Phoenix Real Estate “Grows Up” Thanks to Millenials and Baby Boomers

For the past few decades, the urban character of Phoenix has been associated with low-density sprawl but new patterns of development and infill could be changing all of that. With a burst of condo construction around Phoenix, Scottsdale and Tempe in downtown urban hub areas, the Valley is setting the stage for reinvigorating down town areas. The success of this shift is resting in large part on millennials and baby boomers who are leading the move toward downtown.

Those who have been in Phoenix for decades remember how entrenched the city’s suburban aura had been. Vacant lots and undeveloped land were part of a cityscape that often felt more suburban than urban. With the population spread through sprawling neighborhoods of single family homes and shopping centers, Phoenix, Scottsdale and Tempe developed in a way that seemed to fly in the face of conventional ideas about cities.

Whereas the 2010 census had metropolitan Phoenix reporting 3,165 people per square mile, the country’s densest major city, New York, had nearly 9 times as many people, over 27,000, in the same sized area. A trend that was in full upswing in the 1970s had Phoenix residents moving to the city’s fringes to access bigger, newer housing options.

However, with the Valley Metro Rail nearing a decade in operation, those development patterns are turning around. Easy transportation access has helped fuel an interest in the concentrated urban hubs and is sparking a re-centering of real estate back into the city. The empty land that was once common is increasingly rare, and city development has built shopping, jobs and entertainment that are refocused on the central districts.

Alongside the move toward centrally-located condominiums is a shift in how people are organizing their lives. Many baby boomers making the move downtown are empty-nesters and beginning their retirement. For them, condos can present a great option for downsizing a family household. Easy walking and light rail accessibility to an urban core enhances entertainment and quality of life options, keeping them connected to friends and community.

Younger people moving in are finding a similar appeal with the connectedness downtown centers are offering. Millennials, including a large swath of college students, are viewing the new condos as a way to be “close to everything” and valuing the urban accessibility over the higher maintenance houses and lawns that have had the biggest mark on Phoenix real estate. By prioritizing their connection to the resources of a city, and an engagement with the restaurants, shops and entertainment that infuse downtown neighborhoods, younger populations are moving to urban hub districts in droves.

The relatively affordable price tag of Phoenix-area real estate has had an impact on the youthful uptick downtown. Established Gen Xers see a condo purchase as a solid investment, as do the parents of many Millenials who see it as more financially advantageous than renting.

While housing more people requires more infrastructure, concentrated populations are a good thing for urban efficiency. Urban centralization decreases the need for cars and reduces traffic. By recent estimates, urban condo dwellers use only half the water of single-family homes, making it a sensible choice in terms of conserving one of the desert’s most precious commodities.

On the street level, population density helps a city support small local businesses and also builds urban vitality which comes along with “city bustle”. In her work “The Death and Life of Great American Cities” urbanist Jane Jacobs spoke of how population density and diverse commerce contribute to city life and safety.

With this new growth, however, the real estate market affects the city’s affordability. The demand for newer condos has seen their prices climb over 15% in just the past year. While getting around the city gets cheaper and more accessible and condo living can save money on utilities and cost of living, real estate markets and their impact on a city’s economics effects the cost of living for the entire area. With the continued investment in the city’s core districts, though, the real estate boom seems like it is far from losing steam.

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