Jan 2, 2024 - Real Estate

Why metro Phoenix houses are so expensive, explained in one chart

Existing housing units relative to population demand in the Phoenix metro area
Data: Hines analysis of Census Bureau and Moody's data; Note: Population demand is a theoretical housing demand metric based on long-term household formation and homeownership rates by age cohort; Chart: Axios Visuals

Metro Phoenix is short around 120,000 homes, according to figures global developer Hines shared with Axios.

  • That's 6.5% of the metro area's existing inventory, as of 2022.

Why it matters: The major deficit is why prices have remained steep in the Valley even during this period of slow sales and high interest rates.

Context: Home and apartment building all but stopped after the 2008 housing crash, according to Colliers researcher Thomas Brophy. It restarted in 2016, then lulled again the next two years.

  • Meanwhile, more people started moving here.
  • By the time building started up in earnest in about 2019, the region was already playing catch-up and home prices surged as a result of the low supply.

What we're watching: The Valley is building a ton of apartments right now.

Yes, but: Even with a concerted effort to address the supply issue over the past few years, we've barely made a dent in our shortage since 2020, per the Hines numbers.


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