Phoenix Holds Onto Title as One of the Hottest Markets in US

By Audrey Jensen

Phoenix topped the nation as one of the hottest markets to watch in real estate for 2023, according to a newly released report by the Urban Land Institute and PwC.

The Phoenix metro ranked ninth in the nation and is considered a “magnet market” and “super” Sun Belt region along with other markets including Atlanta, Dallas/Fort Worth, Houston, Miami, San Antonio and Tampa/St. Petersburg. The metro has caught more international attention in recent years and attracted additional investors, development and businesses looking to expand or move to the region across all sectors.

“Everyone seems to be aware now that Phoenix is hot, literally and figuratively,” said Steve Lindley, advisory board treasurer for ULI Arizona district council and executive managing director at Cushman and Wakefield. “Our market used to be very dominated by our own growth, real estate, mortgage companies, construction — and 70% of our recent private sector economic growth has come from technology, health care, bioscience, advanced manufacturing, aerospace, financial services.”

Magnet markets are those growing more quickly than the U.S. average for population and jobs and are preferred for investors and builders, while super Sun Belt markets are large but affordable markets that are also attracting a wide range of businesses, the annual ULI and PwC US “Emerging Trends in Real Estate 2023” report said.

This year’s ranking is lower than Phoenix’s third highest in the U.S. last year, but the metro area still ranked in the top 14 markets in the nation for 2023. The ULI report found that more than half of the 20-highest rated markets in last year’s survey fell in rankings due to “normalizing,” or certain aspects of real estate returning to pre-pandemic patterns.

Out of the top 20 markets in emerging trends, ULI found that 14 of those were also located in Sun Belt cities. What those areas have in common is diversity, strong economies, affordability, a business-friendly environment and fast growth, Lindley said. The Valley also ranked 13th for homebuilding prospects compared to third overall in last year’s study.

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