Market Update: Tremendous Sales in April Population, Job & Income to Fuel Explosive Real Estate Growth
June 3, 2019
V.P. Business Development & Real Estate Analyst, Grand Canyon Title Agency
April was a turnaround month. Sales of previously owned single-family homes posted their best month year-over-year in nine months. Every single month from August of 2018 through March of 2019 had fewer sales than in the same month of the previous year. But not this April. April 2019 sales of 6,873 were 417 or six percent higher than April 2018 when they were 6,456. April 2019 sales were 913 or fifteen percent higher than March 2019. The last month in which there were more sales than in April 2019 was May 2018 when they were 7,199. See table one. The data for Table one was compiled from the Arizona Regional Multiple Listing Services, Inc., and was for sales in Maricopa County (Greater Phoenix).
State and County Population Increases
Recently the U.S. Census Bureau released state and county population numbers. The time period for the change in population is from July 2017 to July 2018.
Table two has the top five states for numeric population increase. Arizona was ranked fourth with a gain of 112,770 people. Amongst these five states, Arizona was number one in percentage growth at 1.7%.
Not every state had year-over-year increases in population. Table three shows the top five states that had a decrease in population.
Once Again Maricopa County Number One County for Increase in Population!
According to the U.S. Census Bureau out of all the 3,142 counties in the United States, Maricopa County had the largest numeric increase in population. See table four. This is the third consecutive year Maricopa County has been the leader in numeric population increase. Year-over-year the population of Maricopa County increased by 81,244 or 222 people per day. This increase of 222 per day outshined last year’s report by 20 or ten percent more people per day when the population grew by 202 per day.
Table five shows the top five counties in Arizona by numeric population increase. After Maricopa County, Pinal County Pinal was number two at 15,024. Pinal County was number one amongst all Arizona counties for percentage growth at 3.5%. Maricopa County was number two in percentage growth at 1.9%. Maricopa County’s numeric population increase represented 66% of Arizona’s population increase. When combining the population increases for both Maricopa and Pinal counties they represented more than three-fourths of Arizona’s total population gain. The aggregate of these two counties combined was 96,268 or 78% of Arizona’s population increase.
Sometimes Maricopa County is referred to as Greater Phoenix. At other times the combination of Maricopa and Pinal counties are referred to as Greater Phoenix since parts of Pinal County are contiguous to Maricopa County.
Job Growth Momentum
With labor shortages throughout the country, Maricopa and Pinal counties are destinations for businesses locating and relocating their operations to take advantage of our explosive population growth. People looking for job opportunities are moving to these counties because of their awareness of businesses locating and relocating here. Other reasons that both companies and people are moving to these counties are lower state and corporate taxes than where they currently reside, along with less expensive housing.
According to data from the Arizona Office of Economic Opportunity the monthly average number of people employed in Maricopa County in 2016 was 1,910,800, in 2017 1,966,000, in 2018 2,034,100 and for the first quarter of 2019 2,086,467.
In tables six and seven are companies that recently opened an operation or have committed to opening an operation in Greater Phoenix.
Arizona above Average for Personal Income Growth
For all fifty states, personal income increased 4.5% in 2018 over 2017, according to the U.S. Bureau of Economic Analysis. When breaking out personal income year-over-year by state, Arizona finished at 5.5%, making it the third highest. Washington State was first at 6.8%. Finishing last was Hawaii at 2.8%.
For a real estate market to thrive you need demand and supply. Demand is fueled by an increasing number of people with jobs along with growing personal incomes. This is all present in Greater Phoenix. Supply is the challenge. Because of the lack of existing inventory for sell, homebuilders, over the next few years, should experience some of their best years ever. Please let me know your comments at FWilcox@gcta.com or 602.648.1230.