Phoenix Metro Changing Demographics and Why You Should Care

Mark Stapp
W.P. Carey School of Business, Arizona State University


There is one simple statement about metro Phoenix that is indisputable: this is a growth market. The recession aside, although the area has been growing for decades since the 1900s, the substantial growth this market is known for began in the 1950s. Between 1950 and 1960, the population of Phoenix grew 447 percent from 106,818 persons to 584,303. After the 1950s, Phoenix grew at an average of 30+/- percent per decade until 2010, when growth rates started to slow. Since 2010, Phoenix has had an average growth rate of about 1.66 percent annually — not bad, but not at the pace we had seen for decades. (It’s worth noting that it’s difficult to maintain high percentage growth on an ever-increasing base.) Equally important to simply adding more people to the area, there have been significant changes in the makeup of the population, especially in the past 20 years.

We, like the country as a whole, are becoming a more diverse population. According to the 2000 U.S. Census, Maricopa County (metro Phoenix) was 77.3 percent White, 24.8 percent Hispanic, 3.7 percent African American, and 2.2 percent Asian. The 2010 Census showed how we were beginning to change. In 2010, the county was 73.0 percent White, 29.6 percent Hispanic, 4.99 percent African American, and 3.4 percent Asian. These trends continue today; by some estimates, the current percentage of Hispanics (Latinos) exceeds 30 percent, and the percentage of those indicating they are White has fallen to about 68 percent.

The growth of the Latino population has been significant over the last three decades. One in every two people added to the state’s population between 2000 and 2008 was Latino. The percentage of Arizonans who are Latino increased from 16 percent in 1980 to the current estimated total of more than 30 percent. The growth of the Latino population in Arizona comes as no surprise and has occurred for several reasons. The families of many Latinos in Arizona have been in the state for generations. Furthermore, globalization, the expansion of economies across international borders, and the aging of the populations of developed countries all stimulate the movement of people into places such as Arizona because we are a growth economy. This is the reason economies grow and populations increase — economic opportunity.

The shifting racial/ethnic composition of metro Phoenix also reflects a major demographic divide between Latinos and Whites across Arizona’s age spectrum. Birth rates among Whites have been falling for decades, while the birth rate for Latinos has been increasing. As a result, Whites account for over half of the state’s population ages 35 and older, and make up at least 80 percent of those in elderly age categories. By contrast, Latinos outnumber Whites in the two youngest age groups (0 to 4 and 5 to 9). While the median age of the White population is 43, the median age is only 26 among Latinos. These are big changes with long-term implications for housing demand and public policy.

Why should we care about these changes? Markets are people, not buildings, and real estate is essentially a social science that provides a service to a market. Knowing a market is more than knowing its demographic makeup; it’s knowing how wants, needs, and values influence the decision-making of those who constitute the market. To know our market, we must know the composition of the market, and shifting demographics bring changes in these wants, needs, and values. Yes, we are a growth market, but the future will look different than the past. We are not who we were, so be a student of people and look forward. This will help you better serve the market.