The recent interest rate hike has tempered the Phoenix market and restrictions in residential properties caused by concern of water supply shortage may cool the market in the short to medium term.
A number of large multiyear manufacturing plants, particularly in advanced manufacturing, continue to drive the construction market here. As a result, the labor market continues to grow and a shortage of qualified skilled blue- and white-collar workers maintains construction costs in the market. Phoenix still has a low cost of living compared to other major west coast areas, but it is showing a rise. The economic outlook has improved from late 2023, but impacts of new restrictions remain to be seen.