For almost all of Phoenix's history, our housing prices were below the national average, winning us a reputation of affordability.

• That's not the case anymore, and it hasn't been since 2019.

Driving the news: Our affordability problem is simply a matter of supply and demand.

Why it matters: As more people move to the Valley, housing costs will continue to rise if supply doesn't catch up quickly.

Catch up fast: 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.

State of play: We're building a lot right now. Phoenix consistently ranks in the top 10 markets in the country for single-family and apartment permits.

• Brophy estimates the region will issue 50,200 housing permits by the end of the year.

Yes, but: It's still not enough.

What's the holdup? Labor shortages and supply chain issues.

• Brophy says homebuilders are also competing for labor against major commercial projects, including the Taiwan Semiconductor Manufacturing Co.

The other side: The Arizona Multihousing Association and other business groups are pushing for revamped zoning laws that could speed up building.

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Phoenix's hot housing market is cooling — not crashing.

Why it matters: When home prices started to fall this summer, many were reminded of the 2008 housing crash, which left more than two-thirds of metro Phoenix homeowners underwater on their mortgages.

• But experts tell Axios Phoenix the market is just settling after more than two years of unsustainable growth.

State of play: The median home sale price fell by $5,000 in June and $20,000 in July after rising by an average of almost $9,000 per month since January 2021.

Yes, but: July's median sale price was still $440,000 — $45,000 higher than it was a year ago.

Flashback: Jamison Lunnen, vice president of real estate operations at Homie, says the 2008 crash was a combination of bad lending practices and negative equity — neither of which is an issue today.

Buy here: Local broker Rebecca Hidalgo Rains says there are actually several cities in the Valley that are officially a buyer's market, according to August's Cromford Market Index, which measures the balance of supply and demand.

• Buckeye, Maricopa and Gilbert are a few that have higher supply levels than demand.

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During the housing boom of the early 2000s, rent prices stayed relatively stable as home prices climbed quickly.

• But in the past few years, rents have risen almost as quickly as home prices, leaving few housing options for middle- and low-income residents.

State of play: The average rent for a Phoenix apartment is nearly $1,600, according to RentCafe.

By the numbers: As more people move to the Valley, the average income of Phoenix renter households has increased by about 52% since 2018, according to Colliers research.

• Yet landlords also filed almost 6,600 evictions in Maricopa County last month — the most in a single month since October 2008.

Between the lines: This dichotomy illustrates two distinct segments of the renter population.

• A growing number of high-wage workers are choosing to rent instead of own, filling new luxury apartments in areas such as downtown Phoenix and Old Town Scottsdale.
• A significant number of working-class renters are unable to purchase a home and are struggling to keep up with rising rents.

For example: If a household consists of two minimum-wage ($12.80 an hour) workers, they make about $53,000 a year, before taxes.

• The rule of thumb says that a household should spend no more than 30% of its income on housing, or $1,300 a month in this scenario.

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Tom Buschatzke, director of Arizona Department of Water Resources (ADWR), tells Axios that the state has enough water to meet its housing growth, though "it's probably not obvious."

• Yes, but: That doesn't mean the ongoing drought won't force new restrictions at some point.

The big picture: The most populous cities in the Phoenix area are all part of the ADWR's Assured Water Supply Program.

Yes, and: There are other sources of water that cities could tap into for housing growth — and others could be on the way.

• For example: There are basins and other non-groundwater supplies such as the Harquahala Basin, west of the Valley, though it has issues with agriculture-related nitrate concentrations that must be addressed.

The other side: Water availability could still be a problem.

• State Rep. Regina Cobb (R), tells Axios that Arizona is "over-allocated at this point."

What's next: In most of Arizona's urban areas, subdivisions must demonstrate to ADWR that they have at least a 100-year water supply, and last year the agency barred subdivisions in Pinal County from using groundwater to meet that benchmark.

• Buschatzke tells Axios that similar restrictions will eventually occur in Phoenix and four other parts of the state designated as "active management areas," though he wouldn't say when that might occur.

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The most expensive house on the market in the Valley has a unique quirk — it hasn't actually been built yet.

Where: 20568 N. 112th St. in Scottsdale

Asking price: $32 million

Details: The planned home would be 17,267 square feet, with seven bedrooms and 10 baths, along with game, media and sauna/exercise rooms. It also would include a pool, spa, guest house and an elevator.

What's next: Builders could break ground on the home this year, with a likely completion date of 2025.