The Arizona Multihousing Association hosted another successful look at the state’s growth in the near future and how our housing market continues to thrive even in tumultuous times.
The half-day, sold out Perspectives & Projections event at the Renaissance Phoenix Downtown featured speakers and guests who offered mostly optimistic predictions for the housing industry in Arizona.
Kimberly Byrum, a principal at Zonda Advisory, said as interest rates start moving down, banks are opening up and lending more. And with occupancy resilient at about 93 percent, rents remain favorable. However, with thousands of apartments in the pipeline, Byrum noted that rents are likely to stabilize or even come down. The Phoenix area, she explained, still absorbs all the rental units delivered to market.
Delivering the perspective from developers, John Hartman of NexMetro Communities said builders are bringing 40,000 units to market in the region, including almost 20,000 in the West Valley alone.
Owen Metz of Dominium – which specializes in affordable housing – said more attainable housing is needed.
“We need more housing diversity and more density,” Metz said. “You can’t just building single family residential.”
Developers continue to face obstacles from municipalities, which increases the cost of new construction and adds to the time required to bring new homes market. John Carlson of Mark-Taylor Residential noted it can cost a developer more than a half-million dollars just to get through the zoning process. And less than 60 percent of plans actually make it through to approval.
Hartman noted one significant change in state law: Allowing underutilized commercial developments to be converted into housing. This AMA-backed law has the potential to create up to 150,000 new units where commercial buildings now sit.
“There’s an opportunity there,” he told the crowd.
Conor Devereaux, director of market analytics for Costar, noted that Phoenix rental properties still represent a bargain compared to Los Angeles, Chicago and the Pacific Northwest. In the near future, the real potential for affordable growth will be on the edge of the Phoenix area.
“Pinal County is a huge growth area because it’s still cheap,” Devereaux said.
He noted that Arizona rebounded quickly from the COVID downturn, recovering much more rapidly from job losses than the rest of the nation. The state, so reliant on growth and construction during the Great Recession, is more diverse now given the expansion of the technology and semiconductor sector in recent years.
“We are no longer a one-trick pony,” he said.
To wrap up the program, AMA lobbyist and former legislator Steve Kaiser moderated a panel of political experts that featured pollster Mike Noble, Democratic strategist Joe Wolf and Republican consultant Chad Willems.
They all agreed that Arizona is a politically purple state – at least for the time being – and that the presidential race to win the state’s 11 electoral votes in November remains close.
Noble spoke of the toss-up vote expected between President Donalf Trump and Vice President Kamala Harris, though he predicted that the race for the U.S. Senate between Republican Kari Lake and Democrat Ruben Gallego will not be as suspenseful. Gallego, Noble said, has consistently led his GOP rival. Noble added that Gallego’s significant financial advantage should help him as November 5th approaches.
Multiple panelists agreed that the Election Day tumult means Arizona is likely in for wild ride in the short term – though the state should be prosperous and the housing market should remain hot into 2025.
