Is Phoenix Arizona’s Growth Sustainable?

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It is truly hard to believe what has happened in Greater Phoenix over the past 5 years.  While many Phoenicians were caught “flat footed” with the wave of out of state investors in 2004 and 2005 it appears that the real estate market has gone through a tremendous absorption of a huge investor sell-off.  While many predicted the collapse of the residential real estate market it is quite obvious that the predicted collapse was actually a minor correction. 

Every significant real estate collapse has been historically tied to jobs and negative migration.  It is clear that when communities lose jobs negative migration soon follows then the residential real estate market collapses.  Phoenix Arizona is quite the opposite.  With over 190,000 people migrating a year to the Phoenix metropolitan area it is obvious that there is still tremendous demand.  Especially considering a new housing unit is needed for every 2.7 people.  That is over 70,000 new units per year needed to maintain the population growth.

With the job estimates continually being revised upward since 2002, Phoenix is becoming more and more a popular relocation destination.  In 2006, Greater Phoenix created a record 106,900 new jobs!!!  To put those numbers into perspective, Greater Phoenix was responsible for 1 out of every 25 new jobs created in the entire country for 2006.  It is not just jobs it is the type of jobs.  In 2006 the largest sector of growth in Greater Phoenix at 21.3% was “Professional and Business Services”.  So, not only is Phoenix growing new jobs it is the high paying type of jobs that are being created.  By comparison, Los Angeles County created only approximately 85,000 new jobs. Considering the disparity of the population the ratio is significant.

Mesa, Arizona a suburb of Phoenix now posts a greater population than Cleveland, OH and Kansas City, MO.  Mesa, Arizona is now in the Top 40 most populated cities in America.  Other Phoenix-area suburbs continue to rank in the Top 5 for growth when compared to the cities of equivalent size.

So the answer is yes!!!  Phoenix can and will sustain the growth for decades to come.

Discussion Forum

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