Phoenix entered this recession in a good place. In the last five years, Phoenix has had a strong growth run with the two essential growth metrics firing on all cylinders: employment and population. The area was hit hard during the last recession, and there have been skeptics who wondered if Phoenix would return to its secondary status during the next downturn. Early signs show the market is not only weathering the storm, but outperforming other markets through the worst of the public health crisis.
"Phoenix is well positioned for economic recovery. The market had great momentum heading into the pandemic and while employment was heavily impacted, the unemployment rates in Phoenix were 210 basis points lower than the national average in April," Duerk Brewer, chief operating officer at Matthews Real Estate Investment Services, tells GlobeSt.com. "This is a result of Phoenix maintaining manufacturing throughout the pandemic and an increasingly diverse employment base that has developed following the Great Recession when construction and other consumption jobs were driving the Phoenix economy."
The employment growth has not only helped to grow the economy, but it has also diversified the market's job centers. This diversity will help the market survive the market dislocation. "Phoenix has developed into a magnet for technology, bio-services, manufacturing, business, and financial sectors," says Brewer. "Besides, the Phoenix metropolitan area experiences a net population gain of over 40,000 people per year continuing to buoy real estate values here in the valley."
Matthews recently opened a Phoenix office and hired new brokers, illustrating the firm's commitment to and bullishness on the market. While Brewer admits that there are some concerns launching an office during a pandemic, they haven't impacted the opportunity in the market. "Of course, there are always concerns. There are concerns everywhere in life, but generally, I do not allow concerns to get in the way of making good decisions," says Brewer. "We certainly saw and continue to see some short-term impact on renters and commercial tenants due to government-mandated shutdowns. However, we are already seeing increased client activity at the most basic levels of the business, therefore we are very optimistic about the market battling back much more quickly than we originally thought."
While Phoenix has weathered the storm, it hasn't been unscathed. "March was bad, April was worse, but in May internally we say a massive uptick in agent and client activity that came out of nowhere, and not only has the trend continued it has only grown from there," says Brewer. "It appears that June will be the busiest listing month in Matthews history. We suspect this will continue and you will see increased investor interest and transaction activity nationally as the economy reopens and businesses begin to recover and rehire."
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Kelsi Maree Borland
