By Madelaine Braggs | Rose Law Group Reporter
Arizona is experiencing a renaissance of white-hot economic growth and companies from around the world, with billions of dollars in investment opportunities, are starting to like the sound of a dry heat. At the 2025 Arizona Dealmakers conference, Zonda dived into the data explaining how the state is leading in advanced technologies, manufacturing and real estate development.
Driving Arizona’s Economic Future: A conversation with Arizona Commerce Authority CEO, moderated by Jordan Rose, Rose Law Group Founder and President
One of the standout sessions was the fireside chat moderated by Jordan R. Rose, Founder & President of Rose Law Group, featuring Sandra Watson, President and CEO of the Arizona Commerce Authority. The discussion focused on Arizona’s rapidly evolving economic landscape and the state’s emergence as a national leader in semiconductor manufacturing, clean energy, and advanced technology sectors.
Watson explained how Arizona has become a hotbed for semiconductor investments, with over $100 billion pouring into the industry and at least 16,000 related new jobs created in recent years. “We started courting TSMC in 2013, going to Taiwan and meeting with their executives. They didn’t have a project or plan to expand in the U.S. at the time, but we established a relationship. By 2017, they visited Arizona, met with then Governor Ducey, and started seriously considering expansion,” she said.
The CHIPS Act played a crucial role, but Watson emphasized that Arizona’s business-friendly environment, low taxes, water conservation efforts, and robust infrastructure made it a prime choice for semiconductor giants like Intel and TSMC, as well as dozens of other related companies. “TSMC put Arizona on the map nationally, and now we’re seeing international activity.”
Watson also highlighted Arizona’s renewable energy investments, including a $10 billion boost to battery manufacturing and the establishment of the American Battery Factory in Tucson, a $1 billion investment that will significantly contribute to the state’s energy future.
“Arizona is becoming the epicenter and we are on the path to being a renewable energy and advanced manufacturing leader,” she stated. Other major investments include $2.8 billion in aerospace and a rapid expansion of data centers, driven by AI advancements. “AI is increasing the demand for data centers, and Arizona is positioned as an important location,” Watson said. While power demands for these facilities are a concern, technological advancements such as DeepSeek’s efficiency improvements could reduce overall consumption.
With 480-500 active economic projects, Arizona is maintaining a strong 40% win rate on securing major business investments. The state continues to attract high-paying jobs while ensuring long-term sustainability for industries and communities alike. They’ve brought in over 130 thousand new jobs and over $110 billion of investment.
“We have a plan for growth and have since we were named a state. We know there are challenges, but we also know there are long term solutions.” said Watson. With restrictive water laws presenting another concern for developers, she says the ACA is focused on conservation, while still maximizing Arizona’s unique position for mega sites. Unlike many other coastal states who have built to their max capacity, our state still has land large enough for facilities that require thousands of acres.
Out of the nearly 500 active economic projects, 50 of them are mega project, which are defined by a $500 million investment or at least one thousand jobs.
Ali Wolf’s Economic Outlook: The Housing Market in 2025
In another highly anticipated session, Ali Wolf, Chief Economist at Zonda, provided a comprehensive overview of the economic landscape and housing market dynamics.
Key Takeaways:
- Federal Reserve Uncertainty: Since September 2024, the Fed has cut rates by 100 basis points, but uncertainty remains regarding future cuts due to concerns over inflation.
- Inflationary Pressures: “The Fed is happy with the labor market but not so sure about inflation,” Wolf noted, adding that inflation has not fully returned to the 2% target.
- Mortgage Rate Volatility: Rates have fluctuated between 6% and 7.3% in early 2025, impacting buyer confidence. “Stability is often more important than the actual rate,” Wolf explained.
- Home Sales Trends: Existing home sales in 2024 were the lowest in 30 years, despite rising inventory levels. Phoenix remains an average-performing market overall.
- Market Shifts: Some traditionally seller-friendly markets, like Florida, are flipping to buyer’s markets, while states with high immigration and construction jobs, like Texas, remain more balanced.
- Builder Incentives: Incentives, such as interest rate buy-downs into the high 4-5% range, are being heavily used but may lose effectiveness over time.
Industry leaders are closely watching potential policy shifts under a Trump administration, particularly regarding tariffs and immigration policies, both of which could significantly impact the housing and construction markets. Wolf highlighted that tariffs could drive up construction costs by 6-14%, making housing affordability even more challenging. Additionally, mass deportations remain a polarizing issue. “There’s a dramatic divide on immigration policy impacts—50% of builders aren’t worried at all, while 50% are slightly concerned,” Wolf noted, emphasizing the reliance of border states and construction sectors on foreign-born labor.
While a pro-growth, deregulation-focused agenda could benefit the broader economy, labor shortage and rising materials costs could create a struggle for the housing industry.
Homebuilding Strategies in a Changing Market
A panel of leading executives from major homebuilders also weighed in on market agility and cost management strategies.
Key Insights:
- Robert Wick, Meritage Homes: “Our strategies have not changed much despite the swings in factors, that has been tremendously helpful… At an enterprise level, we’re encouraged to drive sales.”
- Kate Kaminski, Howard Hughes: “There’s a constant tug-of-war between contractors and builders to balance incentives. Everything comes down to what the consumer can afford in their monthly payment.”
- Michael Fulmer, K. Hovnanian Phoenix: “We’ve been among the best townhome builders in Phoenix and are focused on the move-up buyer. We’re very comfortable in that space and are targeting that space.”
- Alan Jones, Lennar Homes: “We are the ‘All-In’ builder. Everything is included in our price. Buyers know their rate, the monthly payment, and when the home will be finished, providing clarity in a volatile market. The buyer needs to know they can afford it and exactly what they’re getting.”
Panelists also addressed rental market dynamics, emphasizing that while renting is currently cheaper than buying, long-term homeownership remains the best path to building net worth.
The Outlook for Arizona’s Housing Market and Economy
Arizona remains one of the nation’s most competitive and dynamic markets, balancing high demand, increasing supply, and economic growth. The state’s investment in advanced industries, sustainable infrastructure, and workforce development indicates the economy will continue to out-grow neighboring states. However, challenges like affordability, market volatility, and regulatory uncertainty will require ongoing strategic planning from policymakers, developers, and financial leaders.
