On December 2 a thousand or so movers and shakers filled a ballroom at the Phoenix Convention Center to listen to three top economists talk about how neither the economy nor the Arizona real estate market are going to be sunny again in 2010.
Good news
- Looking at the Housing Affordability Index, which reflects the percentage of homes sold that are affordable to families earning the area’s median income, Phoenix homes are relatively much more affordable now than they were three years ago.
- NAHB Phoenix Real Estate and Scottsdale Homes Affordability Index
Source: http://wpcarey.asu.edu/seidman/ASUChaseEDP-09.pdf
- According to ASU economics professor Lee McPheters, Arizona single-family home permits will increase in 2010 after bottoming out in 2009, but the increase will be below Arizona’s historic averages.
- According to real estate economist Elliott Pollack, Arizona real estate prices have probably bottomed, too, out and will continue to rise in 2010.
Not-so-good news
- The good news: things aren’t as bad as in Vegas!
Source: http://wpcarey.asu.edu/seidman/ASUChaseLRM-09.pdf
McPheters: “This means more foreclosures and still more turmoil in the Phoenix area housing market.” Well, at least we’re not Vegas. (Hey, that belongs in the “good news” category! – no offense to Sin City)
Forecast 2010
- According to Pollack, supply and demand will be rebalanced when excess supply is absorbed and there is a regular demand for 30,000 new Phoenix homes a year. That could occur in 2014 and will require the continued population growth of the Grand Canyon State. . .
- . . . Growth that McPheters said is likely to continue. He called population growth an “ace in the sleeve” for Arizona’s recovery. We’ve consistently ranked 2nd or 3rd in the nation in terms of growth (including last year, even after the real estate bubble burst). Hey, people want to move here – and I don’t blame ‘em!
- Even though “balance between supply and demand will not be fully achieved until about 2014,” “[Arizona home] building will get progressively better between now and then,” according to Pollack.
What’s your prognosis for Phoenix and Scottsdale real estate in 2010? Click on the “comments” link below and join the conversation!
To read more about the economic forecast and see all of McPheters’ and Pollack’s slides, check out Knowledge@W. P. Carey.
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Good article. I think it is certainly a buyers market right now with all the homes for sale, the low interest rates, and the government tax breaks. I recently purchased a home in Fountain Hills for a great price. Im sad to see the economy doing so poorly, but im happy to have gotten such a wonderful deal.