ASU economists say all signs pointing upward for Phoenix real estate

May 8, 2021 at 1:27 pm Leave a comment

Real estate and the economy in general are expected to continue to trend upward in the Phoenix metro area for the foreseeable future.

That was the consensus from three Arizona State University economics professors who provided an update on the status of Arizona’s economy during a May 6 webinar sponsored by ASU’s W.P. Carey School of Business.

Mark Stapp, professor of Real Estate and executive director of ASU W.P. Carey’s Master of Real Estate Development Degree Program, said a biannual survey of commercial real estate brokers shows virtually no concern that the Phoenix real estate market is cooling off anytime soon.

Stapp said the poll of brokers showed little to no concerns for a break in demand for housing in the Valley of the Sun.

“Is this a housing bubble? Absolutely not – it’s a supply problem,” Stapp said.

Stapp noted the supply of residential housing in the Valley was stagnant for several years after the Great Recession that began in 2007, and the housing supply stayed flat for the past decade, basically meeting demand.

“We underbuilt for the last decade,” Stapp said, adding that any prior oversupply in Phoenix was depleted by 2014.

Regarding concerns that availability of housing affordable to entry-level buyers is declining in Phoenix, Stapp added, as long as interest rates stay low and well-paying jobs are added and continue to be available, “we’ll have affordability.”

However, demand will continue to outstrip supply in the Valley because rising material costs, such as lumber prices, are having the greatest impact on stifling residential construction, Stapp noted.

In terms of economic impacts affecting the Valley, ASU Professor of Economics Dennis Hoffman said Arizona ranks first nationwide in growth of transportation and warehousing jobs. Overall, Arizona and the nation are recovering at a much faster pace than experienced following 2007’s Great Recession.

Lee McPheters, ASU Research Professor of Economics, added that he expects a full recovery from COVID’s economic effects “certainly by the first part of next year.”

“(Rising) population is the ace in the hole for Arizona’s economic development,” McPheters said.

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Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Gilbert Real Estate, Maricopa County Real Estate, Uncategorized. Tags: , , , , .

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