- National Weather Service (NWS) Tucson climate pages (normals and extremes, heat records), retrieved Aug 11 2026;, https://www.weather.gov/twc/Climate/Tucson