Phoenix Earned No. 8 Spot for Population Gains in 2023

Article originally posted on CoStar on March 26, 2024

Phoenix is now the eighth-fastest growing metropolitan statistical area in the nation, according to recently released data from the U.S. Census Bureau.

The Valley’s population base added 49,200 people from July 1, 2022, to July 1, 2023, the data found.

Many of the top markets are located in the Sun Belt and benefit from similar demographic benefits. The favorable climate, relative affordability and employment opportunities in Texas, Florida, Arizona and the Carolinas have consistently drawn residents to these states. Healthy population growth is a crucial advantage that broadly supports economic growth and demand for commercial real estate.

The Valley’s multifamily sector recorded unprecedented levels of net absorption — or the change in the number of occupied units — and rent growth in 2021, buoyed by nation-leading demographics. Population gains and rising incomes also have supported demand at Phoenix retail properties, which have seen some of the tightest market conditions on record and recently ranked as the top rent-growth market in the country.

Last year’s result marks a modest slide down the ranking compared with 2021 and 2022. In those years, annual gains eclipsed 72,400 people, placing Phoenix in the top four of both years. Its largest county, Maricopa, similarly moved from being the fastest-growing county in the United States over the past three years to number four in 2023.

A slowdown in domestic net migration to Maricopa was the primary culprit for less explosive growth in 2023. Last year, 2,200 U.S.-based residents moved into Maricopa on a net basis, down from 33,000 people in 2022 and 43,000 people in 2021. Pinal County helped pick up the slack, recording a domestic net migration of 17,500 people.

Although Phoenix’s population growth was not quite as white-hot as it was immediately following the onset of the pandemic, the market maintains a favorable demographic profile. California and Pacific Northwest residents are still moving to Arizona seeking relative housing affordability.

Several large-scale operations related to semiconductor manufacturing, renewable energy and aerospace also keep Phoenix well-positioned to continue attracting residents.