Approximately 3 years have passed since the start of what some people are calling the worse economic environment since the Great Depression and the Arizona economy is looking to get back on its feet. A recent meeting of economists at the 47th Annual Economic Forecast Luncheon came to the consensus that Arizona’s economic recovery will continue to be far less robust than rebounds of the past, as the state was hit twice as hard as other states in the U.S. This projection could pose well for Arizona investment property buyers.
Green light for Arizona investment property buyers
Let’s look at 3 key elements that are used in determining the strength of a local economy.
Job Growth: For all of 2009 (deepest point of the recession), only Nevada had a weaker job market and Arizona ranked 49th among states in job growth. However in October 2010, the state drastically improved to 12th. Phoenix added about 27,000 jobs in September making it the second fastest growing metro area. In 2011, we should see favorable job growth, but it will not be until approx. 2013 before employment sees pre-recession numbers. The unemployment rate through 2011 should still remain above 9%.
Real Estate: The Arizona real estate market remained weak in 2010 primarily driven by tougher credit underwriting standards, depressed home prices (approximately 51% of homeowners have negative equity), failing loan modifications, high rates of foreclosures, and Option ARM mortgage program resets not peaking until 2011. Most economic forecasters are predicting that the Arizona housing market will not stabilize for another 2 to 3 years, which presents opportunities for Arizona investment property buyers.
Population Growth: Arizona has always relied on population growth to stimulate the economy; however due to the housing market collapse nationwide most people are not able to sell their existing homes and move. 2011 should see less than 2% population growth compared with more than 3 percent back in 2004 and 2005 (one of the highest growth rates in the U.S.). Although Arizona should see some type of growth next year, it will need to increase at a faster pace to really put the economy in high gear.
Based on the 3 elements of economic growth, it is safe to say that the Arizona recovery should see signs of improvement in 2011. However, this improvement will be slow moving and not pick up for at least 2 – 3 years. What a great opportunity to be an investor buying Arizona investment property! Think of it as an all-you-can-eat buffet, a huge inventory of property being offered at deep discounts and a favorable rental market. This slow recovery means that investors will have more time to develop their real estate portfolio. Learn how Clear Vision Investment Group can help you locate the right property investment company that will maximize your return on Arizona investment property.
