Arizona County Leads the Nation in Population Growth for Third Straight Year

Article originally posted on CoStar on May 9, 2023

Strong Demographic Profile of Phoenix and Tucson Sustains Real Estate Outlook

Arizona’s healthy demographic tailwinds remained in full force in 2022, with Maricopa County leading the United States in absolute population growth for the third straight year, according to the latest data from the U.S. Census Bureau.

The county, which makes up the majority of the Phoenix market, added 56,800 net new residents in 2022, a 1.2% increase.

People and businesses alike have moved to Phoenix in droves over the past few years, drawn by affordability, job opportunity, quality of life and a less-restrictive regulatory environment. Maricopa was also the nation’s leading county in terms of net migration, with 48,600 relocations last year, averaging 133 move-ins per day.

Multifamily developers have responded to the influx of residents with the most significant construction pipeline in at least three decades, which will test the sector’s performance in the coming year.

Counties in Texas and Florida also dominate the ranking for many of the same reasons, marking the continuation of a population shift to the Sun Belt. Houston, Dallas-Fort Worth and San Antonio in Texas, along with Tampa and Fort Myers in Florida, among others, were the primary beneficiaries.

Arizona’s fastest-growing county on a percentage basis was Pinal County, expanding by 3.6% in 2022. Located between Phoenix and Tucson, this outlying region comprises the southeastern corner of the Phoenix metropolitan statistical area and accounts for about 10% of the MSA’s total population. Residents have flocked to Pinal’s rapidly growing exurbs of Casa Grande, Queen Creek and the city of Maricopa, chasing lower-cost housing and employment. Several advanced manufacturers including semiconductor suppliers, electric vehicle makers and battery producers have invested billions in the local economy, setting up operations in Pinal County.

Pima County, the state’s second-largest county, also recorded healthy population gains. Anchored by Tucson, Pima County grew by 0.83% in 2022, more than doubling the U.S. total. The low cost of living, including apartment rents that are about 30% less than in Phoenix, attracts price-minded residents. The University of Arizona and its nearly 40,000 on-campus students also serve as a critical economic engine for the region.

Overall, these trends show that Arizona remains well-positioned to benefit from the ongoing migration to the South and West. Demographics underpin space demand for nearly all types of commercial real estate, and continued population growth supports the state’s long-term outlook.