Phoenix. The Valley of the Sun. A sprawling metropolis rising from the Sonoran Desert, known for its year-round sunshine, breathtaking landscapes, and… exorbitant cost of living? That last part might have you scratching your head, especially if you've been following the recent wave of articles and social media posts lamenting the rising costs in Phoenix.
Yes, it's true that Phoenix, like many cities across the US, has experienced an uptick in housing costs and other expenses. However, the narrative that Phoenix is somehow exceptionally expensive compared to other major metropolitan areas is a misconception, fueled by a narrow perspective and a lack of context.
Phoenix? Oh, it's gotten so expensive there!" Sound familiar? It's a phrase uttered by leads from my website, friends, family, and even random acquaintances. I've had potential buyers of Scottsdale real estate say that they're going to wait a year because they think prices are going to drop by 20%. That isn't happening!
Let's unpack this myth, shall we? Let's dive into the data, compare apples to apples, and understand why Phoenix, while not necessarily a "cheap" city, is far from the budget-busting behemoth it's often portrayed to be.
The reality of living in Phoenix (and the greater metropolitan area) is far more nuanced than the "expensive" label slapped on it. While it's true that certain areas (looking at you, Paradise Valley, sitting pretty at #27 on the list of priciest cities) can drain your bank account faster than you can say "Frank Lloyd Wright," the majority of Phoenix offers a far more balanced lifestyle.
Paradise Valley
In fact, I'm writing this post because of an e-mail I received from Phoenix Agent Magazine about Paradise Valley being in the Top 100 Most Expensive U.S. Zip Codes. So, why the disconnect? Why does this "expensive" myth persist? Let's unpack it:
1. The California Conundrum (and Other Migratory Mishaps):
Let's address the elephant in the room—or rather, the state just west of us. California, for all its beauty and opportunity, has become synonymous with exorbitant living costs. And guess where many Californians have set their sights? You guessed it: Phoenix!
This influx of new residents, often arriving with hefty wallets from selling their California homes, has undeniably impacted the housing market. Suddenly, bidding wars and inflated prices became commonplace, especially in desirable neighborhoods. But here's the kicker: those prices are still often significantly lower than what they were used to in California. So, while it might feel like Phoenix is expensive, it's all relative, right?
And it's not just California, although I just spoke to a buyer from California who was lamenting the prices in Scottsdale being so high. Although California prices top the list, there are more affordable areas in the state so I guess it depends on where you actually live in the top-priced cities and states.
The top 6 states that send the most people to Arizona are:
- California
- Washington
- Texas
- Colorado
- Oregon
- Illinois
I only showed the top 6 because I knew Illinois was in there somewhere, and that's where we came from. I thought it would be higher. This is from azfamily.com and Stacker.
The Valley of the Sun has become a magnet for people fleeing high costs and harsh winters across the nation, further fueling competition in the housing market. Canada is another top area where we get transplants and is also high-priced. Canadians come here for full-time living or the purchase of a 2nd home.
We also get Midwest transplants and when we purchased our first Scottsdale townhouse, the prices were pretty similar, especially since the Phoenix area was hit harder than the Southwest Chicago Suburbs after the real estate bubble broke during the Great Recession that began in 2007 and ended in 2009. Now, Scottsdale and other Phoenix suburbs have jumped in average home prices and Midwest transplants are now facing sticker shock.
The reality is more nuanced:
- Increased demand can drive up prices: A surge in population can lead to higher demand for housing and other resources, potentially impacting prices.
- But it also brings economic benefits: New residents bring their skills, businesses, and investments, contributing to the local economy and creating jobs.
- Long-term residents benefit too: A growing economy can lead to higher wages, better infrastructure, and a wider range of amenities and services for everyone.
Instead of viewing newcomers as a problem, it's more constructive to focus on smart urban planning and housing policies that can accommodate growth while ensuring affordability for all residents.
2. The "Luxury Lifestyle for Less" Mirage:
The Phoenix area, with its year-round sunshine and plethora of resorts, has cultivated an image of luxurious living. And while you can absolutely find luxury here (again, Paradise Valley, anyone?), the reality is that this lifestyle is readily available at various price points.
From charming bungalows in historic neighborhoods to modern apartment complexes with resort-style amenities, Phoenix and its suburbs offers a range of housing options to suit different budgets. You can find amazing food at family-owned restaurants, enjoy free concerts in the park, and explore stunning natural landscapes without breaking the bank. The key is recognizing that the "luxury" narrative doesn't have to dictate your spending habits.
3. The Case of the Sneaky Costs:
Okay, so maybe rent or mortgage payments aren't *outrageously* high in most of Phoenix. But what about those hidden costs that can chip away at your budget?
Transportation: Let's be real, Phoenix is a car-dependent city. While public transportation is improving, owning a vehicle (and paying for gas, insurance, and maintenance) is practically a necessity for many. But where we're from, a Chicago suburb, we relied on our cars and used public transportation sparingly - maybe once a year for a train trip to downtown Chicago with friends to attend the Christkindle Market and have lunch after.
Utilities: That glorious sunshine comes at a price—literally. Summer electricity bills can be harsh thanks to our reliance on air conditioning. Once again, the Chicago area has brutal winters (that expand from Fall into Spring) and hot, humid summers, requiring a long need for heating and a summer full of A/C.
Food Costs: Like many places across the country, Phoenix has experienced rising food costs, making grocery shopping a bit more painful. Is it that much different in other large metros?
These sneaky costs, while not unique to Phoenix, definitely play a role in shaping people's perception of its affordability.
4. The Media's Magnifying Glass:
Let's not forget the media's role in shaping our perceptions. Headlines screaming about "skyrocketing rents" and "unaffordable housing" certainly grab attention but often lack crucial context. Yes, prices have risen, but rarely do these articles delve into the nuances of specific neighborhoods, housing types, or the overall cost of living compared to other major cities.
We have a Chicago friend who pays $1,700/mo. for rent in an old house (he lives on the main level and there is an apartment upstairs and a basement unit that had a big mold problem). His first floor unit smells mildewy even though the basement mold issue was supposedly taken care of.
So, Is Phoenix Expensive or Not?
The answer, as with most things in life, is: it depends. Phoenix is a city of contradictions:
Yes, it can be expensive if you're set on living in a gated community in Scottsdale, dining at five-star restaurants every night, and indulging in every luxury amenity. But, it can also be surprisingly affordable if you're willing to live a bit further out from the city center, explore different neighborhoods, cook at home more often, and take advantage of the many free or low-cost activities the Valley has to offer.
The "expensive" label often stems from comparing Phoenix to its past self, not necessarily to other major metropolitan areas. The truth is, Phoenix offers a desirable lifestyle and a thriving job market, which naturally attracts people and influences prices.
When we compare Phoenix to other major cities, the picture changes dramatically. Please click on this link to see the list of the Top 100 Most Expensive U.S. Zip Codes per The Property Shark website. You'll see the most expensive city in the United States. I've never heard of it.
What I found most interesting in viewing the interactive list is that Paradise Valley is the only city in all of Arizona that is in the Top 100! Not Carefree, Cave Creek, or Scottsdale. Seven of the Top 10 zip codes are in California, followed by 2 in New York and 1 in Florida.
The #1 highest-priced zip code, located in California, has a median sale price of $7,900,000. Compare that to Paradise Valley (sitting at #27) with a median sale price of $3,250,000.
It is true that several Phoenix suburbs are in the Top Ten most expensive towns in Arizona according to a 2024 report on Stacker.com:
1. Paradise Valley - Typical home value: $3,206,320
2. Carefree - $1,237,690
3. Fort McDowell - $1,064,050
4. Cave Creek - $1,051,762
6. Scottsdale - $824,119
7. Rio Verde - $823,355
8. New River - $747,920
9. Fountain Hills - $655,832
The only other two towns in the top 10 not in the Greater Phoenix area are:
5. Sedona - Typical home value: $942,053
10. Flagstaff - $654,777
None of the Arizona cities besides Paradise Valley show up in the Top 100 list. The lowest-priced zip code - #100 - on Property Shark's list is a zip code in New York City with a 2024 Median Sale Price of $1,910,000. I couldn't believe Carefree didn't show up on the list until I compared its value with that one.
The perception of Phoenix as an expensive city is often based on a flawed comparison point. Phoenix offers a high quality of life at a relatively affordable price when compared to many other thriving metropolitan areas. The city boasts:
- 300+ days of sunshine: Enjoy year-round outdoor activities and escape the winter blues.
- Stunning natural beauty: Explore majestic mountains, scenic hiking trails, and diverse desert landscapes.
- Thriving job market: Home to Fortune 500 companies and a growing tech scene, Phoenix offers diverse job opportunities.
- Vibrant culture and entertainment: From world-class museums to award-winning restaurants to a dynamic nightlife, Phoenix offers something for everyone.
The Bottom Line: Context is Key
Is Phoenix the most affordable city in the US? No. But to label it as exorbitantly expensive is a gross oversimplification. The reality is far more nuanced. When compared to many other major cities, The Greater Phoenix area offers a favorable cost of living, especially when considering the high quality of life it provides.
While the city faces challenges related to housing affordability and growth management, these issues are not unique to Phoenix and require thoughtful solutions rather than simplistic narratives that perpetuate misconceptions. So, the next time you hear someone say Phoenix is "too expensive," remember to dig deeper, consider the context, and challenge the myth. You might be surprised by what you discover.
My Advice?
Do your research. Come visit. And decide for yourself.
Don't let the "expensive" myth deter you from exploring all that the Greater Phoenix area has to offer. Dive deeper than the headlines, talk to locals, and experience the city firsthand. You might just be surprised by what you find.
The panoramic photo above of Paradise Valley is from MWINOG2777 and the license is here.
Posted by Judy Orr on
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