Metro Phoenix’s West Valley Building Boom Spurred by TSMC, Amkor Means Thousands More Houses

Article originally posted on AZ Central on June 28, 2024

The West Valley is the hottest spot for homebuilding in metro Phoenix, and the huge expansions of the Taiwan Semiconductor Manufacturing Co. and Amkor Technology will spur thousands more new homes in the already growing area.

The two big firms are expected to add at least 8,000 jobs in the northwest Valley and that doesn’t include new jobs created by their many suppliers. Many people are moving to the Phoenix area for well-paid positions, and they need homes.

Smaller new communities are selling out quickly. Builders are seeking new sites on state-owned land and in big master-planned communities just opening or expanding.

“The West Valley is definitely dominating housing,” said Jim Daniel, president of the veteran new home research firm RL Brown Reports.

During the past 12 months through May, homebuilders were issued 3,270 permits for houses in the southwest Valley and 2,629 in the northwest Valley, according to RL Brown.

The East Valley, mainly Mesa, Gilbert and Queen Creek, long led metro Phoenix for homebuilding. But higher prices and less available land in the area have led to fewer new homes. The region had 1,403 new home permits during the past year.

Home prices in the northwest Valley have soared with demand. The median new home price in the area is almost $645,000, which compares to an overall Phoenix-area median of $485,000 for a new house.

Where new homes are going up in the northwest Valley

Homebuilders have snatched up many of the few smaller parcels available along Loop 303 from Interstate 17 past U.S. 60. Those communities are quickly selling out.

Big new communities are expected to catch much of the future growth, and more state land is expected to be turned into new communities.

“We are being aggressive in the northwest Valley,” said Alan Jones, division president of Lennar Homes. “We like the location for a lot of reasons. There’s TSMC’s growth, and the transportation corridors are now excellent.”

Lennar has four new northwest Valley communities, including in Peoria’s big Mystic master-planned development near Loop 303 and Amkor’s new facility. All four will sprout a total of almost 900 homes. The other three are Middle Vista, Aloravita and Windstone Ranch.

Peoria’s Lake Pleasant area is home to the northwest Valley’s biggest new developments, which span tens of thousands of acres and have assured water supply designations. In addition to Mystic, there’s Vistancia, Northpointe and Saddleback.

“Those communities are a stone’s throw from Amkor and TSMC, and builders are there,” said Greg Vogel, CEO of Land Advisors Organization. “But it’s the whole west Valley from the U.S. 60 sweeping down to Tonopah drawing builders and homebuyers.”

Within a five-mile radius of TSMC, about 2,100 new apartments have been built since 2020, another 1,038 are under construction and 1,550 are planned, said Thomas Brophy, apartment expert and national director of research for Colliers International of Phoenix.

There are 21 build-to-rent housing developments underway within 12 miles of TSMC, according to Daniel.

Growth is ‘bumping up’ against state land

The northwest Valley is home to big swaths of state-owned land, much of which is next to new housing developments. Arizona’s housing growth often leaps over state land because it can take a significant amount of time to buy and develop it.

A 2,400-acre stretch of land in north Phoenix surrounding the Taiwan Semiconductor Manufacturing Co. campus could see $7 billion worth of new development, including apartments. New York-based Mack Real Estate Group paid $56 million for the site at an Arizona State Land Department auction last month.

More than 28 million square feet of new buildings, including industrial, office, retail and residential, are planned for the site, near Loop 303 and I-17.

“It can be a long journey to get state land to auction, but growth is bumping up to the land,” Vogel said. “A few smaller parcels will likely come to the market this year and next.”

Jones said Lennar is currently working with the state land agency on a site in the northwest Valley. Other homebuilders are also trying to get Arizona State Land Department parcels in the area.

The area’s thousands of new employees will need places to live, and most will want to be close to their jobs. What the State Land Department does will be key to getting the housing they need.