Market Overview

The Phoenix-Mesa-Scottsdale MSA is comprised of two counties, located in the south-central portion of Arizona. The Phoenix Metro area, Maricopa and Pima Counties, is the second largest MSA by land mass, second only to Riverside-San Bernardino, and has the second lowest population density per square mile of the top 25 MSAs in the U.S.; second again to only Riverside-San Bernardino. Maricopa County itself is over 9,000 square miles, roughly the size of New Hampshire.

Economy

Phoenix plays a prominent role in the economy of the Southwestern region of the country, serving as a financial, communications, and transportation hub. Phoenix’s economy is moving beyond its traditional reliance on single-family construction and retirees. It has become a magnet for the relocation of manufacturing and professional services firms. As a result, the surge of new residents is providing a boost to jobs in the retail, hospitality, construction, and healthcare sectors. This trend is likely to continue for at least the near future.

The tech sector in the MSA, referred to as the ‘Silicon Desert’ (of course) employs roughly 5 percent of the workforce. Phoenix is actively peeling away tech firms from the West Coast cities due to the significantly lower costs of living and doing business, and the quality-of-life perks that go along with it. These low costs have also incentivized financial and business services firms to open up back-office operations in the MSA. Along with a preferable environment to incentive corporate expansion, Phoenix boasts a strong knowledge base from its university system.

Phoenix Metro has more than 300,000 students attending one of their universities at any time – 6.4 percent of the total population in the MSA. Arizona State University, the largest university campus in the MSA was named the ‘Most Innovative School in America’ four years in a row by U.S. News & World Report. Phoenix is also home to Maricopa Community Colleges, one of the largest community college systems in the U.S. Most students in the university system wish to stay in Arizona as the tech sector expands and high-paying jobs await them in the local workforce.

Growth

At the turn of the century, Phoenix was one of the fastest growing MSAs in the nation, fueled by housing and construction, then the great recession hit and almost knocked the "Valley of the Sun" out of its economic groove for good. But this region rose from the ashes now boasting a more diversified economy with some of the strongest economic and population growth in the U.S. The U.S. Census indicates that Phoenix ranked fifth out of the top 25 MSAs for domestic migration in 2016-2017.

Moody’s Analytics estimates a current job growth rate of 2.4 percent, resulting in just under 100,000 jobs added through year-end 2018. The low cost of doing business in Phoenix is not likely to change in the future, which should continue to spur growth in the MSA.

Unique Aspects

Amidst the rolling Sonoran Desert, the Valley of the Sun receives roughly 300 days of sunshine per year, making it the 4th sunniest city in the U.S. Given the climate and location of the city, for all intents and purposes Phoenix should not exist, let alone be the most populous state capital in the United States. The area was initially developed by the Native American Hohokam people, who carved a network of irrigation canals to make the area inhabitable roughly 2,000 years ago (some of which are still used today).

Thanks to railroad expansion, tourism, and steady growth over time, Phoenix really hit its stride at the turn of the century as a growth market and hasn’t looked back since – Great Recession notwithstanding. Of course, as a result of this, the only thing rarer than a rainy Phoenix day is an actual Phoenix native. In fact, there is a running local joke that “no one if from here”, and it is common to listen to complaints from transplants as to how much better it is in: Los Angeles, San Francisco, Chicago, and a plethora of other places... which aren’t as good or they would have already moved back

Crexi Scores

A Economy Score
C Demographic Score
A Livability Score
A Activity Score

Market Demographics

Nickname: Valley of the Sun, Salt River Valley
Population Total: 4,857,962
Owner Occupied Housing Units: 1,295,915
Population Growth: 86% since 2010
Owner Occupied Housing Rate: 80%
Population Density: 45 People/Square Mile
Median Housing Value (Owner Occ.): $191,100
Retail Sales Total: $59,671,813,000
Total Housing Units (2017): 1,939,993
Retail Sales Per Capita: $10,333
Median Gross Rent / Month (Residential): $1,024
Median HH Income: $55,604

Economic Metrics

Number Of Employees: 1,672,158
Payroll: $79,780,816,000
Change in Employment Rate: 3%
S&P Corelogic Case-Shiller Home Price Index: 14

Largest Industries

Healthcare & Social Assistance (271,442)
Retail Trade (256,204)
Educational Services (178,254)

Largest Employers

State of Arizona (49,800)
Wal-Mart Stores, Inc. (30,634)
Banner Health (24,825)

Transportation

Light Rail

Valley Metro Rail is a 26.3-mile, relatively new and expanding regional light rail line. Part of the Valley Metro public transit system, it serves the cities of Phoenix, Tempe, and Mesa. Their mission statement is to reduce driving, traffic congestion and improve air quality.

Car

Phoenix ranks 25th for traffic congestion in North America, and 7th for the fastest commute time out of the top 25 MSAs in the U.S. Phoenix also ranks 12th out of the top 25 MSAs for alternate commuting methods used (carpool, public trans., walking/biking, etc.)

Snapshot of Maricopa and Pinal Counties

Maricopa County, AZ

Maricopa County, Arizona is the most populous county in the state, and home to Phoenix, its county seat and the state capital. More than half of the entire population of Arizona resides in the county. Due to the 300+ days of sunshine and the average annual temperature of 72 degrees, Greater Phoenix/Maricopa County residents enjoy outdoor amenities within and outside the city throughout the year, including one of the largest regional park systems in the United States. Downtown and Midtown Phoenix are major population and employment centers in the county. Major cities which are also part of Greater Phoenix located within Maricopa County include Scottsdale and Tempe.

Downtown Phoenix is the MSA center for employment, education, professional sports, living, arts, and culture. Midtown Phoenix has grown rapidly since 2015, transforming from a slow market with no central core to a walkable urban environment with a bustling food and bar scene, revamped offices and new multifamily developments.

Scottsdale has been referred to as the "South Beach of the desert" by the New York Times due to its nightlife, restaurants and hotels and resorts. Roughly 40% of the city's workforce is employed in tourism-related occupations. There are roughly 70 hotels in Scottsdale, and one of the Mayo Clinic's branches is located in the city. Scottsdale is also home to major retail shopping destinations such as Kierland Commons in North Scottsdale, and the Scottsdale Fashion Square – a major regional retail draw and tourist destination.

Tempe is an inner suburb, located between the core city of Phoenix and the rest of the East Valley. It is the home of Arizona State University, the largest employer in the submarket. One of Arizona's largest shopping malls, Arizona Mills, sits near the border with the town of Guadalupe. Tempe Marketplace a large open-air mall featuring live music and water and laser shows is located just southeast of Tempe Town Lake.

Major Cities: Phoenix, Mesa, Scottsdale
Total Housing Units: 1,762,834
Major Submarkets: Downtown Phoenix, Midtown Phoenix, Scottsdale, Tempe
Median Housing Value: $225,000
Total Population: 4,410,824
Median Gross Rent: $1,033
County Growth: 50% since 2010
County Median HH Income: $58,580
Owner Occupied Housing Units: 1,075,329
Major Corridor (E/W): I-10
Owner Occupied Housing Rate: 00%
Major Corridor (N/S): I-17, I-40 (E/W), I-10 (E/W)

Pinal County, AZ

Pinal County, Arizona is the more rural county in the Phoenix MSA. The county was once ground zero for the housing bust during the "Great Recession", as developers had snatched up formerly agricultural or unused land plots, creating isolated exurb cities, with little-supporting retail or infrastructure out in the rolling desert. At one point in 2010, distressed home sales made up 80% of all sales in the county. Since the low point, the county has grown rapidly due to the affordability of housing vs. Maricopa County, attracting residents from the Phoenix area as well as retirees from across the nation.

Economy

Since Pinal County’s founding, copper mining has been and remains a county economic mainstay, over the many years creating thousands of great paying jobs and billions of dollars in tax revenue to the state, county, and local economies. Pinal County West is the lower valley area of the county, directly south of Mesa, which has primary economic drivers of manufacturing, distribution, and agriculture. Interstates 10 and 8 give the west county direct access to Phoenix/Maricopa County, Tucson to the south and San Diego to the west, supporting logistics uses.

Major Cities: San Tan Valley, Casa Grande, Maricopa
Total Housing Units: 177,159
Major Submarkets: Pinal County West
Median Housing Value: $157,200
Total Population: 447,138
Median Gross Rent: $1,014
County Growth: 00% since 2010
County Median HH Income: $52,628
Owner Occupied Housing Units: 128,617
Major Corridor (E/W): I-10
Owner Occupied Housing Rate: 60%