AriZona Real Estate insider!

Phoenix has firmly established itself as a major player in the U.S. real estate market. From single-family homes to industrial complexes, the city has seen significant growth, becoming a top destination for new residents and businesses alike. According to a recent StorageCafe development report, Phoenix ranks as the second most active development market in the U.S. over the past 50 years. Here’s a snapshot of the city’s impressive real estate journey:

• Single-Family Homes: Phoenix leads the nation in single-family home development, with over 215,000 building permits issued from 1980 to 2023. However, after the Great Recession, the pace of new permits slowed. During the 2000s, an average of 7,068 permits were issued annually, but from 2020 to 2023, this average dropped to 4,443 units per year.
• Multifamily Housing: While single-family home development slowed, multifamily housing took off. Phoenix issued around 188,000 multifamily permits over the same period. The current decade, the 2020s, is set to break records, with an average of 8,609 permits issued each year from 2020 to 2023, making it the best-performing period for multifamily construction.
• Industrial Space: Phoenix’s economic growth has fueled an industrial construction boom, with over 127 million square feet of industrial space added since 1980. The 2000s were a peak period, averaging 3.7 million square feet of new industrial space annually.
• Self Storage: With strong migration trends, Phoenix has also seen a surge in self-storage facilities. About 11 million square feet of rentable storage space have been added since 1980. The 2020s have been particularly active, with an average of 600,000 square feet added each year—a 78% increase over the 2010s.
• Retail and Office Spaces: Both retail and office space development slowed significantly after the Great Recession. The office market flourished in the 1980s, with over 3 million square feet constructed annually. Retail peaked in the 2000s, with nearly 1.9 million square feet built each year.

The infographic below highlights Arizona’s Top 5 cities for real estate development.

Doug Ressler, Business Intelligence Manager at Yardi Matrix—A leading research commercial firm provided some insights on the current state of the real estate development market:

“The multifamily sector, including apartment buildings and the more recent rise of built-to-rent communities, has consistently been a top performer in real estate. Urbanization and a growing preference for rental living, particularly among millennials and younger generations, have driven strong demand.

The industrial sector has also experienced significant growth, fueled by the rise of e-commerce. The increasing demand for warehousing, distribution centers, and logistics hubs has led to substantial development in this area.

Meanwhile, the self-storage industry, though less prominent, has quietly expanded over the past 20 years. Driven by population growth and evolving lifestyles, it has become a significant and resilient player in the real estate market, often proving more robust during economic downturns than other sectors.”

This information was shared with me by Bianca Barsan, Communications Specialist at StorageCafe, who provides me with market updates from time to time.

Phoenix’s real estate market reflects the city’s dynamic growth and ability to adapt to changing economic conditions. As the city continues to develop, it’s clear that Phoenix is not just keeping up with the times—it’s setting the pace.

For more in-depth analysis, you can check out the full report here.