Will White of Land Advisors Organization with regional housing development maps
TUCSON, AZ (April 11, 2025) -- Quarter 1 of 2025 is a wrap. Fresh on the heels of the big SAHBA/LAO Land and Housing Forecast, the Tucson housing market continues to find its way in 2025’s selling season. Signals are mixed on the national scene and in Southern Arizona. In what has become an annual tradition, we went to the source of land and homebuilders in Tucson, Will White of Land Advisors Organization -Tucson, this new year with new questions. With Q2 underway, we wanted to get Will's thoughts on where Tucson has been and where it might be headed. Will and his partner, John Carroll, at Land Advisors Organization - Tucson, represent most of Tucson’s large-scale master-planned communities and residential projects.
Q: First, the event was great, a who’s who of the homebuilding and land industry in Tucson. What were your thoughts?
White: "Those events are very important for the Tucson market. It was a packed house, and we hit a bunch of major topics we all are dealing with in Pima County. Evan from Zonda brought a bunch of detail and our panel was brilliant and one of the best in a long time. We really enjoyed collaborating on this with David Godlewski from SAHBA and look forward to doing more of these types of events in the future."
Q: Ok, one quarter under our belt, how do things look out there?
White: "Sales are higher this year than they were through the same time period last year. Closings are 30% higher, permits are down, and they are going to have to move up as homes need to get in the ground. We were short on inventory to start the year, and the volume and pace are higher than it was last year. Add in some material cost sensitivity, and I think the logical conclusion is that it is better to build now than wait and deal with uncertain pricing later. All in all, while most data is similar to where we were in 2024, it feels like momentum is growing. That is what we want to see!"
Q: How is the deal flow? What are you noticing?
White: "Deal flow is as expected for the start of the ‘selling season’. A significant amount of our offerings have already closed or are slated to close by Summer. This is in spite of some new record land pricing! More of our inventory will be released in Q2/Q3, and this will include several large-scale new projects and new, big phases of some of the best-known communities in town. Builders are looking to quickly secure what remains of available ‘shovel-ready’ lots, and I don’t see that changing for any time soon. It looks really good!"
Q: Last year, you were high on a couple of builders and their strategies. How about this year?
White: "Those builders got things done and were very effective, and I think now they will focus on working through their big hauls. The rest of our limited builders in town need to buy now to keep up, especially since we have a handful of builders from outside Tucson looking to buy in. If any builder in Tucson tells you they are ok on inventory past mid-2027, I would be skeptical."
"So you have the big 3 in Tucson that need lots to continue to feed their larger pipelines, you have the ones that are very short on lots for their business plan and will need to make some moves, and then you have the new builders to the market that are already contracting deals. Demand isn’t stopping; in fact, it is likely going to continue to grow."
Q: Who is selling the lots?
White: "Tucson’s table is largely set. The builders here know, and have relationships, with who delivers the lots. The master-planned communities sell 75%+ of the lots in Tucson, and – at present - Sunbelt Holdings, Diamond Ventures, Crown West, and Forestar are the giants as it relates to their delivery programs to homebuilders and future pipelines. If you don’t buy lots from them yet, you will likely be buying from them soon."
Q: The event was big on infrastructure for Southern Arizona. Give us a few thoughts on that.
White: "I have been studying the lot shortage and the infrastructure situation in Pima County for a decade. The post-pandemic era hit the fast-forward button on growth while infrastructure construction remained idle. Here’s an interesting fact: at present, we have 20,000+ lots being held off market until it is physically and economically viable to turn them on, making it critical that we expedite regional infrastructure! I’m not exaggerating when I say infrastructure is the main component now affecting the region’s affordability. It’s no longer just 'if' solutions come, it is now 'how long' will it take to construct those solutions?"
Q: Where is the growth and the momentum?
White: "Plain and simple, all growth is logically being funneled into the areas that have the infrastructure. Right now, areas that are moving and have a path to grow are north Marana, Southeast/Vail, and the Southwest submarket. It’s no surprise that these areas are the focus of the homebuilders as they always will follow the path of least resistance. Go where the lots are ready and more will be coming!
Q: LAO has been leading the charge in Tucson for more than two decades. How do you maintain your large market share and stay ahead?
White: "I always figured we are 'ALL IN' anyway, so why not press the pace. Despite some of the previously mentioned challenges facing Tucson – and they are real challenges, we enjoy moving the needle here. Our daily discussions are about how to put our clients in the best spot to succeed and give them an advantage in the market. For LAO Tucson, if we execute that, the market share and the volume take care of itself. We have been here a long time and have a good formula that is hard to replicate."
Q: Okay, it's time for the crystal ball. What do you see for the balance of the year?
White: "I see permits at about the same as last year, so around 4,300. As it picks up this summer, and due to the limited offerings, I think finished lot prices will increase somewhere in the neighborhood of 15% over the next 6 months. Until we balance the supply, prices will stay elevated. While we have our challenges, the Tucson metro area is balanced and – in my opinion – is on sound footing!"