Phoenix was once an affordable metropolitan city. Though inflation happens in every economy, in a span of four years, it has become one of the 19 metropolitan areas that faced a gap in wages and cost of living. This gap is affecting every aspect of residents lives, from groceries to housing costs.
Highlights
- An increase in the cost of living in Phoenix has been observed against a dip in wages.
- In a span of four years, from 2020 to 2024, the valley became more expensive.
- Real estate has also been hit as housing costs have increased tremendously.
Price Trends After 2020 Pandemic
The 2020 pandemic affected the worldwide economy. Phoenix also got struck hard as economic shockwaves made it difficult for people to manage the rising cost of living. From 2020 to 2024, the percentage increase observed in wages is 21.6%, while the inflation rate is 25.4%. This shows an effective decrease of 3% in the wages.
Tampa and Houston are the only two cities that were able to keep up with the changes in wages with the rising costs. The situation in Baltimore is worse than in Phoenix, as the wages dropped by 14%. Phoenix not only faced a price drop in wages. It is becoming difficult for families to upkeep with the 20.5% grocery price growth.
Impact on Real Estate
Upgraded Points conducted studies in many cities for parameters such as growth in wages, costs, groceries, and housing prices. When everything was affected post-pandemic, real estate prices stayed no behind. Phoenix observed the third highest rate of increase in housing costs, 37%, among the cities where the study was conducted.
Only 13% of people in Arizona consider that the housing is still affordable there. 1 in 4 survey takers considered that it is better to leave the state because of the unaffordable housing costs.
With a nominal increase in income but a significant increase in expenses, people in Phoenix are finding it difficult to manage their everyday expenses. Housing and real estate are struggling as affordability is becoming challenging. No one knows how much time it will take to combat the impact of the pandemic on these minute everyday expenses in the present.
