Positive business and lifestyle climates draw new residents and companies to the Valley. Phoenix stands out this year with one of the nation’s fastest-growing economies as firms are drawn to the favorable business environment, lower expenses and an increasingly educated workforce. Many businesses are moving operations out of high-cost markets and into the Valley, tapping into the deep roots that finance, insurance and software firms have grown. This will propel Phoenix to the top spot in net migration in 2020, adding more than 77,000 new residents, many of which being young professionals. The Valley is a prime example of activity picking up in secondary markets at this point in the cycle as the single-family sector has been unable to meet the needs of an expanding metro. Reflective of this is the exceptionally limited availability of traditional workforce housing as the Class B and C vacancy rates sit in the mid-3 percent and high-2 percent ranges, respectively. This will restrain absorption this year, resulting in the majority of new leases stemming from luxury apartments.