Southern Arizona's Tucson is growing noticeably slower than Phoenix. According to the recently released regional economic forecast, the population growth rate in the Tucson metropolitan area is expected to gradually slow from 0.7% in 2025 to 0.6% in 2026 and 0.5% in 2027. While there is still an influx of people, the pace is clearly becoming more gradual.

The backbone of Tucson's economy is the defense and aerospace industry. The missile system production facilities of Raytheon (RTX) and Davis-Monthan Air Force Base account for a significant portion of local employment, and the optical and sensor research cluster centered around the University of Arizona continues to attract related startups and partners. There is also a gradual increase in biotech and aerospace component-related spin-off companies centered around the university campus. Recently, discussions about attracting new aerospace testing facilities have occasionally appeared in local media.

At the local level, there have been forecasts of gradual job growth over the next few years, but the latest data shows that the job growth rate in the Tucson metropolitan area is expected to remain at 0.1% in 2025 and 0.2% in 2026. While the direction of growth is correct, the pace is slow, indicating that Tucson's economy has not yet succeeded in attracting clear new industries. While income growth rates are gradually rising, particularly in high-skilled defense and aerospace jobs, wage increases in the service sector appear to be relatively limited.

Looking at the housing market, as of April, the median home price in Tucson remained around $365,000, showing little change from the previous year, and the number of new housing permits has also decreased in total. This suggests that it is not a market with rapidly increasing demand, but conversely, it can be interpreted as a sign of low risk for price surges, which may not be a bad signal for investors who prioritize stability. The pace of rent increases is also relatively slow compared to Phoenix, which could work in favor of investors approaching from a cash flow perspective.

In terms of infrastructure, discussions are underway regarding the expansion of the Tucson Modern Streetcar line and the I-11 highway connection project, which are expected to improve logistics and commuting connectivity with Phoenix once completed. However, such large projects often take time to break ground, making it difficult to expect short-term results. The local chamber of commerce has expressed hope that once this connectivity improvement is completed, the growth momentum of the Phoenix metropolitan area could extend to Tucson.

There is a cautious perspective regarding long-term growth potential. While there is a stable foundation in defense and aerospace, the slow pace of attracting new industries leads to a view that Tucson is more of a stable city rather than a high-growth city in regional economic analysis. However, the influx of young people and research and development capabilities unique to a university town are evaluated as potential factors for attracting new industries in the long run.

For Korean households, Tucson is a market with lower entry barriers compared to Phoenix. The rental demand near the University of Arizona is steady, and the relatively low cost of living is an attractive factor for households considering settling down after retirement. However, given the slow job growth rate, it is more realistic to approach with a focus on stable rental income rather than capital gains, and keeping an eye on properties near college areas with student rental demand is also a strategy. Discussions about expanding cargo handling capacity at Tucson International Airport are also mentioned as factors that could contribute to broadening the base of logistics and aviation-related jobs in the long term.

Over a ten-year timeline, Tucson seems likely to continue a gradual but steady growth rather than explosive growth. With a stable foundation in the defense and aerospace industry, the likelihood of a sharp downturn is low, but it is also important to view the market as one that is unlikely to see dramatic rebounds.