Examining job growth, rental prices and more in Phoenix
Multiple cities in the US are considered ideal spots for settling due to their low rent, employment opportunities, and other benefits. Phoenix, the fifth-largest city in the US, remains one of the top areas of choice.
While the US experienced a brief recession at the start of the Covid pandemic; the economy experienced a bounce back primarily in 2021. The demand for new products during the pandemic saw many companies increasing production and demanding more labor. Currently, some US cities, including Phoenix, have thousands of job opportunities.
Looking at the Phoenix Labor Market
Phoenix is #2 in the job market
According to AZ Big Media, Phoenix, Arizona’s largest city, has managed to be in the top 5 cities with available job positions during a time when many international countries worldwide are laying off a significant portion of their staff. This is based on the US Labor market rankings that ThinkWhy released.
Phoenix is experiencing this growth due to the number of people moving into the area and the increase in the number of jobs.
"According to AZ Big Media, Phoenix, Arizona's largest city, has managed to be in the top 5 cities with available job positions during a time when many international countries worldwide are laying off a significant portion of their staff."
Facebook will launch a data center in Mesa
Leading social media giant Facebook will be building a data center in Mesa, located a little less than 30 minutes from Phoenix. The Arizona Commerce Authority explains that the data center is projected to be a 960,000 square-foot facility and the first data center in Arizona. Job opportunities will be numerous, including operational and construction jobs.
The Mesa Data Center is being hailed for its planned conservation and restoration efforts. The data center aims to promote cleaner energy use that will be more sustainable for the future. It will use 450 megawatts of renewable energy in three sites in the state. This will enable developers to stick to their renewable energy goals.
There will be plans to restore the water that the data center will use. More than two hundred million gallons of water will be restored annually in the Colorado and Salt River basins. The Mesa Data Center will use less than 60% less water than the average data center.
Mesa was chosen after a rigorous location scouting process. They selected it because of its large talent availability, the available infrastructure, and its lively culture. The data center will be helpful in the area to boost productivity and better meet resident’s technology needs.
The number of available jobs in Gilbert, the fourth largest Phoenix Metro area municipality, will increase by 300 or more over the next couple of months as Zero Electric Vehicles (ZEV) looks to finish building an over 100,000-square foot manufacturing facility in the area. According to AZ Big Media, on December 1, 2021, ZEV will officially move into its manufacturing facility. The facility will provide a modern and productive work experience for the company’s staff and partners.
They will use ten thousand square feet of the facility for battery design, development, and certification. Employees will be expected to have expertise in thermal management, battery cell chemistries, packaging, and more.
At the start of September, Taylor Seely of AZ Central shed some light on the hiring opportunities available in the Phoenix area. Walmart wanted to hire 20,000 new people for 250 stores across the nation. They hosted three hiring events on Sept. 8 and 9 in Buckeye, Glendale, and Casa Grande. Both permanent and part-time positions were available in fillers, freight handlers, lift drivers and technicians, and management positions.
Also, Amazon recently made a new 270,000 square-foot sorting facility in Glendale and a new delivery station in Surprise, Arizona. They had over 30,000 to fill and wanted to host their virtual “Career training” to gear people for these positions—the event was held on September 15, including 1-on-1 coaching sessions.
AZ Commerce reports that the Office of Economic Opportunity (OEO) says Arizona can expect jobs to increase from 2,853,646 in Q2 2020 to 3,178,686 in Q2 2022. The OEO says that those that faced the most impact by Covid-19 will become the fastest growing sectors over two years. Leisure and Hospitality, one of the largest of all supersectors, is expected to grow by 12.8% annually.
The Health Care and Social Assistance sector is expected to grow by 6.1% during a similar period. This will be because a large portion of the ever-growing population in Arizona will reach Medicare eligibility. The other areas expected to grow include construction employment, transportation and warehousing, and information.
When making the projection assumptions, the OEC used certain economic assumptions. This includes that there will be no significant disruptions to the economy or polity. The US economic framework will be similar to that of the base year, and that Arizona’s population growth will still be among the top five in the US.
"AZ Commerce reports that the Office of Economic Opportunity (OEO) says Arizona can expect jobs to increase from 2,853,646 in Q2 2020 to 3,178,686 in Q2 2022."
Rent in Phoenix and Other US States
US Apartment rent prices continue to rise
Lynn Pollack of GlobeSt says rent prices in the US reflect a growth pattern since the start of the year. Pollack refers to the Apartment List report where we see that the US median rent increased by 13.8% since January, contrasting with the pre-pandemic growth of around 3.6% from 2017 to 2019.
Rent growth in 2021 is passing those that were around in pre-pandemic times in 98 of the 100 largest US cities, Phoenix included.
Apartment List also suggested that more people are looking to rent because of the high price of ownership and a narrow residential real estate market.
Phoenix has the most significant apartment rent increase
The AZ Big Media reports that effective asking rent in Phoenix grew by 3.4% in July, making it the second-highest monthly hike in the US.
The rents went up to 21.6% percent over the years, making it the most significant annual apartment rent in the US top apartment markets. Rent prices in the US were high in the 2000 to 2001 period. However, today’s increase at 96.9% is higher than those prices.
The rent price increase is happening all across the nation. Phoenix has a yearly growth rate of 21.6%, primarily as it relates to larger apartments.
Home price expected to grow in Phoenix Metro
Erin Edgemon and Greg Barr of the Phoenix Business Journal report that for the 25th consecutive month, Phoenix Metro is at the top of the S&P CoreLogic Case-Shiller Indices report as having the highest year-over-year home price growth at 29.3% in June. This is expected to continue into the following year.
Important Points to Note About Multifamily Business
New apartment leases to come
Many renters are looking forward to moving out of their apartments and signing new leases within six months. Paul Bergeron of GlobeSt explains that people were initially reluctant to move out due to the pandemic. However, with places reopening they are more willing to leave their apartments and sign new leases in new states to experience an upgrade to their space or a new lifestyle.
Multifamily rents are also on the rise
Orion Investment Real Estate reports that Multifamily asking rents rose across the nation by 10.3% for August based on a year-over-year basis. Yardi Matrix marks this as the first double-digit increase. The overall occupancy also rose from 0.9 to 95.6% over a year.
Why the multifamily sector will continue to thrive amidst a pandemic
Jason Morgan of Forbes says the multifamily sector remained resilient during the pandemic. They used quick thinking measures such as helping residents to access payment plans and local or federal rental assistance and even helped them seek jobs. They ended up collecting the same money they should have received. Morgan advises stakeholders to take advantage of all the opportunities that will allow them to provide the best amenities and prices.
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