About 20 years after homes first went up in Star Valley, the community on Tucsonβs far southwest side has become one of the top subdivisions in the region.
Two national homebuilders just bought 272 finished lots in the southern portion of the development, near Valencia and Wade roads.
Envisioned as a 7,000-home community, Star Valley has nearly 2,000 existing homes and a new park.
"Star Valley has emerged as one of the most active master-planned communities in Tucson,β said Will White, who runs the Tucson office of Land Advisors Organization and handles the marketing of the lots at Star Valley. βWe have sold more lots there in the past three years than most projects in Tucson.β
He said there are currently four homebuilders actively selling there.
Lennar Homes recently bought 81 lots, and Meritage Homes bought 191 lots.
Both builders are already active in Star Valley and bought for future phases.
The subdivision has 1,879 existing rooftops and is being developed and prepared for homebuilders by Scottsdale-based Sunbelt Holdings.
White said more than 900 lots have been bought by homebuilders in Star Valley in the past 18 months.
He credited the developer for keeping momentum alive at Star Valley by having lots βshovel readyβ for homebuilders so they donβt have to wait on infrastructure additions to start putting up walls.
βItβs simple, homebuilders buy land where they are successful," he said. βStar Valley is a successful and established master-planned community.β
Meritage is building three- and four-bedroom models that start at around $375,000. Lennar also has three- and four-bedroom models with prices starting at $335,000.
Those prices are a big draw as the Tucson areaβs average new home price rose to more than $495,000 at the end of 2023.
The subdivision and surrounding housing developments are getting more retail popping up along West Valencia Road, with the closest grocery being a Walmart Neighborhood Market near Cardinal Avenue and a Walmart Supercenter near Midvale Park Road.
The southwest Tucson market includes the large retail centers at Irvington Road and Interstate 19, where a Sprouts Farmers Market recently opened.
There is nearly 60,000 square feet of retail in the works.
Retail brokers say grocery stores consider a new location when a subdivisionβs population tops 10,000 residents. According to Census data, the average household in Tucson is 2.34 people and, if that holds true for Star Valley, there are about 4,300 residents.
Star Valley is approximately 15 miles from Interstate 19 along Valencia Road, which is dotted with convenience stores, retail shops and both chain and local restaurants.
No relief in sight
No relief in home prices is expected in the next two years, as the housing shortage remains.
Housing analyst Jim Daniel, with R.L. Brown Housing Reports, expects the Tucson market to attract new homebuilders because of the growing number of jobs.
βIt will be interesting to observe how these newcomers will position their products to compete effectively, especially if they don't recognize the particular nuances of the market segmentation in the metro Tucson area,β he said.
The Tucson area ended 2023 with 3,706 permits for new homes, about 4% more than 2022.
By comparison, homebuilders pulled 11,762 permits in 2005; 8,579 in 2006 and 5,098 in 2007 leading up to the housing crash in 2008.
The lowest year for permitsΒ β since 1995Β β was in 2011, when homebuildersΒ pulled 1,438.
βWe anticipate new home closing activity in the region in the range of 3,000 to 3,800 homes each of the next four years and consider that a viable new home marketplace,β Daniel said. βWe can anticipate additional efforts on the part of the home-building community to generate more affordable new housing, especially in the peripheral areas of the region where land cost can allow less expensive new housing activity.β
