We all know housing is in short supply, but more importantly what does it look like going forward?
According to the U.S. Census Bureau as of December 31, 2020 the Phoenix Metro area saw housing permits of:
1 unit 31,724
2 units 658
3-4 units 207
5+ units 14.029
Total units 46,618
Those numbers represent a 24% increase in single family homes over the course of 2020 and a 32% increase in multi-family housing at a time when there was an 18% increase in the median sales price.
While Avondale saw the largest percentage increase in single family permits last year (427%), here are some numbers of single family permits for the most active cities in Phoenix Metro:
Avondale 548
Phoenix 4,049
Buckeye 3,343
Surprise 2,481
Maricopa County 2,424
Casa Grande 1,034
Glendale 2,295
Coolidge 427
As of January 31, 2021, the Census Bureau showed 4,070 permitted units in the Phoenix Metro area.
According to RealPage Inc, Phoenix Metro had 22,055 apartment units under construction in the third quarter of 2020. It is estimated another 45,500 apartment units will be permitted in 2021. Tempe, Mesa, Gilbert, Chandler, Pinal County, Phoenix, Avondale/Goodyear, Glendale, and Peoria/Surprise will see the largest number of multi family permits in 2021.
According to Redfin, the valley’s net inflow migration for 2020 was 82,600, the most of any metro area in the country. The average budget of the inflow buyer was 23% higher than local buyers. And that is a huge frustration for local buyers.
But I like to look at entitled units because those numbers are a good view to the future. For example, as of early February 2021 the City of Surprise had almost 50,000 entitled units. How many entitled units are there in the cities or towns your clients wish to live? Find out and follow those projects to provide your clients the best chance of securing their new lease or purchase home.
The reason for the housing shortage is true economic development. The jobs that are arriving today span diverse and multiple industries from medical R&D, Food R&D, to manufacturing of food, mattresses, appliances, aerospace goods and a vast array of commercial equipment and residential goods. They are jobs in data centers, transportation, office, manufacturing, distribution, mortgage, real estate, financial services, almost any kind of job you can imagine. Along with those jobs is an increasing number of corporate development and relocation of headquarters.
Increasingly companies are buying large parcels of land with the intention of expanding over time. Sometimes that expansion plan gets quickly sped up as we saw with White Claw and Red Bull.
The thing that allows these companies to invest in relocating and expanding is Arizona’s dedication to creating the necessary infrastructure over time. Internet, water, freeways and roadways, air and rail transport.
All of which brings people who need houses. We are fortunate to have a variety of housing options. One of the items I believe we need to think of now, is how do we preserve those diverse housing choices? From small courtyard style units to luxury apartments, to condos on lakes, to the full range of single-family housing types, rural, urban and suburban style living – HOA and non HOA living.
I encourage you to participate in the conversation now, as cities are developing their planning and zoning codes for the next 40 years. WeSERV GAD engages with local communities and we would love to add your voice to the mix here at WeSERV and in our communities. Attend a Government Affairs Committee meeting or event, or you can always email or phone me.
WeSERV GAD: Advocating for private property rights, the right to private contract and YOUR business!