Job and Income Growth Make for a Fired-Up First Half of 2018 Real Estate Market

Fletcher Wilcox
V.P. Business Development & Real Estate Analyst, Grand Canyon Title Agency, Inc.


We are halfway through 2018. Let’s review available economic information for 2018 and compare it to prior time periods.

Arizona has made tremendous strides in job growth. The Arizona Office of Economic Opportunity has available job data for the first five months of 2018. Table 1 (page 13) compares the average number of jobs per month for the first five months of 2017 to the first five months of 2018, then compares the first five months of 2013 to the first five months of 2018.

Arizona has 64,480 more jobs in the first five months of 2018 than in the first five months of 2017. When broken down by category, Educational and Health Services leads the pack, gaining 13,780 more jobs. Construction is number two with an increase of 12,040. Finishing third with 9,120 is the subcategory Accommodation and Food Services. The fastest-growing category is the subcategory Educational Services, which increased by 10 percent. Other fast-growing categories are Construction (8.5 percent) and the subcategories Durable Goods Manufacturing (5.2 percent) and Professional Technical Services (5.1 percent).

Over a five-year period, Arizona has 316,260 more jobs in the first five months of 2018 than in the first five months of 2013. The big gainer was again Educational and Health Services with 65,960 more people employed. Its subcategory Health Care and Social Assistance made up 55,760 of this increase. Other categories that gained over 50,000 jobs are Professional and Business Services at 54,720; Trade, Transportation, and Utilities at 53,920; and Leisure and Hospitality at 52,360. The biggest percentage gainers were Construction at 26.6 percent and the subcategory Finance and Insurance at 22 percent. An enlightening article on the growth of the finance and insurance industry in Arizona can be found at

Table 1. Year-Over-Year (2017 to 2018) and Five-Year (2013 to 2018) Job Data Comparisons of First Five Calendar Months

Arizona Above Average for Increase in Personal Income in 2018

The most recent data for state personal income comes from the U.S. Bureau of Economic Analysis for the first quarter of 2018. The graphic below shows the percent change for each state. The average percent growth for a state was 4.3 percent. Washington finished first at 7.4 percent, with Utah second at 6.0 percent, Delaware third at 5.9 percent, and Kentucky fourth at 5.7 percent.

The personal income released by the U.S. Bureau of Economic Analysis is annualized. Their annualized growth rates show what the percent change in personal income would be if the quarterly rate continued for four quarters. For more information, go to

Sale Prices in First Half of 2018 Set New Records

The data I had access to for real estate sales of previously owned single-family homes came from the Arizona Regional Multiple Listing Service, Inc. The information is for Maricopa County, the most populous county in Arizona.

Table 2 (page 13) compares sales for the first six months of the year from 2005 through 2018. There is nothing outstanding about the number of sales in 2018, but 2018 does impress when comparing sales by price range. No other year comes close to the first half of 2018 in terms of the number of sales between $250,000 and $499,999 — not even the booming pre–real estate recession years of 2005 and 2006. There were 18,330 sales in this price range, 2,699 more than any other year. The first half of 2018 also has the most sales between $500,000 and $999,999, and it is second in sales over $1,000,000, with 35 fewer than 2006.

A measurement I tracked during the real estate recession was the number of single-family sales under $50,000. The first half of 2018 shows eight. Compare this to 2009 when there were 4,924.

Table 2. Single-Family Home Sales Comparisons, Maricopa County, 2005-2018 (First Six Calendar Months)


The increase, over the last five years, of over 300,000 employed people along with increases in personal income is putting tremendous pricing pressure on the low number of available single-family homes for sale. It is my opinion that there is such demand for owning single-family homes that even an interest rate hike to 5.0 percent on a 30-year fixed mortgage will only slightly reduce the number of eligible buyers, and it won’t be enough to put downward pressure on purchase prices.