Last Friday Forbes ranked the Phoenix-Mesa-Glendale Metro area (“Phoenix Metro Area”) as the 8th fastest growing large city in the nation, behind Austin, Houston, Dallas, Raleigh, Salt Lake City, Seattle and Provo. Although population growth was only 1.0% in 2012, it is expected to increase 2.7% in 2013. As a frame of reference, Maricopa County’s population grew 24.2% between 2000 and 2010 reflecting an increase of 2.4% per annum.
A recent article written by Bruce Hilby, who has purchased and developed land in the West Valley over the last 35 years, stated “Metro Phoenix’s 2.7% population growth projected for 2013 is the fourth highest of any city in the nation. This is the primary driver of housing demand and if true, it suggests to me that we are not currently building nearly enough housing in the area to cope with the influx. The Phoenix Metro Area had a population of 4,192,887 in the 2010 Census. 2.7% growth represents more than 113,000 people who would typically require more than 43,000 homes.
To put this in perspective, in 2012 developers sold fewer than 10,000 new homes (single family & condo) in Maricopa and Pinal counties. Even though this was a 34% increase over 2011 and growth is expected in 2013, the Forbes projection implies a significant housing shortage.”
Is the Phoenix Metro Area poised for an economic recovery?
I believe the answer is yes. Historically housing shortages caused by population growth have led us, the Metro Phoenix Area, out of recessions because each new home built creates an average of three jobs for a year and generates about $90,000 in tax revenue. Let’s hope that Forbes’ projections are accurate.
By Gary Ringel, CGREA