New home construction

Homebuilding remains a viable market in the Greater Tucson Metro Area.

It’s a brilliant time to purchase new or existing real estate in Pima County, according to experts within the industry. 

Ginger Kneup of Bright Future Real Estate Research is confident in the potential for the county as a whole, pointing to a 12 percent jump in homebuilding, from 1,025 to 1,150 new home permits in the region from January to April of this year over the same period a year ago. 

Kneup believes the steady growth spurt stems from the region’s ability to lure new businesses, such as Caterpillar, as well as the expansion at the Raytheon facilities as key to the development splurge. 

She also believes that the city and county have done a good job of addressing excess building regulations that have slowed such growth in the past. 

“I think that the local municipalities have realized that there’s a lot that they can do that doesn’t cost them any money,” she said. “Just streamlining the processes, time is money, so if it takes an extra six months to get a subdivision to market, then that’s a huge burden for the builder. Our road system has to be improved, our interior roads are problematic in terms of jobs.”

Others, like Southern Arizona Homebuilders Association President David Godlewski, believe the region’s good luck stems from having towns and the county agree on a linear path forward for growth. 

Godlewski pointed to the elimination of excess property and building taxes and removing excess regulations, in combination with putting money toward road/infrastructure improvements, as reasons for the turning of the building tide.

“I think it’s overly simple, but everybody’s got to row the boat in the same direction,” he said. “I think from the city, the county, the private sector, the supporting towns—everybody’s got to unite to help promote and sell the benefits of Southern Arizona for new companies.” 

Kneup said the region’s growth stems mostly from new home development, resulting from a lack of inventory for existing homes in and around Tucson. 

She said that politicians around town waited far too long to address the region’s crumbling infrastructure, which drove away potential employers—though there’s a turning of the tide in that category of late. 

“We’ve kind of put it on the sidelines and that’s kind of how we got into this position,” Kneup said. “But there seems to be a realization at all levels that we’ve got to change what we’re doing to move forward, and that economic growth depends on these issues.”

For Godlewski, the road to eliminating excess regulation and obstacles for doing business has been long, though there have been positive steps towards creating a proactive climate for builders and potential residents alike. 

He wants to see more collaboration between the municipalities of Southern Arizona and the County Board of Supervisors on infrastructure and home building but thinks that both sides have taken steps towards progress on the subject. 

“I think there has been some progress, but I do think there’s some room to improve,” Godlewski said. “And I’d like to think that we’re going to work together to make progress, to make things better.”

The 12 percent jump in new home sales trails the national standard of 17 percent, collected by the U.S. Census Bureau between March 2017 and 2018. 

The average price for a home in Tucson has risen 10 percent over the last two years, according to data collected from the National Association of Realtors—from $168,909 in February, 2015 to $189,000 in February of this year. 

Godlewski doesn’t expect the region’s recent fortunes to turn anytime soon, thanks to continued development in and around Tucson. 

He believes the rate of growth might not be as explosive as in the past, but that this round of growth has the potential to be longer lasting and more complete than past surges. 

“I definitely think the momentum’s going to continue. I think on the new construction side it’s going to be a slow but steady increase year over year,” he said. “One of the other big factors in the performance is going to be our region’s ability to continue to attract new companies and to attract other companies to come to the area. Regarding Raytheon, we’ve had some new announcements, but they’re few and far between, and that’ll pick things up even further.”

Godlewski believes the slower, more sustained growth in the real estate market buoys confidence in the area, allowing the market to overcome obstacles that have been problematic in the past. 

“I think people are more confident in their economic situation, and the economic forecast for Southern Arizona is brighter than it has been,” he said. “So, people are more interested in moving and things like that, so the housing side certainly benefits from that.” 

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