The Effects of Phoenix’s Growing Population on the Housing Market
Phoenix, Ariz. - The Phoenix Metropolitan Area has been, and continues to be one of the fastest growing metropolitan areas in the United States. This growth has brought great opportunities as well as many challenges to the housing market. The increase of new residents that are attracted to all that Phoenix has to offer, whether it be the city's vibrant economy, the desert landscapes, or the sunny weather, has reshaped the real estate market in profound ways. Here is a closer look at how the growing population is affecting the housing market.
Increased Demand for Housing
The most commonly seen impact that the rising population has had on the area, is the need for housing. As more people are moving to Phoenix, the demand for housing has quickly surpassed the supply of housing in many parts of the metropolitan area. This has resulted in a very competitive market where houses do not sit on the market for long, receiving numerous enticing and competitive offers. For those that are potential or prospective buyers, this has more often than not led to an intense search process. There is a need to make decisions quickly and the possibility of competing in bidding wars. We have seen the days on market range consistently in 2024 while median sales price continues to rise.
The Rise in Home Prices
It is no surprise that the prices of homes have skyrocketed in recent years due to the demand so greatly surpassing the supply. This has made it challenging for many first-time buyers to find a property that is within their budget and area that they are looking for. While some sellers and investors are pleased by the boost in their properties value, there are some that are looking to relocate and are also finding this to be a challenge as well because their money will not go as far as it did when they made their purchase years ago. This pricing issue has also led buyers to look in different areas that are more affordable and not necessarily in the Phoenix Metropolitan area.
New Construction and Development
To try and meet the demand, developers have ramped up the number of new construction projects. These projects include more than just single-family homes, they are building apartments, condominiums and even mixed use complexes. This change also attracts a younger demographic who are not financially equipped to buy a home, but opt for renting or rent-to-own options as they look to secure an affordable home in the future.
Long-Term Effects
In the long-run, the sudden growth of the Phoenix area suggests that there will be many changes to the infrastructure and involvement from the community. With ongoing growth, it can be expected that there will only continue to be an increased pressure when it comes to traffic, schools, healthcare services, etc. which may require redeveloping and reshaping the planning efforts within the Phoenix Metropolitan area communities so that they can adapt. Current residents have seen the vast expansions in developments in Glendale, Chandler, Gilbert and North Scottsdale in recent years. With the attractiveness of large companies looking to move, more jobs and opportunities are on the horizon, and the area will need to adapt and develop to keep up with the demand.
For potential homebuyers and investors, it is important that they understand the trends seen in regards to the housing market in Arizona so that they can make informed decisions. As the city evolves, staying informed will be key to ensuring that the Phoenix area remains a desirable place to live for those that continue to relocate here as well as those that have called Arizona home since the start. For agents, their duty to stay informed and pass information to their clients is paramount as the market continues to ev and flow.