By Angela Gonzales | Phoenix Business Journal
Homebuilding in metro Phoenix slowed drastically in mid-2022 and buyers ran for cover after rising mortgage interest rates caused potential homebuyers to hit the pause button.
Tina Tamboer, senior housing analyst for The Cromford Report, put it another way during a recent Phoenix Business Journal virtual panel discussion on the metro Phoenix housing market.
“I feel like the builders have just been driving through a school zone,” she said.
Still, despite the slowdown last year, Patty Lafferty, principal and designated broker for The Land Agency who also was on the panel, said she’s starting to see signs of stabilization as the first quarter of 2023 winds down.
One reason for Lafferty’s optimism is the fact that, over the past several years, metro Phoenix’s economy has become more diversified, growing tech and biotech sectors to provide more stability to what was once a real estate-based economy.
For example, hundreds of employees that have been in training to work at Taiwan Semiconductor Manufacturing Co.’s new $40 billion facility in north Phoenix have arrived and are preparing to begin working there. The development of TSMC’s manufacturing plant and other high-paying tech jobs are creating a need for more housing, said Shelby Duplessis, president of land development for The Empire Group of Cos.
“We’re still seeing 300 people a day moving into Maricopa County from elsewhere — that’s 111,000 people a year,” said Duplessis, a panelist. “And again, high-paying jobs.”
As a result, Empire Group plans to build 354 rental homes within a luxury community with resort-like amenities on a 40-acre parcel near TSMC’s site.
Empire Group is among a growing list of developers buying land to build for-sale and rental homes near TSMC.
“We’re moving quickly,” Duplessis said. “We have quite a few projects underway. I anticipate that we’ll be breaking ground on a project every month this year.”
The Covid-19 pandemic wreaked havoc on the supply chain and labor shortages, she said.
“We’re still catching up from all of that and now just starting to get some of our approvals,” Duplessis said.
Empire Group has 13 build-to-rent projects totaling 3,149 luxury units in development and three more parcels in escrow for another 888 units across metro Phoenix.
Lafferty said she’s negotiating a lot of land deals for build-to-rent developers.
“When consumers aren’t at the table to buy a home, they have to live somewhere,” Lafferty said. “So where do you go? You go to rent.”
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