Phoenix continues to attract people seeking year-round warm weather and ample opportunities for recreation, sporting events, and employment. Companies that recently announced plans to expand their workforces in Phoenix include JA Solar, Corning, and Paramount Global.[1] Taiwan Semiconductor Manufacturing Co. (TSMC) announced plans to expand its current $12 billion campus investment to a total of $40 billion.[2] Phoenix’s employment saw positive momentum in 2022, with 4.0% job growth as compared to 3.2% nationally.[3] As of November 2022, Phoenix had an unemployment rate of 3.0%, which increased slightly from 2.8%[4] in the year prior but was a marked improvement over the unemployment high of 12.8% in April 2020.[5] Phoenix’s unemployment rate improvement was mostly driven by year-over-year employment gains of 26.4% in education & health services, 14.6% in leisure & hospitality, and 11.3% in manufacturing.[6]
RealPage estimates that 28,245 new apartment units will be delivered in the Phoenix-Mesa-Scottsdale metro in 2023 with 23,894 units projected to be absorbed during that time. Annualized effective rent growth saw gains of 0.8% as of 4Q 2022 while occupancy rates dipped from 97.2% in 1Q 2022 to 93.5% in 4Q 2022.[7] Phoenix experienced a remarkable rebound in 2021 and displayed respectable growth in 2022. As for 2023, RealPage is projecting 0.7% effective rent growth and average occupancy of 92.9% for 2023. With Phoenix experiencing significant home price increases and decreased affordability, the multifamily market should remain healthy in the years to come.
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Advisory services are provided by CWS Capital Partners LLC, a registered investment advisor. Securities offered by CWS Capital Partners LLC are through an affiliated entity, CWS Investments. CWS Investments is a registered Broker Dealer, member FINRA, SIPC.
References:
[1] https://www.gpec.org/news
[2] https://tinyurl.com/TSMC-2nd-Factory
[3] RealPage 4Q22 Phoenix Market Performance Summary (pg. 3)
[4] https://www.bls.gov/regions/west/summary/blssummary_phoenix.pdf
[5] https://www.bls.gov/eag/eag.az_phoenix_msa.htm
[6] RealPage 4Q22 Phoenix Market Performance Summary (pg. 115)
[7] RealPage 4Q22 Phoenix Market Performance Summary (pg. 2)