Navigating Arizona Real Estate in 2025: Opportunity Meets Uncertainty
Navigating Arizona Real Estate in 2025: Opportunity Meets Uncertainty
By Dan Noma Jr., CEO, Easy Street Offers
As we move deeper into 2025, Arizona remains fertile ground for real estate investors—from those just launching their first deal to seasoned pros closing nine-figure portfolios. But with shifting federal policy, state legislation, and market trends, the landscape is changing fast. Here’s some shifts to keep in mind and help you stay ahead:
1. Federal “One Big, Beautiful Bill” (H.R. 1): A Mixed Blessing
President Trump’s new fiscal package (dubbed the “One Big Beautiful Bill”) packs powerful tools for savvy real estate investors:
Permanent 100% bonus depreciation & elevated Section 179 expensing (now up to $2.5 million) can turbocharge cash flow by allowing accelerated writeoffs of property and equipment.
Deducting up to 20% of qualified business income sharpens aftertax returns.
Programs like Opportunity Zones, LowIncome Housing Tax Credit, and New Markets Tax Credit are now permanent—great news for value-add and affordable housing plays.
Action Tip: If you’re repositioning multifamily, commercial, or productionadjacent properties, run a cost segregation study and deploy Section 179 and bonus depreciation to supercharge earlyyear tax benefits.
2. Clean Energy RollBacks: Costs & Prospects
Despite the incentives from H.R. 1, broader federal moves are rolling back clean energy credits—a blow to solar, wind, and EV-related property upgrades. For Arizona investors:
The 30% solar tax credit expires in December, rather than 2036—meaning less time to secure deals tied to green upgrades.
Renewables developers are hitting pause: fewer local installs, halted projects, and even layoffs in solar manufacturing and construction.
Utility rate hikes—APS is seeking ~14%—putting pressure on landlord operating costs.
Action Tip: For retrofit or new-build projects, front-load energy-efficient upgrades now to maximize existing credits. And always build worst-case APS escalators into your pro forma.
3. Tariff Volatility & Construction Cost Risk
President Trump’s reinstated tariffs on Canadian and Mexican materials (recently paused) have introduced volatility into construction budgets. That uncertainty alone is spooking developers and investors. Even unannounced policy shifts can stall deals.
Action Tip: Include escalation clauses in contracts, build cushion into cost estimates, and keep material substitutions in your back pocket to stay nimble.
4. Local Zoning & Renewable Permitting Pressure
Arizona lawmakers are now weighing restrictions on both large renewables and construction near residential zones—another variable that sophisticated investors must monitor.
Action Tip: Track county-level renewable and zoning legislation. Being proactive by attending meetings and building strategic relationships can make or break rooftop or retrofit plays.
5. Investor Mix: What Beginners & Veterans Should Do Now
New Investors: Educate yourself on tax strategies…bonus depreciation, Sec 179, Opportunity Zones. Partner with advisors who understand H.R. 1 potential in Arizona.
Sophisticated Pros: Revisit cost segregation strategies across portfolios. Reassess contingency buffers considering energy rollbacks and tariffs. Push further into affordable housing given the permanence of LIHTC/OZ benefits.
Bottom Line: Arizona remains a real estate powerhouse…but the rules are shifting. To thrive:
Maximize new tax tools (bonus depreciation, Sec 179, QBI).
Frontload efficiency projects while credits remain.
Mitigate risk through material cost clauses and zoning awareness.
Invest in learning, staying ahead of federal and state policy drifts.
Remember what we say on our weekly podcast, Behind the Doors… success isn’t just about finding good properties—it’s knowing how to structure deals, protect margins, and adapt faster than the market. With the right playbook, you can turn legislative change into opportunity.
Let’s keep pushing Arizona real estate to new heights. Onward and upward!
— Dan Noma Jr.