A Look Into The State Of The Phoenix Housing And Rental Market And Commercial Development Trends
Phoenix remains one of the top regions in the US for job growth and commercial development. Many developers are extending their facilities to the area, adding more jobs to the region. Despite the recent increase in rent and home prices, many people are still looking to move to the area and take advantage of the job opportunities. Here is an insightful look into Phoenix’s recent housing and commercial market trends.
Metro Phoenix Median listing price reaches $500,000
According to AZ Big Media, the median listing price for homes in the Metro Phoenix has reached $500,000, an all-new record and almost $100,000 more than the national average for home prices.
In March, the national prices have also seen a new record where home prices rose to $405,000. Despite this new price nationally, people looking to buy homes can still get a good deal. This is because the demand is decreasing as some home shoppers are being priced out of the market. Plus, with new construction almost at a 16-year high, inventory is expected to reach a positive territory year-over-year for the upcoming summer period, based on the Monthly Housing Trends Report on Realtor.com.
120 new jobs for the Mesa region as Japanese-owned semiconductor supplier completes chemical plant expansion
According to Russ Wiles of AZ Central, one unit of the Japanese Fujifilm Holdings Corp has finished an expansion of its factory in Mesa, totaling $88 million. The factory will help supply the semiconductor industry and is expected to create 120 vacancies in the next two years.
Fujifilm Electronic Materials USA supplies four manufacturing and R&D sites in areas like Arizona and California. Eighty thousand square feet were recently added to five new buildings to expand their Mesa warehousing, R&D, chemical manufacturing capacity, and other functions. Currently, Fujifilm Electronic Materials employs around 400 people at the complex in Mesa. The company is hiring talented and skilled employees to help with the growing needs of the semiconductor and electronic materials market.
Phoenix placed in the top 5 in the prestigious 2022 Best-Performing Cities
Jeff Gifford of Phoenix Business Journal says Phoenix is among the top five Milken Institute’s prestigious 2022 Best-Performing Cities. Provo-Orem, Utah, is in the number one place, followed by Austin, Texas, in second, and Salt Lake City, Utah, third. The cities are ranked based on metrics such as wage growth, job creation, and output growth.
In 2021, Phoenix was placed at number 7. They held the number 12 spot in 2020. The report referenced job growth, wage growth, and growth in the tech sector as critical factors to its new ranking.
The report also revealed that the Phoenix metro area had the US fourth-youngest median age and that due to high demand, home prices rose over 30% in 2021.
Phoenix sees 29% growth in rental prices in 2 years
AZ Big Media reports that the Realtor.com recent monthly rental report shows that rent prices in the US rose by almost 20% between March 2020 and 2022. The rental prices for Phoenix have grown by 29% over the last two years, where the median rent reached $1,896 in March 2022.
Moreover, the two-year rental trends show changes in the distribution of higher rents across the 50 largest markets during the pandemic. This is seen where renters moved from more expensive big tech cities to relatively more affordable areas.
The Sun Belt metros like Miami and Riverside, California, ranked highest for the fastest-growing rental markets between March 2020 and 2022. In comparison, the smallest market growth was seen in big tech hub cities like Buffalo, New York, and Minneapolis.
Mortgage costs have risen by 20% in Phoenix
AZ Big Media says fast-rising mortgage rates are worsening the affordability challenges brought on by the record home value growth. The March Zillow Real Estate Market shows that the cost of a thirty-year mortgage on a typical home in the US is now 19.5% higher compared to just three months ago. Additionally, since the beginning of 2022, the mortgage costs in Phoenix have risen to 20.4%.
Regardless of the peak in price, the volume and speed of selling homes picked up in March. This shows that homebuyers are still willing to meet the asking prices. In the Metro Phoenix area, the typical home costs $453,110, up 30.2% year over year. Plus, the monthly payment is now $1,767 (if we assume a 30-year mortgage with a 20% down payment).
Phoenix Sky Harbor project will be the first to benefit from Infrastructure Law
AZ Big Media says the Phoenix Sky Harbor International Airport project will be the first project in the City of Phoenix to benefit from the Bipartisan Infrastructure Law passed by Congress late last year. They will begin with building a cross-field taxiway joining both north and south fields.
The 2,000-foot taxiway is estimated to cost $260 million and will create better aircraft flow for airfield operations. About $194 million of the funds will come from money that has been set aside for the infrastructure. The balance will come from airport revenues and Passenger Facility Charges.
Over $40 million invested for new Sendoso office and headquarters in Phoenix
The Arizona Commerce Authority shares that Sendoso has revealed that they will have a new office at The Grove. Plus, they will relocate their corporate headquarters in San Francisco, California, to Arizona in November of this year.
The office space, about 58,000-square-foot, will help boost collaboration and foster and support connections among employees. The project will also bring about 1,000 jobs to the area.
So far, Sendoso has made a strong impact in the Phoenix area with its warehouse and distribution center. The employees in Arizona will work in human resources, sales, and other areas. While the Sendoso headquarters will be moving to Phoenix, they will maintain a strong presence in California, employing 200 people.
Arizona exports have increased by $4.3 billion since the 2020 decrease
The Arizona Commerce Authority reports that exports from Arizona companies went up over 20% last year. That was an almost near-record level that was set before the pandemic, hinting at a return of strength to Arizona’s economy. The exports in 2021 were at $24.1 billion, which is a climb from the $19.8 billion in 2020, slightly below the $24.6 billion mark made in 2019.
The semiconductor exports witnessed a 50.5% rise at $4.2 billion and became the 4th highest in the US. Other Arizona industries that saw increases include Aerospace products and parts at $3.8 billion and metal ores at $2 billion.
Texas-based company opens liquid biopsy laboratory in Phoenix, costing $45M
Angela Gonzales of Phoenix Business Journal reports that Caris Life Sciences molecular science company based in Irving, Texas, is opening a liquid biopsy laboratory in Phoenix, costing $45 million. The company is expected to add hundreds of bioscience jobs in the coming months.
The laboratory will be 34,000-square-foot and located at 4415 E. Cotton Center Blvd. This brings the company’s overall lab facility space occupied in metro Phoenix to approximately 160,000 square feet.
Several jobs are already available at the lab, such as board-certified molecular geneticists. Caris has 1,500 employees across the nation, and approximately 800 of them are in Arizona.
Dr. David Spetzler, who serves as the company’s president and chief scientific officer, says some things that attracted them to Phoenix include the weather and stable geography. The company is constructing a 117,000-square lab in Texas, but all its other labs are in Phoenix.
The Valley is leading the redevelopment of retail centers that have deteriorated
Corina Vanek of Phoenix Business Journal reports that the Los Arcos Mall has been redeveloped. The mall is located in Scottsdale. It was originally opened in 1969 and once had a successful operation. However, years later, it fell into decline as many stores closed, and eventually, it was shut down in 1999 and later demolished.
After some back and forth, the 42-acre site is now home to SkySong, a mixed-use project with mainly apartments and office space. A study that was completed by Elliott D.Pollack & Co. in 2021 reports that the project will have an economic impact of $58.2 billion over the next 30 years.
Other developers in the Valley are looking to follow this move as many large-scale retail developments have gone beyond their utility.
Phoenix is now a leader across the nation in mall redevelopment.
Despite being built decades ago, malls can easily be repurposed today to be used for different reasons. It is expected to continue nationally where executive managing director at Cushman & Wakefield, Richard Latella, says approximately 30% of malls in the nation will outlive their useful life and be redeveloped or go out of business.
Park Central Mall is another mall that has undergone redevelopment and now has large floor plates or restaurant spaces and more to come. Other malls in Phoenix to be redeveloped include Metrocenter Mall and Paradise Valley Mall.
Northrop Grumman’s expansion of its Arizona satellite-manufacturing plant will create hundreds of jobs
Russ Wiles of AZ Central says Northrop Grumman completed its expanded Gilbert satellite factory on Friday. With the expansion, 120,000 square feet will be added to the facility that is located near Elliot and McQueen roads. Currently, about 850 people work at the factory, and hundreds are expected to join over an unspecified time schedule. Some of the programs that are in production at the facility in Gilbert include earth-observation satellites for National Oceanic and Atmospheric Administration and NASA.
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