According to the latest data from the US Census Bureau, Phoenix has maintained its ranking as the third largest metropolitan area in the country for net migration for the third year in a row.
Multi-family landlords and homeowners welcomed the nearly 89,000 people who moved to the Phoenix Market between July 2019 and July 2020. The influx of new residents, equaling an average of 244 people per day, has sustained robust demand for housing and created unshakable housing rental growth and price increases for single-family homes.
With just over 5 million inhabitants, Phoenix is the tenth largest metropolitan area in the country. The Valley of the Sun has seen tremendous growth and the value proposition that brings new residents and businesses to market has strengthened. Last year, Phoenix’s population grew by 106,008 people, beating the market’s 10-year average of 85,562 people.
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Since the pandemic, more and more people are leaving expensive, dense, and highly regulated cities to find cheaper markets that give them a higher quality of life. New York, Los Angeles, Chicago, and San Francisco saw negative net migration last year, while Sun Belt markets like Phoenix saw the largest gains. The increase in remote working policies since the pandemic began has also resulted in a more mobile population, which has drawn more people to Phoenix.
flat Developers have been active in the Phoenix market trying to keep up with the demand for housing. Last year, however, the new supply lagged behind demand and vacancy rates fell to a record low. The imbalance between supply and demand is also present in the single family sector. The low inventory of single-family homes has forced new Phoenix residents who may be homeowners into the tenant pool, which supports rental growth. The rents for apartment buildings have increased by 11.8% in the past 12 months. This puts Phoenix in second place after the Inland Empire in terms of rental growth in the nation among the major markets.
It is not only residential construction that benefits from population growth. The Industrial market 2020 saw its best year of demand as the growing consumer base required more warehouse and logistics space to store and move goods to Phoenix homes.
Retail leasing This was also evident late last year as tenants expanded into areas of the market where household growth was the greatest.
While Office area During the pandemic, companies struggled to keep posting job postings in Phoenix over the past year, citing the large and growing workforce as the main driver behind their location decision.
The article was originally published on CoStar on May 6, 2021. Jessica Morin is Director of Market Analytics – Arizona at the CoStar Group.
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