Arizona Cities Make Top the List for Job Recovery
July 1, 2022
Arizona Cities Make Top the List for Job Recovery
Both Purchase Price & Rent Reach New Pinnacles
Inventory Increases as Buyers Wait & See
Arizona: More Than 100,000 People Employed Year-Over-Year
This past April, 111,300 more people were employed in Arizona compared to April of last year. This is according to the Arizona Commerce Authority. The Arizona unemployment rate decreased to 3.2% in April from 3.3% in March. The U.S. unemployment rate had no change from March, remaining at 3.6% in April 2022. April 2022 employment showed a gain of 13,100 jobs over March 2022.
The April 2021 to April 2022 employment gains were reported in the following sectors: ● Trade, Transportation & Utilities (33,200 jobs) ● Leisure & Hospitality (32,200 jobs) ● Education & Health Services (11,000 jobs) ● Manufacturing (10,200 jobs) ● Professional & Business Services (8,400 jobs) ● Government (5,800 jobs) ● Other Services (5,000 jobs) ● Construction (4,300 jobs) ● Information (2,000 jobs) ● Natural Resources & Mining (700 jobs) Losses were reported in the following sector: ● Financial Activities (-1,500 jobs). See Chart One.
Arizona Cities Top List for Job Recovery
On April 27, 2022, WalletHub.com released the report Cities Whose Unemployment Rates Are Bouncing Back Most. WalletHub compared 180 cities based on five criteria. They reviewed the change in each city’s unemployment during the latest month for which they have data (March 2022) compared to March 2019, March 2020, March 2021 and January 2020. They also considered each city’s overall unemployment rate. Seven Arizona cities were in the top ten and nine Arizona cities made it in the top fifteen. On the list, Scottsdale ranked number one, Tempe #2, Gilbert #3, Chandler #5, Mesa #6, Glendale #7 Peoria #9, Phoenix #10, Tucson #15. Not too bad. See Table One.
Chandler and Buckeye Have Industrial Construction Projects Ranked in Top 20
The Phoenix Business Journal reported that Intel Corp’s $20 billion addition of two new factories at its Ocotillo Campus in Chandler ranked No. 5 and Kore Power Inc.’s $500 million lithium-ion battery storage manufacturing facility in Buckeye came in at No. 19 on the list of top industrial deals in the U.S. according to Site Selection magazine. Both projects are expected to create 3,000 jobs.
May Results: Purchase Price Reaches New Pinnacle
The following results are for single-family resale homes in Greater Phoenix (Maricopa County) from the Arizona Regional Multiple Listing Services, Inc. data.
Yes, the median purchase price (MPP) of a single-family resale home reached a NEW pinnacle in May. The May 2022 MPP hit $540,000. This is $15,000 or 2.8% higher than April 2022 when it was $525,000. May 2022 MPP is $104,500 or 24% higher than May 2021 when it was $435,500. May 2022 sales were 5,614. This 332 or 5.5% less than April 2022 and 811 or 12.6% lower than May 2022. May 2022 listings were 7,719. This is 447 or 6.1% higher than April 2022 and 781 or 11.3% higher than May 2021. May 2022 listings were the most for a single month in 2022. Days on market (DOM) in May 2022 were 24 compared to 26 in April 2022. DOM were 25 in May 2021.
Median monthly rent in May 2022 was $2,360. This is a new high. The previous high was $2,300 in April 2022 and in September 2021.
The Scottsdale median purchase price for a single-family resale home in May 2022 was $1,075,000. This is $25,000 or 2.2% less than April when it was $1,100,000. The May 2022 Scottsdale MPP is $152,250 or 16.5% higher than May 2021 when it was $922,750. The Paradise Valley median purchase price for a single-family resale home in May 2022 was $3,960,000. This $335,000 or 9.2% higher than April when it was $3,625,000. The May 2022 Paradise Valley MPP is $1,314,900 or 49.7% higher than May 2021 when it was $2,645,100.
Inventory Increases as Buyers Wait-and-See
May 2022 had the highest number of new listings for a month in 2022. The Cromford Report stated that supply is growing fast and demand weakening. At the same time the overall median purchase price for a single-family resale home in Greater Phoenix reached a new high in May 2022. But purchase price is a lagging indicator on the state of the housing market. Because homes that closed in May generally went under contract in March and April. While the current increase in inventory is what is happening today in the housing market. Why is inventory increasing? Some buyers in May, rather than make an offer, moved into a wait-and-see what’s happening in the market mode. Triggering this buyer pause is talk of a recession, spiking inflation, stock market decline, and the war in the Ukraine. Of course, rising mortgage rates eliminates some buyers. This buyer pause is increasing inventory. Increased inventory is going to cause some price reductions and increase the days on the market, however, now buyers have more home choices. In the meantime, some sellers have angst because their home didn’t go under contract within two hours after it was listed. Some sellers will need to reduce their list price but will resist. One reason for this resistance is the mismatch of information. The Case-Shiller home price index will not report May purchase prices until July. When they do report in July, Greater Phoenix will be one of the top areas in the country for increases in home value. When a seller hears that, they may resist a price reduction or even want to increase their sales price. But this information is two months old. What the seller may not know, is that real time inventory has accumulated. And that this accumulation of inventory affects future home values.
If you remember, there was a time last year that the overall median purchase price in Greater Phoenix stalled and in some cities it fell. In 2021, the median purchase price was $450,000 in July, $450,000 August and $450,000 in September. In an article I wrote for the October 2021 edition of the Arizona Journal of Real Estate & Business I listed the median purchase price for twenty-six cities. Thirteen of the twenty-six cities had median price declines from July to August. Then if you would have told me by May 2022 the overall median purchase price would be $540,000 or $90,000 higher than when purchase prices stalled, I am not sure I would have believed it.
A major consideration when buying a home is how long will I live or hold the property. I remember back during the great real estate recession, buyers bought homes that often depreciated, loss value after their purchase. But if these buyers lived in their home long enough, they not only gained back the lost value, but the value of their home doubled.
A very bright spot that is fueling buyer demand to own has been job growth in Arizona. Year-over-year, Arizona gained 305 jobs per day. (111,300 / 365 days). In April 2022, the daily increase in jobs intensified. In April, there were 13,100 more people employed than March. This equates to 430 more people employed daily in April. Employment creates buyers.
Chart One: 111,300 More People Employed in Arizona
|8||South Burlington, VT|
|14||St. Petersburg, FL|
|19||St. Paul, MN|
Chart Two: Median Purchase Price & Median Monthly Rent
Table Two: Greater Phoenix Sales & Listings of Single-Family Resale Homes
|Sales||2021||2022||Change||% Change||Listings||2021||2022||Change||% Change|