Arizona Real Estate Market:
The following is an aggregate of various forecasts and outlooks relating to the Arizona market. Such views are the educated guesses by industry professionals but should be treated as such. According to economics experts at Arizona State University, Arizona’s economy is doing quite well and is very likely to continue to flourish for at least for another year. “I’ve been studying the Arizona economy for quite some time and…I think that we’re going in the right direction,” said Rounds Consulting Group President Jim Rounds. “We’re coming off a super-strong year, and it’s giving us a lot of momentum,” said Lee McPheters, research professor of economics in the W. P. Carey School of Business at ASU and director of the school’s JPMorgan Chase Economic Outlook Center. CBRE Group predicts that Arizona will see continued positive economic outlook in due to corporate expansions, a healthy housing market, and continued employment and wage growth. According to Zillow, Phoenix’s median home value is $242,800 and home values have risen 5.5% over the past year. The market is predicted to rise another 2.6% by May 2020. Employment growth is another primary factor in the Arizona market’s vibrancy. “We’re in a strong employment expansion that has been unrelenting since 2014 and should continue for the foreseeable future,” said Hoffman, an economist and the director of the L. William Seidman Research Institute at the W. P. Carey School of Business. “We’ve seen robust employment growth in different sectors like finance and tech. Those sectors are obviously office users,” Jessica Morin, director of market analytics at commercial property company CoStar Group, said. “So now there’s almost a new concern for Phoenix, it’s are we actually building enough space?” The commercial real estate market has been booming as workers are filling up all the new space, according to Mark Stapp, the Fred E. Taylor Professor in Real Estate in the W. P. Carey School of Business. With the exception of 2016, demand for multifamily housing has outpaced new supply for eight-years – partially because of employment growth, low vacancy and affordable rent, according to CBRE. According to CBRE, net absorption has outpaced new supply since 2011, further pushing down the vacancy rates. At the peak of the recession, Phoenix saw 26.2% vacancy while in Q4 2018, the state saw 15.2%. In terms of new construction in general, much of the construction is focused in two submarkets: Tempe and Chandler. Overall, the Arizona market seems to be in for another great year.