Is Tucson’s Real Estate Market is Booming: What to Expect in 2025

Mar 7

A recent Realtor.com study predicts that housing prices nationwide will rise by 3.7% in 2025—a trend that aligns with the average yearly increase since 2012. But what’s even more noteworthy? Some U.S. cities are expected to see home prices skyrocket—and Tucson, Arizona, is near the top of the list.

If you’re thinking about buying, selling, or investing in Tucson real estate, here’s what you need to know about the 2025 housing market forecast and why Tucson is one of the hottest markets in the country.

Tucson Ranks #3 for Housing Price Growth in 2025

According to Realtor.com’s latest 2025 housing forecast, 16 U.S. cities are expected to experience double-digit home price growth, with Tucson ranking third on the list.

Top Cities for Housing Price Increases in 2025

1️⃣ Phoenix, AZ – 13.2% price increase expected
2️⃣ Colorado Springs, CO – 12.7% price increase expected
3️⃣ Tucson, AZ – 12.4% price increase expected

To put this into perspective, a $500,000 home today in Tucson could be worth $560,000 or more by the end of 2025. With such a strong appreciation rate, Tucson real estate is shaping up to be a prime investment opportunity.

Why is Tucson’s Real Estate Market Surging?

Tucson’s affordability and lifestyle continue to make it a magnet for homebuyers, especially in a time when larger cities are becoming unaffordable.

Here’s why Tucson’s market is heating up:

✅ Lower Housing Prices Compared to National Average

While Phoenix home prices have soared, Tucson remains more affordable—making it an attractive alternative for buyers priced out of bigger Arizona cities.

✅ Cost of Living is Lower Than Many Western Cities

Tucson offers a high quality of life at a lower cost, drawing in both young professionals and retirees.

✅ Booming Outdoor and Recreational Scene

Tucson’s year-round sunshine, national parks, hiking trails, golf courses, and cycling routes make it an ideal place for those seeking an active lifestyle.

✅ Top Retirement Destination

Tucson continues to be one of the most desirable cities for retirees, with growing 55+ communities in areas like Oro Valley, Dove Mountain, Green Valley, and Vail.

✅ Remote Work is Fueling Demand

Many homebuyers from California, Texas, and the East Coast are moving to Tucson thanks to remote work flexibility. Without the need to live in expensive metros, Tucson is an attractive, affordable alternative.

✅ Snowbirds & Second-Home Buyers

Winter visitors (snowbirds) continue to purchase homes in Tucson to escape harsh northern winters, further increasing demand.

How Tucson Compares to Other Markets

While Phoenix tops the list with a 13.2% projected home price increase, its home prices and cost of living have become increasingly out of reach for many buyers.

Tucson vs. Phoenix: Key Differences

When comparing Tucson and Phoenix, several key differences stand out. Tucson is expected to see a 12.4% increase in home prices in 2025, slightly lower than Phoenix’s projected 13.2% growth. However, Tucson’s median home prices are generally lower, making it a more affordable place to live. The cost of living is also lower in Tucson compared to Phoenix, where expenses tend to be higher.

Traffic in Tucson is lighter and more manageable, whereas Phoenix experiences heavier congestion due to its larger population and sprawling metro area. If outdoor recreation is a priority, Tucson offers mountains, hiking, cycling, and incredible dark skies for stargazing, while Phoenix, as a much larger city, has fewer nature escapes nearby.

Lifestyle also differs between the two cities. Tucson has a relaxed, laid-back atmosphere, whereas Phoenix is known for its fast-paced, busy environment. Whether you prefer a slower pace or the energy of a bigger city, each offers a unique living experience.

For those who want Arizona’s sunshine and outdoor lifestyle without Phoenix’s price tag and traffic, Tucson is the perfect alternative.

What’s Next for Tucson’s Housing Market?

With Tucson home prices expected to rise 12.4% in 2025, buyers and investors are keeping a close eye on the market. But what else should we expect in the upcoming year?

📈 Continued Home Price Appreciation – Expect strong demand and rising prices, especially in newer suburban developments.

🏡 More New Construction – As demand grows, builders are ramping up new home construction, particularly in Vail, Marana, and Oro Valley.

💰 Investor Interest Will Rise – With Tucson’s affordable prices and high rental demand, investors may snatch up properties, further tightening inventory.

🛑 Higher Mortgage Rates Could Slow Growth – If interest rates remain high, it may impact affordability, but Tucson's lower cost of living will still attract buyers.

The U.S. Economic Outlook & What It Means for Tucson

Nationally, economic predictions for 2025 are looking optimistic. According to Goldman Sachs, the U.S. economy is poised to outperform expectations, with:
✅ Lower inflation
✅ Strong job market
✅ Reduced recession fears

For Tucson, this means continued demand from out-of-state buyers—especially those retiring, relocating, or investing in second homes.

As long as people from more expensive states continue to relocate to Arizona, Tucson will likely remain a top real estate market for growth.

Should You Buy or Sell in Tucson in 2025?

If you’re thinking about buying, acting sooner rather than later could save you thousands. Prices are projected to keep climbing, meaning homes will only get more expensive.

If you’re thinking about selling, rising prices mean higher equity—making 2025 a great year to cash in on your property’s value.