PHOENIX—In 2015, nearly 8,000 new units have come online in Greater Phoenix. This represents an increase of over 2% to metrowide inventory. In addition, "we anticipate about 8,400 new units next year." That is according to Cliff David, VP of investments at Marcus & Millichap.
David spoke as a panelist at last week's RealShare Phoenix conference and noted that while that might sound like a big number of deliveries, it is really on average. "To this day, we still have about 40 % of our stock built in the 1980s."
From a demand standpoint, he said it will come from household formation, noting that about 20,000 new households will be formed in Greater Phoenix. Demand will also come from migration. "About 80,000 people will migrate this year, and we expect the same next year."
Employment will also be a big driver, David explains. "This year, we are tracking about 49,999 jobs, but more importantly, I think the composition of those jobs is a driver. About 39% of the jobs created in the last 12 months are higher income earning positions, which ultimately will drive apartment rents."
When asked if there is a worry of overbuilding, David said that there could be some in select areas, but generally speaking, probably not. "For the most part, we are well balanced. But we are hearing some softening and some challenges on second generation leases."
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
