Most Arizona residents would agree that in the last few years, condos and apartment buildings seem to be popping up on almost every corner of the major towns and cities throughout the state. Phoenix seems to be especially booming with high-density residential projects. With all this building going on, what is really happening in the Phoenix condo market?
According to recent numbers reported in the Arizona Republic, the Phoenix condo market, much like the luxury apartment market, is expanding. Developers have added 4,000 units in the past two years and prices have increased 17 percent since last year. What is prompting all this building? Is it too much too fast? A year ago, many housing market watchers expressed concern over the rapid building of condos in the Phoenix Metro area. However, sales and prices are beating all expectations, indicating strong demand.
There are many factors that have led to the rapid growth in Phoenix during the last few years. Here are a few of the reasons we are seeing strong sales in this sector:
The shift toward dense condo living is a direct reflection of changes in lifestyle among both Baby Boomers and Millennials. These two demographic groups represent the majority of consumers – especially those with the potential to buy a home. Both segments are interested in living in a more urban setting that is close to amenities.
Baby Boomers who are considering downsizing or looking for a second home want more luxury and easy access to shopping, restaurants, and entertainment. Thus, sprouting the need for luxury style buildings in the heart of downtown Phoenix and Scottsdale. The Millennials also want to live closer to work and entertainment and they are willing to give up space for those conveniences.
Phoenix is conveniently located in the center of one of the fastest growing and most vibrant urban areas in the country. While there are approximately 4.5 million people living in Valley of the Sun, metro-Phoenix makes up approximately 1.5 million of that total and it is projected to reach 2.2 million by 2030. According to the U.S. Census Bureau, millennials account for 75.3 million, and baby boomers make up for 74.9 million. Together, they represent almost 45 percent of the total U.S. population. Thus, making a significant impact on the housing market.
Many companies are also opening offices in the growing areas of the Valley, which is directly contributing to increased demand for housing. Most recently, State Farm Insurance, Charles Schwab and American Express have added offices and jobs in the Phoenix area which employ thousands.
Demand spurs growth
Market watchers realized the success these projects were generating in major cities, which has now prompted other areas to follow suit. We are now seeing new condominium and apartment complexes under various phases of construction in communities including, Tempe, Gilbert, Chandler and Mesa.
The hottest markets to buy are Phoenix, Scottsdale, and Tempe. This is due to their central location and the business growth in these areas. Developers are searching for the next popular hub that will see similar growth.
At Landmark Title, we take pride in knowing the ins and outs of the Arizona real estate market and changes in its landscape. To learn more about real estate and gain insight on escrow and title services, visit our website and read our blog.