Arizona's Growing Pains: Housing Demand Driven Mostly By Midwestern, Western Transplants

By Heather van Blokland
Published: Friday, October 11, 2019 - 6:05am
Updated: Monday, October 14, 2019 - 8:43am

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homes under construction
Sky Schaudt/KJZZ
Homes under construction in a new north Phoenix neighborhood in May 2019.

Fall is when people come to Arizona in large numbers. Historically, the so-called snowbirds stay through spring and then leave, but increasingly this population is choosing to stay year round. Maricopa County remains the fastest growing county in the country — and its growth is taxing resources in the state that cannot expand fast enough to keep up.

These growing pains can be understood through the biggest bottleneck: housing.

In the last eight years, Arizona's population has grown by more than 750,000 people. According to census data, the bulk of new residents are from the Midwest and West, people looking for a place to live, just like Phil and Liz Knuckles.

"So, we’re looking for a little bit warmer weather all year round. It’s not that much hotter here than it was in southern Utah in the summer. You know, it gets 110 degrees — you’re inside whether it’s 110 or 115, so that didn’t really make any difference," Liz Knuckles said.

She and her husband have lived in several different states, most recently Utah.

"Loved it. Absolutely loved it, but the weather didn’t love me as far as health goes, so we moved south to southern Utah — small town, not much to do, very isolated, so that’s why we’re here," she said.

Here is the Phoenix metro area. Phil Knuckles ranks St. George, Utah, a “C” on an A to F scale. The biggest moving adjustment for him wasn’t the heat, but what it takes to find a home in Arizona.

"While we were still in St. George, we would make trips. We’d hop in the car and just drive down here one day, look at a house, turn around and drive back, and it could be gone before we even got here," Liz Knuckles said.

Arizona is now majority non-Arizonan. Sixty-eight percent of people who live in the state year round were not born here, according to the U.S. Census Bureau.

Where Arizona Residents Were Born

Over the last few years, the in-migration numbers have been so high, the state’s resources are rapidly depleting. Water supplies are already low because of drought, major roadways need to be overhauled and new roads built, and the housing supply is critically low, with unprecedented demand. There just aren’t enough homes to keep up with the number of people moving here.

"There were just under 12,000 houses total in the entire Maricopa [County] and Pinal County area on the market. That includes condos, town homes, patio homes, single-family homes. Even within smaller segments within the market, it’s less. So like 85254 is a very popular ZIP code in north Phoenix, and 119 houses, condos, townhomes, patio homes — total — in that market," said Cindy Ready, associate broker with REMAX Excalibur.

She found the couple a place in north Peoria, near Happy Valley Road and 67th Avenue. It’s just a parcel of land right now. They have decided to build a 2,300-square-foot home since they couldn’t find one to buy.

"It was pretty tough. We had to sell our house. And then get here," said Liz Knuckles.

And it is expensive.

"It all looks good and easy on TV, but we had limitations on what we were willing to do on remodeling. We knew that you have to replace all your appliances and all your air conditioners, and they’re 12 or 15 years old," said Liz Knuckles.

"The situation in particular for Liz and Phil was that they had their house under contract and things looked good, but they couldn’t actually write a contract without saying their other house had to sell before they could close on a house here," said Ready.

But the situation isn’t particular to Liz and Phil. According to the latest data from the Census Bureau, they are not the exception, but the new rule here.

Eighty percent of Arizona’s population growth comes from people moving here, mostly from other states.

Phil and Liz Knuckles
Sky Schaudt/KJZZ
According to census data, the bulk of new residents are from the Midwest and West, people looking for a place to live, just like Phil and Liz Knuckles.

And as population growth increases, so will that number. The state’s housing supply can’t keep up or adapt to needs from out-of-state residents who need to sell properties elsewhere.

"From a buyer perspective, you are trying to look at the data of what things are selling for and make a good judgment call on value but the next is selling for a little bit higher and a little bit higher. So it’s causing an issue with buyers being a little bit behind until buyers realize that’s what our market is doing," Ready said.

For Liz and Phil Knuckles, it was like playing a game of musical chairs — and never finding a place to sit.

"We were quite surprised to find how hard and difficult it was to sell the house in St. George. Not that there’s anything wrong with it, just that it’s a very specific market. It’s a small town, a lot of retirees and not a lot of retirees, so it was difficult to sell and then when we got here it was, 'Oh, we’re going to start this again!' Every property we look at it was within the next day, there was a contract on it," Liz Knuckles said.

Responding to news of Arizona’s population growth in 2018, Gov. Doug Ducey said: “In the game of states, people vote with their feet, and Arizona is winning.”

What is unclear is whether the folks moving here are winning in the search to find a home at a reasonable price.

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